CIT, CHANDIGARH vs. RAJNEESH BANSAL

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ITA/659/2010HC Punjab & HaryanaPHHC01093616201021 April 20162 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court noted that the appellant-revenue, through its learned counsel, submitted that in view of Circular No. 21/2015 dated 10.12.2015 read with Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by the Central Board of Direct Taxes, it did not wish to press the present appeal as the tax effect involved was less than Rs. 20 lacs. The revenue prayed for liberty to file an application for revival of the appeal in case something survived therein. The Court dismissed the appeal as not pressed with liberty as prayed for. It was clarified that the withdrawal of the appeal by the revenue would not be taken as an affirmation of the Tribunal's order on merits. The legal issue, as claimed by the revenue, was left open to be adjudicated in an appropriate case.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax-II, Chandigarh, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated January 29, 2010, passed by the Income Tax Appellate Tribunal (ITAT), Chandigarh Bench. The appeal pertains to assessment year 1998-99 and challenges the ITAT's decision to quash reassessment proceedings initiated by the Assessing Officer under Section 148. These proceedings were based on information from the investigation wing regarding accommodation entries in the form of gifts and unsecured loans provided by one Shri N.K. Garg, CA, to numerous individuals, including the assessee, Sh. Rajneesh Bansal, Prop. Prince Motors. The Assessing Officer's action was approved by the Commissioner of Income Tax.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the order of the Hon'ble ITAT is perverse in quashing the assessment framed by the Assessing Officer, by initiating action u/s 148 of the Income-tax, duly approved by the Commissioner of Income-tax, based on the information supplied by the investigation wing relating to accommodation entries given by one Shri N.K. Garg CA to a large number of persons including the assessee in the shape of gifts and unsecured loans? 2. Whether the Hon'ble Tribunal failed to appreciate that the proceedings u/s 148 were validly initiated as per the correct interpretation and spirit of Section 148 and there was no case for quashing of reassessment proceedings? 3. Whether, if the interpretation of Hon'ble ITAT regarding the scope of section 148 of the I.T. Act is accepted, it would severely dilute the fight against the menace of tax evasion? Assessee's contentions: Not recorded in the judgment. Revenue's contentions: The Revenue argued that the reassessment proceedings under Section 148 were validly initiated based on credible information and that the ITAT's order quashing these proceedings was perverse. The Revenue contended that the ITAT failed to appreciate the correct interpretation and spirit of Section 148, and that accepting the ITAT's view would undermine efforts to combat tax evasion. The Revenue relied on Circular No. 21/2015 dated 10.12.2015 and Circular No. 279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016 issued by the CBDT, stating that the tax effect involved was less than Rs. 20 lacs and therefore, it did not wish to press the appeal.

Which sections of the Income-tax Act were involved?

Section 260A,Section 148

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 21.04.2016 Commissioner of Income Tax-II, Chandigarh .......Appellant Versus Sh. Rajneesh Bansal, Prop. Prince Motors ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Ms. Urvashi Dhugga, Advocate for the appellant. Mr. Alok Mittal, Advocate for the respondent. RAJESH BINDAL,J. This appeal has been filed under Section 260 A of the Income Tax Act, 1961 (for short 'the Act'), against the order dated 29.1.2010 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (A), in ITA No. 56/CHANDI/2009, for the assessment year 1998-99, raising the following substantial question of law: Whether on the facts and in the circumstances of the case, the order of the Hon'ble ITAT is perverse in quashing the assessment framed by the Assessing Officer, by initiating action u/s 148 of the Income- tax, duly approved by the Commissioner of Income- tax, based on the information supplied by the investigation wing relating to accommodation entries given by one Shri N.K. Garg CA to a large number of persons including the assessee in the shape of gifts and unsecured loans. The Hon'ble REEMA SAINI 2016.04.26 14:44 I attest to the accuracy and authenticity of this document High Court, Chandigarh

ITA No. 659 of 2010 (O&M) -2- Tribunal failed to appreciate that the proceedings u/s 148 were validly initiated as per the correct interpretation and spirit of Section 148 and there was no case for quashing of reassessment proceedings and if the interpretation of Hon'ble ITAT regarding scope of section 148 of the I.T. Act is accepted, it would severely dilute the fight against menace of tax evasion? Learned counsel for the appellant-revenue submitted that in view of circular No.21/2015 dated 10.12.2015 read with circular No.279/Misc/M-142/2007-ITJ (Part) dated 8.3.2016, issued by Central Board of Direct Taxes, she does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, she prays that liberty be granted to the revenue to file an application for revival of the appeal in case something survives therein. Dismissed as not pressed with liberty as prayed for. It is however, clarified that withdrawal of the appeal by the revenue shall not be taken as affirmation of order of the Tribunal on merits. The legal issue as claimed by the revenue is left open to be adjudicated in an appropriate case. (RAJESH BINDAL)

JUDGE (HARINDER SINGH SIDHU) 21.04.2016 JUDGE reema REEMA SAINI 2016.04.26 14:44 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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