THE COMMISSIONER OF INCOME TAX , KARNAL vs. M/S OM OVERSEAS, SHIV NAGAR, PANIPAT

ITA/698/2010HC Punjab & HaryanaPHHC01093659201031 January 2011Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL4 pages
AI SummaryRemanded

What were the facts?

The Commissioner of Income Tax, Karnal (the revenue) filed two appeals, ITA No. 698 of 2010 and ITA No. 718 of 2010, against an order of the Income Tax Appellate Tribunal (ITAT), Delhi Bench 'B', New Delhi, dated January 29, 2010. These appeals pertained to assessment year 2002-03 and concerned M/s Om Overseas, Shiv Nagar, Panipat (the assessee). The revenue challenged the ITAT's decision on several substantial questions of law. The appeals were consolidated for disposal as they involved common questions. The High Court noted that some questions were covered by a previous order in ITA No. 692 of 2010, while others were to be remanded for fresh decision.

What did the High Court hold?

The High Court held that questions (i) to (iv) were covered against the revenue by its order dated January 31, 2011, in ITA No. 692 of 2010 (The Commissioner of Income Tax, Karnal v. M/s Om Overseas, Shiv Nagar, Panipat). Therefore, these questions could not be considered substantial questions of law. Regarding questions (v) to (vii), the Court noted that the matter was covered by its earlier order dated August 16, 2010, in ITA No. 299 of 2010 (CIT v. M/s F.C. Sondhi and Company (P) Limited), which had remanded these issues for a fresh decision to the Tribunal. Consequently, the High Court remanded the matter to the Tribunal for a fresh decision on the issues involved in questions (v) to (vii). The assessee was granted liberty to approach the High Court if aggrieved by the Tribunal's subsequent order. No specific findings were given on the merits of these issues by the High Court.

What were the issues?

The Tribunal had to decide on seven substantial questions of law raised by the revenue. 1. Whether the ITAT was correct in holding that there was no violation of Rule 46A of the Income Tax Rules, 1962, despite the AO providing an opportunity under Section 142A(3) and the assessee not submitting objections to the DVO's report before the AO, and whether the assessee was eligible to produce new evidence before the CIT(A). 2. Whether the ITAT was correct in observing no violation of Rule 46A, as the assessee did not satisfy any conditions for admitting additional evidence, such as the AO refusing evidence or the assessee being prevented by sufficient cause. 3. Whether the ITAT was right in treating Rs. 91,30,355/- for 'Humidification Plant' and Rs. 1,20,01,718/- for 'Trenches' as investment based on the DVO's subsequent invalid report, ignoring Section 142A. 4. Whether the ITAT was right in quashing the assessment made by the AO under Section 143(3)/147, which was reopened after obtaining approval from the CIT within the stipulated time, ignoring the proviso to Section 147 read with Explanation (1). 5. Whether the ITAT was justified in allowing deduction under Section 80-HHC on the face value of DEPB when turnover exceeded Rs. 10 crores, in view of the proviso inserted by the Taxation Law (Amendment) Act, 2005. 6. Whether the ITAT was justified in allowing deduction under Section 80HHC for the entire DEPB amount by incorporating it into business profit under Section 28(iiib). 7. Whether the ITAT was justified in relying on the decision of M/s Topman Exports v. ITO, which was later reversed by the Bombay High Court in CIT v. Kalpataru Colours and Chemical. Assessee's arguments were not recorded in the provided text. The revenue argued that questions (i) to (iv) were covered against them by a prior order, and questions (v) to (vii) were covered by another order remanding the issues for fresh decision.

Which sections of the Income-tax Act were involved?

Section 260A,Section 142A,Section 143(3),Section 147,Section 151(1),Section 80-HHC,Section 28(iiib)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH.

Date of decision: 31.1.2011 The Commissioner of Income Tax, Karnal -----Appellant Vs. M/s Om Overseas, Shiv Nagar, Panipat ----Respondent CORAM:- HON'BLE MR JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney, Sr.Standing Counsel for the revenue. Adarsh Kumar Goel,J.

1.

This order will dispose of ITA Nos.698 and 718 of 2010 as it has been stated by learned counsel for the revenue that both the appeals involve common questions.

2.

ITA No. 698 of 2010 has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (for short, ‘the Act’) against the order of the Income Tax Appellate Tribunal, Delhi bench ‘B’ New Delhi passed in ITA No.2724/Del/2009 dated 29.1.2010 for the assessment year 2002-03, claiming following substantial questions of law:- “i) Whether on the facts and circumstances of the case and in law, the learned ITAT was right in holding that the CIT(A) had duly put all the objections and documents to all the parties for their comments, it cannot be said that there was violation of provisions contained in Rule 46A of t

The order continues below.

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