C I T vs. M/S ESCORTS DEALERS

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ITA/587/2007HC Punjab & HaryanaPHHC01073299200711 April 2016Author: MR. JUSTICE RAMENDRA JAIN,MR. JUSTICE JITENDRA CHAUHAN2 pages
AI SummaryWithdrawn

What did the High Court hold?

The High Court dismissed the appeal as not pressed. The Revenue's counsel, citing CBDT Circulars No. 21/2015 and 279/Misc/M-142/2007-ITJ (Part), stated that they did not wish to press the appeal because the tax effect involved was less than ₹20 lacs. The Revenue prayed for liberty to file an application for revival of the appeal if something survived therein. The Court granted this liberty. 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 issues raised by the revenue were left open to be adjudicated in an appropriate case. No finding was given on the merits of the substantial questions of law.

What were the facts?

The Revenue, Commissioner of Income Tax, Faridabad, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated January 17, 2007, passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench-I. The appeal pertained to assessment year 1997-98 and challenged the ITAT's confirmation of the CIT(A)'s order, which had deleted a disallowance. The core of the dispute involved whether the Assessing Officer (AO) had correctly given appeal effect to the CIT(A)'s order or if the AO's action was a correction under Section 154. The amount in dispute was not explicitly stated but was implied to be below the threshold for appeal based on subsequent submissions.

What were the issues?

The Tribunal was asked to decide the following substantial questions of law: 1. Whether the ITAT was correct in law by confirming the CIT(A)'s order which deleted a disallowance, by wrongly holding that the disallowance was made under Section 154 when it was an order to give appeal effect to the CIT(A)'s order. 2. Whether the ITAT failed to appreciate that the addition was made in the original order under Section 143(3) and that the AO's order had merged into the CIT(A)'s order. 3. Whether the ITAT erred in appreciating that the AO erroneously gave relief on an addition not contested before the CIT(A), and if the AO was within his rights to pass a corrigendum, irrespective of whether it was under Section 154. 4. Whether the ITAT passed a perverse order without discovering correct facts, warranting setting aside its order and confirming the AO's order. The Revenue argued that the ITAT erred in its findings regarding the nature of the AO's order and the merger of orders. The Revenue did not press the appeal due to the tax effect being less than ₹20 lacs, citing CBDT Circulars No. 21/2015 and 279/Misc/M-142/2007-ITJ (Part). The Respondent's contentions were not recorded as the appeal was not pressed.

Which sections of the Income-tax Act were involved?

Section 260A,Section 154,Section 143(3)

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 11.04.2016 Commissioner of Income Tax, Faridabad .......Appellant Versus M/s Escorts Dealers Development Association Ltd. ......Respondent CORAM: HON'BLE MR. JUSTICE RAJESH BINDAL HON'BLE MR. JUSTICE HARINDER SINGH SIDHU Present: Mr. Rajesh Katoch, Advocate for Mr. Tajender K. Joshi, Advocate for the appellant. Mr. Akshay Bhan, Sr. Advocate with 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 17.01.2007 passed by the Income Tax Appellate Tribunal, Delhi Bench- I, New Delhi, in ITA No. 3006/Del/2005, for the assessment year 1997-98, raising the following substantial questions of law: (i) Whether in the facts and in the circumstances of the case, the Hon'ble ITAT was right in law in confirming the order of ld. CIT (A) who deleted the disallowance by wrongly holding that the disallowance had been made u/s 154 although it was an order to give appeal effect to the order of the CIT (A)? (ii) That the ITAT failed to find that the ld. CIT(A) should have appreciated the fact that this addition REEMA SAINI 2016.04.26 10:57 I attest to the accuracy and authenticity of this document High Court, Chandigarh -2- was made in the original order u/s 143(3) passed by the Assessing Officer and his order had merged into the order of the CIT(A)? (iii) That the ITAT failed to find that the ld. CIT(A) further erred in appreciating the fact that the Assessing Officer erroneously gave relief on an addition which was not even contested before CIT (A) and the AO was within his right to pass a corrigendum, whether made u/s 154 is inconquential ? (iv) That the ITAT, has passed a perverse order without discovering the correct facts of the case and its order should be setaside and that of the Assessing Officer be confirmed? 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, he does not wish to press the present appeal, as the tax effect involved is less than ` 20 lacs. However, he 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) 11.04.2016 JUDGE reema REEMA SAINI 2016.04.26 10:57 I attest to the accuracy and authenticity of this document High Court, Chandigarh

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