ASSISTANT COMMISSIONER OF INCOME TAX vs. M/S VISHWAKARMA FABRICATORS

TAXC/48/2008HC ChhattisgarhCGHC01012970200806 October 2010Author: HON'BLE SHRI JUSTICE DHIRENDRA MISHRA,HON'BLE SHRI JUSTICE RANGNATH CHANDRAKAR7 pages
AI SummaryRemanded

What were the facts?

The Assistant Commissioner of Income Tax (appellant) filed an appeal before the High Court against an order of the Income Tax Appellate Tribunal (ITAT). The ITAT had cancelled an order passed by the Commissioner of Income Tax (CIT) under Section 263 of the Income Tax Act, 1961. The CIT had invoked Section 263 to revise an assessment order passed by the Assessing Officer (AO) for Assessment Year 2005-06, finding it erroneous and prejudicial to the revenue. The assessee, M/s Vishwakarma Fabricators (respondent), had filed a return of income which was assessed by the AO with an ad hoc addition. A survey was conducted prior to the assessment. The ITAT cancelled the CIT's order, holding it was based on a mere change of opinion by the CIT. The appeal was admitted on a substantial question of law concerning the applicability of the 'change of opinion' doctrine to Section 263.

What did the High Court hold?

The High Court held that the appeal was maintainable despite the Assistant Commissioner being named as the appellant. It considered the affidavit of the Commissioner of Income Tax, which was not rebutted, confirming the appeal was filed with the Commissioner's authorization and the question of law was approved by the Chief Commissioner. The Court found that the ITAT had cancelled the CIT's order without adverting to the specific reasons provided by the CIT for revising the AO's assessment. The ITAT's cancellation was based solely on the observation that the CIT's action was a mere change of opinion. The High Court noted that this issue had been considered and decided in its previous judgments in Commissioner of Income Tax, Bilaspur Vs. Harish Kumar Shah and Commissioner of Income Tax, Bilaspur (CG) Vs. Dr. Smt. Anju Goyal. Consequently, the impugned order of the ITAT was set aside. The matter was remanded to the ITAT to decide the assessee's appeal against the CIT's order afresh, providing a reasoned order after hearing both parties.

What were the issues?

1. Whether the concept of 'change of opinion' is applicable to the provisions of Section 263 of the Income Tax Act, 1961, especially when the Commissioner's order was based on highlighted errors rather than a mere change of opinion? Assessee's Contention: The assessee raised a preliminary objection regarding the maintainability of the appeal, arguing that under Section 260-A(2) of the Act, only the Commissioner or Chief Commissioner, or an assessee, can file an appeal to the High Court, not an Assistant Commissioner. They relied on the principle that if an authority is given power to act in a specific manner, other methods are impliedly prohibited, citing In re. Art 143 Constitution of India and Delhi Laws Act (1912) etc. Revenue's Contention: The revenue argued that the appeal was maintainable. The Commissioner had filed an affidavit stating the appeal was filed with his authorization and the question of law was approved by the Chief Commissioner. The Assistant Commissioner was named as appellant in the cause title because the appeal before the Tribunal was titled 'M/s Vishwakarma Fabricators Vs. Assistant Commissioner of Income Tax'.

Which sections of the Income-tax Act were involved?

Section 263,Section 260-A,Section 133-A,Section 143(3),Section 271(1)(c),Section 2,Section 117

AI-generated summary — verify with the full judgment below

DT u - HIGH COURT OF CHHATTISGARH AT BILASPUR Tax Case (Income Tax Appeal) No.48 of 2008 APPELLANT: Assistant Commissioner of Income Tax, Circle 2, Bilaspur Versus RESPONDENT: M/s Vishwakarma Fabricators, Manendragarh (CG) JUDGMENT FOR CONSIDERATION q.-10-2010 HON'BLE SHRI R.N. CHANDRAKAR, J 3 R.N. Chandrakar Judge -^ POST FOR JUDGMENT ON 7 OCTOBER, 2010 Dhirendra Mishra Judge

H< hiah COURT OF CHHATTISGARH AT BILASPUR Tax Case (Income Tax Appeal) No.48 of 20^8 APPELLANT: Assistant Commissioner of Income Tax, Circle 2, Bilaspur Vers.us RESPONDENT: M/s Vishwakarma Fabricators, Manendragarh (CG) Present: Shri Rajeev Shrivastava, counsel for the appellant. Shri Shashank Dubey, Sr. Advocate with Shri Pravin Tulsiyan, Advocate for the respondent. Division Bench: Hon'ble Shri Dhirendra Mishra & Hon'ble Shri R.N. Chandrakar, JJ. JUDGiB/IENT (Delivered on ^''October, 2010) The following judgment of the Court was delivered by Dhirendra hflishra, J.

1.

This appeal has been admitted on the following substantial question of law:- • "Whether the concept of "change of opinion" is applicable to the provisions of section 263 especially as the order of the Commissioner of Income Tax

The order continues below.

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