COMMISSIONER OF INCOME TAX-II, LUDHIANA vs. M/S AVON CYCLES LTD., LUDHIANA

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ITA/156/2012HC Punjab & HaryanaPHHC01099223201228 January 2013Author: MR. JUSTICE HEMANT GUPTA,MS. JUSTICE RITU BAHRI2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the substantial questions of law framed by the Revenue did not arise for consideration. This was in view of the fact that the Revenue's earlier appeal, ITR No. 386 of 2011, which upheld the ITAT's order deleting the disallowance under Section 14A of the Income Tax Act, was dismissed on 02.04.2012. The High Court found no substantial question of law to be decided in the present appeal, implying that the ITAT's decision to quash the Section 263 order was not to be disturbed based on the presented facts and the prior dismissal of the related appeal. The operative direction was the dismissal of the Revenue's appeal.

What were the facts?

The Revenue, Commissioner of Income Tax-II, Ludhiana, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 17.11.2011 passed by the Income Tax Appellate Tribunal (ITAT) in ITA No. 604/CHD/2011 for the assessment year 2006-07. The ITAT had quashed an order passed under Section 263 of the Act. The Revenue's appeal to the High Court was based on substantial questions of law concerning the ITAT's decision to quash the Section 263 order, especially as the Revenue's appeal against the ITAT's earlier order deleting disallowance under Section 14A was still pending before the High Court.

What were the issues?

1. Whether, on the facts and in law, the ITAT was right in dismissing the appeal of the revenue by holding that the order under Section 263 of the Income Tax Act, 1961, has been quashed by the ITAT? (Question of law) 2. Whether the ITAT was justified in holding as above, despite the appeal of the department having been filed and pending before the High Court against the order of ITAT quashing the order under Section 263? (Question of law) Assessee's Contention: The judgment does not record any specific contentions made by the assessee, M/s Avon Cycles Ltd. Revenue's Contention: The Revenue argued that the ITAT was not justified in dismissing its appeal and quashing the Section 263 order, particularly when the Revenue's appeal against the ITAT's order deleting disallowance under Section 14A was still pending before the High Court. The Revenue framed the above questions of law to challenge the ITAT's decision.

Which sections of the Income-tax Act were involved?

Section 260A,Section 263,Section 14A

AI-generated summary — verify with the full judgment below

-1- IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH ITA No. 156 of 2012 (O&M) Date of decision: 28.01.2013 The Commissioner of Income Tax-II, Ludhiana ...Petitioner versus M/s Avon Cycles Ltd. ..Respondent CORAM: HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MS. JUSTICE RITU BAHRI Present:- Ms. Savita Saxena, Advocate for the appellant. *** HEMANT GUPTA, J. The Revenue is in appeal under Section 260A of the Income Tax Act, 1961 (for short 'the Act') against an order dated 17.11.2011 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B' Chandigarh (for short 'the Tribunal') in ITA No. 604/CHD/2011 for the assessment year 2006-07. The Revenue has framed the following substantial questions of law:- “Whether on the facts as well as in law, the Hon'ble ITAT was right in dismissing the appeal of the revenue in holding that the order under Section 263 of the Income Tax Act, 1961 has been quashed by the Hon'ble ITAT? Whether the Hon'ble ITAT was justified in holding as above despite the appeal of the department having been filed and pending before the Hon'ble High Court against the order of ITAT quashing order under Section 263?”

-2- The said questions of law are consequential to the Revenue's earlier appeal i.e ITR No. 386 of 2011, which was dismissed on 02.04.2012, wherein the order of the Tribunal deleting the disallowance under Section 14(A) of the Income Tax Act was upheld. In view of the said fact, we do not find that any substantial question of law arises for consideration by this Court in the present appeal. Dismissed. (HEMANT GUPTA) JUDGE ( RITU BAHRI ) JUDGE January 28, 2013 G.Arora/Vimal

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