COMMISSIONER OF INCOME TAX-I, AMRITSAR vs. PREM PARKASH KHANNA

ITA/830/2010HC Punjab & HaryanaPHHC01093805201028 March 2011Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE AJAY KUMAR MITTAL4 pages
AI SummaryRemanded

What were the facts?

The Revenue, Commissioner of Income Tax, appealed to the High Court of Punjab and Haryana against an order of the Income Tax Appellate Tribunal (ITAT), Amritsar. The appeal concerned Assessment Year 1998-99 and challenged the ITAT's deletion of an addition made by the Assessing Officer (AO) on account of the sale of jewellery. The ITAT had relied on its previous order in the case of Sh. Rishi Grover, which in turn followed a Special Bench order of the ITAT, New Delhi in Sh. Manoj Kumar Aggarwal & Others. The Revenue argued that the Rishi Grover order was not accepted by the Department due to its perceived factual and legal deficiencies, and that the ITAT should have considered CBDT instructions regarding monetary limits for appeals. The assessee, Sh. Prem Parkash Khanna, was served but did not appear.

What did the High Court hold?

The High Court held that the matter was covered by its earlier judgment dated 8.2.2011 in ITA No.174 of 2009 (CIT v. Sh. Tejinder Singh HUF). In that judgment, it was held that each assessee's case required individual examination to ascertain the genuineness of claims, and that findings in cases like M/s Bemco/Manoj Aggarwal Jewellers and M/s Bishan Chand Mukesh Kumar could not be mechanically relied upon. Consequently, the High Court decided the questions in favour of the revenue. The matter was remanded to the Tribunal for a fresh decision in accordance with law. No specific issue was left undecided; all questions were addressed by the remand.

What were the issues?

The High Court had to decide the following substantial questions of law: 1. Whether the ITAT was justified in deleting the addition made by the AO on account of the sale of jewellery, without appreciating the evidence and facts of the case (Section 260-A of the Income Tax Act, 1961). 2. Whether the ITAT was justified in following its order in the case of Sh. Rishi Grover, which the Department had not accepted on merits, arguing it was perverse and deficient in law. 3. Whether the ITAT was justified in holding that the Department had accepted the decision in Sh. Rishi Grover's case because no appeal was filed before the High Court, when the Department's non-filing was due to CBDT instructions on monetary limits (Section 268A of the Income Tax Act, 1961). 4. Whether the ITAT was justified in following its order in Sh. Rishi Grover's case, which relied on the Sh. Manoj Kumar Aggarwal & Others order, a decision challenged before the High Court as ex-facie perverse. 5. Whether the ITAT was justified in accepting the genuineness of the sale of jewellery by the assessee, given conduct conflicting with the test of normal human conduct as laid down in Sumati Dayal v. CIT and CIT v. Durga Prasad More. Assessee's contentions: Not recorded as the assessee did not appear. Revenue's contentions: The ITAT's order was unjustified in deleting the addition. The ITAT erred in mechanically relying on previous orders without individual assessment of the assessee's case. The Department had not accepted the Rishi Grover order on merits and had not filed an appeal due to CBDT instructions on monetary limits for High Court appeals. The ITAT should have considered these instructions and the provisions of Section 268A. The ITAT's reliance on orders that were themselves challenged as perverse was also questioned.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 268A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 28.3.2011 Commissioner of Income Tax -----Appellant. Vs. Sh. Prem Parkash Khanna. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Sukant Gupta, Standing Counsel for the appellant. --- ADARSH KUMAR GOEL, J. This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, Amritsar dated 14.12.2009 in ITA No.485(Asr)/2009 for the assessment year 1998-99 claiming following substantial questions of law:- “1. Whether on the facts and in the circumstances of the case, the Hon’ble ITAT Bench was justified in law and on facts in deleting the addition made by the AO on account of transaction of sale of jewellery without appreciating the evidence on record and the facts of the case.

2.

Whether on the facts and in the circumstances of the case, the Hon’ble ITAT Bench was justified in following the order dated 26.06.2009 in the case of Sh. Rishi Grover, Prop. M/s. Vishnu Jewellers, Amritsar Versus

The order continues below.

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