COMMISSIONER OF INCOME TAX vs. SHREYAS LAND DEVELOPMENT CORPN

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ITR/120/1986HC GujaratGJHC24010744198609 July 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court of Gujarat, after considering the facts and the law laid down by the Andhra Pradesh High Court in Commissioner of Income Tax v. East Coast Marine Products (P.) Ltd. and Another, 181 ITR 314, respectfully agreed with the Andhra Pradesh High Court's judgment. Consequently, the Gujarat High Court answered the question referred to it in the negative, meaning it ruled in favour of the revenue and against the assessee. The Tribunal's finding that the CIT's order under Section 263 was invalid was overturned. The reasoning was based on the reversal of the Special Bench decision by the Andhra Pradesh High Court, which the Gujarat High Court found persuasive. The reference was disposed of accordingly.

What were the facts?

This case involves an Income Tax Reference No. 120 of 1986 before the High Court of Gujarat at Ahmedabad. The reference was made at the instance of the revenue, the Commissioner of Income Tax (CIT), concerning a decision by the Income Tax Appellate Tribunal (ITAT), Ahmedabad bench 'C'. The ITAT had ruled that an order passed by the CIT under Section 263 of the Income Tax Act, 1961, was invalid because the original assessment order was passed by the Income Tax Officer (ITO) under Section 143(3) read with Section 144-B of the Act. The revenue contested this finding.

What were the issues?

1. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was right in concluding that since the assessment order was passed by the ITO under Section 143(3) read with Section 144-B of the IT Act, the order of the CIT under Section 263 was invalid? Assessee's Contention: The ITAT, relying on the Special Bench decision in Commissioner of Income Tax v. East Coast Marine Products (P.) Ltd. and Another, held that the CIT was not empowered to revise an order passed by the Assessing Officer under Section 143(3) read with Section 144-B. Revenue's Contention: The revenue argued against the ITAT's conclusion. During the pendency of the reference, the Andhra Pradesh High Court reversed the Special Bench decision in Commissioner of Income Tax v. East Coast Marine Products (P.) Ltd. and Another, 181 ITR 314.

Which sections of the Income-tax Act were involved?

Section 256(1),Section 143(3),Section 144-B,Section 263

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 120 of 1986

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO

-------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus SHREYAS LAND DEVELOPMENT CORPN -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 120 of 1986 NOTICE SERVED for Petitioner No. 1 MR MANISH R BHATT for Respondent No. 1

--------------------------------------------------------------

CORAM : MR.JUSTICE A.R.DAVE and MR.JUSTICE D.A.MEHTA

Date of decision: 09/07/2001

ORAL JUDGEMENT (Per : MR.JUSTICE A.R.DAVE)

1.

At the instance of the revenue, the following question has been referred to this Court for its opinion under the provisions of Section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as "the Act"), by the Income Tax Appellate Tribunal, Ahmedabad bench `C'.

"Whether on the facts and in the circumstances of the case and in law the Tribunal was right in coming to the conclusion that since the assessment order was passed by the I.T.O. u/s 143 (3) read with Section 144-B of the I.T. Act the order of the C.I.T. u/s. 263 was invalid?"

2.

Learned advocate Shri Bharat Naik has appeared for the applicant whereas nobody has appeared for the respondent-assessee, though the respondent has been served.

3.

Learned advocate Shri Bharat Naik has submitted that the tribunal, while passing the impugned order had referred to and relied upon the decision rendered by the Special Bench of the Tribunal in the case of Commissioner of Income Tax v. East Coast Marine Products (P.) Ltd. and Another. After taking into account the decision rendered by the Special Bench in the said case, wherein a similar legal question has been raised, the Tribunal came to the conclusion that the Commissioner of Income Tax was not empowered to take into revision an order passed by the Assessing Officer under Section 143 (3) read with Section 144-B of the Act.

4.

During the pendency of this reference, the decision which was rendered by the Special Bench was under scrutiny of Andhra Pradesh High Court. The Andhra Pradesh High Court has reversed the order passed by the Special Bench in case of Commissioner of Income Tax v. East Coast Marine Products (P.) Ltd. and Another, 181, ITR 314. 5. We have gone through the facts of the case and law laid down by the Andhra Pradesh High Court in case of Commissioner of Income Tax v. East Coast Marine Products (P.) Ltd. and Another. We are in respectful agreement with the judgment delivered in the said case and accordingly we also answer the question referred to us in the negative i.e., in favour of revenue and against the assessee.

The reference stands disposed of with no order as to costs.

9.7.

2001. (A.R. Dave, J.)

(D.A. Mehta, J.)

/phalguni/

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