MATTEWAL COOPERATIVE L/C SOCIETY vs. COMMISSIONER OF INCOME TAX AND ANOTHER

ITA/44/2012HC Punjab & HaryanaPHHC01099408201218 September 2013Author: MR. JUSTICE DR. BHARAT BHUSHAN PARSOON,MR. JUSTICE RAJIVE BHALLA19 pages
AI SummaryDismissed

What were the facts?

The assessee, The Mattewal Labour and Construction Cooperative Society Ltd., is challenging an order dated 16.12.2011 passed by the Income Tax Appellate Tribunal (ITAT), Amritsar. For assessment year 2006-2007, the Assessing Officer (AO) initially disallowed Rs. 60,000/- as unverifiable expenses. Subsequently, a survey was conducted on 27.3.2008, and books of accounts were seized. Following this, proceedings under Section 263 of the Income Tax Act, 1961 (the Act) were initiated by the Commissioner of Income Tax (CIT) on the grounds that the AO's order was erroneous and prejudicial to the revenue due to improper maintenance of books of accounts. The CIT cancelled the AO's order and directed a fresh assessment. The assessee's appeal against this order before the ITAT was dismissed.

What did the High Court hold?

The High Court held that the assessee's plea that the impounding of books of accounts during survey proceedings handicapped them was without merit, as the assessee claimed to have computer backups. The court found no variance between the show cause notice and the CIT's findings, stating that the case was about the erroneous nature of the AO's order due to lack of verification of entries and expenditure, and the non-production of books of accounts prepared in the regular course of business. The court noted that the AO should have rejected the books under Section 145 or conducted proper scrutiny, but instead passed a consenting order disallowing only Rs. 60,000/-. It was concluded that there was a clear non-production and failure to examine books of accounts with bills and vouchers, and the assessee failed to negate the revenue's plea. The CIT rightly found the assessment erroneous and prejudicial to the revenue, and the ITAT's order was upheld. The substantial questions of law were answered in favour of the revenue.

What were the issues?

1. Whether the proceedings initiated under Section 263 of the Income Tax Act, 1961, were without jurisdiction, as the AO's order dated 3.9.2007 was neither erroneous nor prejudicial to the revenue, having been passed after perusal of books of account, contrary to the ratio in Malabar Industrial Company Limited Vs. Commissioner of Income Tax (243 ITR 83 SC)? 2. Whether the ITAT failed to consider that the reasons given by the CIT for affirming action under Section 263 were at variance from the reasons given in the show cause notices dated 13.8.2009 and 29.9.2009? 3. Whether the order passed by the ITAT is perverse and contrary to the material on record? Assessee's Contentions: The assessee argued that the AO's order was not erroneous or prejudicial to the revenue, and the books of accounts were considered. The proceedings under Section 263 were without jurisdiction. The assessee also contended that the CIT's reasons for revision differed from those in the show cause notices. Reliance was placed on Malabar Industrial Company Limited (supra), Commissioner of Income Tax Vs. Gabrial India Limited (203 ITR 108 Bom), Commissioner of Income Tax Vs. G.K.Kabra (211 ITR 336 AP), Raylon Silk Mills Vs. Commissioner of Income Tax (221 ITR 155 Guj), and Commissioner of Income Tax Vs. Ashish Rajpal (23 DTR 266 Del). Revenue's Contentions: The revenue contended that there was no disparity between the grounds in the show cause notice and the CIT's order. The AO's order was erroneous and prejudicial to the revenue because the books of accounts were not prepared in the regular course of business and were not completed by the accountants.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 143(2),Section 142(1),Section 143(3),Section 133,Section 263,Section 145,Section 133-A

AI-generated summary — verify with the full judgment below

HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. *** Date of decision: 18th September, 2013. CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON.

1.

Whether the Judgment be reported?

2.

Whether the judgment be shown to the reporter.

3.

Whether a copy of the judgment be given to the reporter. Present: Ms. Radhika Suri, Advocate, for the appellant. Shri Denesh Goyal, Advocate, for the respondents. DR. BHARAT BHUSHAN PARSOON, J This Income Tax Appeal under Section 260-A of the Income Tax Act, 1961 (hereinafter to be referred to as “1961 Act”), is directed against order dated 16.12.2011 (Annexure A-14) passed by the Income Tax Appellate Tribunal, Amritsar in ITA No. 166/ASR/2010 for assessment year, 2006-2007. Factual Matrix

2.

The appellant Society is engaged in construction work. It had filed return for the assessment year 2006-2007 on 15.11.2006. On receipt of statutory notice under Section 143(2) followed by another notice under Section 142(1) of the 1961 Act, details were furnishe

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 260-A

All 2,347 judgments and leading authorities on Section 260-A →

Recent GST High Court judgments

Search GST case law →