SURINDER ARJUN vs. ASSISTANT COMMISSIONER OF INCOME TAX

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ITA/136/2010HC Punjab & HaryanaPHHC01093038201007 July 2010Author: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL5 pages
AI SummaryDismissed

What did the High Court hold?

The High Court found no merit in the assessee's contentions. Regarding the first issue, the Court noted that the CIT(A) had observed that while Section 144 was mentioned on the first page of the assessment order, the body of the order did not explain why the assessment was being framed under Section 144. The CIT(A) also noted that the assessee had filed replies to various queries, which were considered by the AO. Therefore, the CIT(A) concluded that the assessment was framed in the spirit of Section 143(3) and Section 144 was wrongly/inadvertently mentioned. The Tribunal affirmed this finding. The High Court further queried the assessee's counsel about any prejudice caused or any legal requirement not followed, to which the counsel could not provide a satisfactory answer. Consequently, the Court held that no substantial questions of law arose and dismissed the appeal. The operative direction was the dismissal of the appeal.

What were the facts?

The assessee, Surinder Arjun, is appealing against an order of the Income Tax Appellate Tribunal (ITAT), Amritsar Bench, for the assessment year 2005-2006. The Assessing Officer (AO) completed the assessment under Section 144 of the Income-tax Act, 1961, at an income of Rs. 55,65,822/-, after the assessee failed to file a return of income despite a notice under Section 142(1). The Commissioner of Income-tax (Appeals) partly allowed the assessee's appeal, and the ITAT also partly accepted the assessee's pleas. The assessee is now before the High Court, challenging the findings of the CIT(A) and ITAT regarding the assessment proceedings.

What were the issues?

1. Whether the findings of the CIT(A) and ITAT that the assessment framed by the AO was in the spirit of Section 143(3) and that Section 144 was inadvertently mentioned are perverse, considering the AO calculated interest under Section 234A as per an assessment under Section 144 and admitted that the assessee had not filed a return of income? (Question of law turning on Section 143(3) and Section 144). 2. Whether the finding of the CIT(A) and ITAT that quoting of a wrong section will not materially affect the assessment order, particularly when the assessee's replies were considered, is legally justified, especially when a specific reply dated 24.12.2007 was not taken into account by the AO? (Question of mixed law and fact turning on Section 144). Assessee's Contentions: The AO was not justified in framing the assessment under Section 144. The appellate authorities wrongly concluded that the assessment was framed under Section 143(3) and that mentioning Section 144 was inadvertent. This is erroneous because the AO calculated interest under Section 234A based on the assessment being under Section 144. Revenue's Contentions: Not recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 260A,Section 142(1),Section 144,Section 143(3),Section 234A

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH --- Date of Decision: July 7, 2010 Surinder Arjun --- Appellant Versus The Assistant Commissioner of Income Tax, Circle 1, Amritsar --- Respondent CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL *** PRESENT: Mr. N.L. Sharda, Advocate for the appellant. --- Ajay Kumar Mittal, J. In this appeal filed under Section 260A of the Income-tax Act, 1961 (for short “the Act”) against the order of the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, (in short “the Tribunal”) in ITA No. 193/ASR/2009, dated 30.10.2009, for the assessment year 2005-2006, the assessee has claimed that the following substantial questions of law arise for consideration of this Court: 1-Whether in the facts and circumstances of this case the findings of CIT(A) and ITAT that assessment framed by A.O. is in the spirit of Section 143(3) and Section 144 has been wrongly inadvertently mentioned by the A.O., is perverse on the ground when interest under Section 234A is calculated by A.O. as per assessment order in the spirit of 144 of Income Tax Act, and it is admitted by A.O. that assessee had not filed return of income?

2.

Whether in the facts and circumstances of this case finding of the CIT(A) and ITAT that quoting of wrong section will not materially affect the findings given in the assessment order, particularly, when the replies of appellant have been taken into account is legally justified on the ground when reply of appellant dated 24.12.2007 already on record was not taken into account by A.O.?” The assessing officer issued a notice under Section 142 (1) of the Act on 5.4.2006 requiring the assessee-appellant to file return of income for the assessment year 2005-06 but no return was filed. Thereafter, the assessment for the assessment year 2005- 2006, in the case of the appellant was completed by the Assessing Officer by invoking the provisions of Section 144 of the Act at an income of Rs.55,65,822/-. The Commissioner of Income-tax (Appeals), Jammu Headquarters, Amritsar, [in short “the CIT(A)”] vide order dated 2.3.2009, partly allowed the appeal carried by the assessee. The Tribunal also partly accepted the pleas of the assessee, vide order dated 30.10.2009. This is how the assessee has preferred the present appeal.

We have heard learned counsel for the appellant and gone through the record.

Learned counsel for the appellant-assessee submitted that the assessing officer was not justified in framing the assessment under Section 144 of the Act and the appellate authorities have wrongly concluded that the assessment was framed under Section 143(3) and mentioning of Section 144 was inadvertently done. Learned counsel urged that this finding is erroneous on the ground that interest under Section 234A has been calculated by the assessing officer by taking the assessment order to be under Section 144 of the Act. We do not find any merit in the contention of learned counsel for the appellant. Similar argument raised by the assessee before CIT(A) was rejected and in para 2.3 while rejecting the same it was recorded as under: “I have gone through the assessment order and the submission of the learned counsel for the appellant. On the first page of the assessment order, the section under which the4 assessment was being made is mentioned as section 144, but in the body of the order, the A.O. has nowhere mentioned as to whether any why he was framing assessment u/s 144 of the Income Tax Act, 1961. It is also surprising to note that the appellant has not made compliance on some occasions but at the same time it is noticed that he has filed reply to the various queries made by the Assessing Officer and the replies of the appellant have been more or less considered by the A.O. in the assessment order. In my considered view the assessment framed by A.O. is in the spirit of section 143 (3) and section 144 has been wrongly/inadvertently mentioned by the A.O. Further, these are procedural sections and quoting of wrong section will not materially affect the findings given in the assessment order, particularly, when the replies of the appellant have been taken into account. Hence, there is no substance in plea of the appellant that the order passed u/s 144 was illegal and the ground of appeal taken in this regard is dismissed. The addition as made in the order will be discussed in succeeding paragraphs while adjudicating other grounds of appeals.” This was affirmed by the Tribunal in its order dated 30.10.2009. On a specific query being put to the counsel for the appellant as to what prejudice was caused to the appellant or what requirement of law had not been followed while framing the assessment which has been held to be under Section 143(3) of the Act, the counsel could not show any prejudice having been caused to the appellant nor could point out any essential requirement, which deserved to be taken care of, had not been followed by the Assessing Officer. In view of the above, we are of the opinion that no substantial questions claimed by the appellant arise in this appeal. Accordingly, there is no merit in the appeal and the same is consequently dismissed.

(AJAY KUMAR MITTAL)

JUDGE (ADARSH KUMAR GOEL) July 7, 2010 JUDGE *rkmalik*

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