COMMISSIONER OF INCOME TAX (EXEMPTIONS) vs. SHREE JAIN SAMITI

PDF · subscribers
ITA/47/2019HC RajasthanRJHC02039363201919 August 2019Author: S. RAVINDRA BHAT,INDERJEET SINGH2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the substantial question of law urged by the Revenue did not arise in this case. The Court noted that after the remand order dated 10.02.2017, the Commissioner sought additional documents on 14.08.2017 and 10.10.2017, with a hearing on 10.12.2017. The Court found that even considering a reasonable period for receipt of notice after remand, the Commissioner acted beyond the basic period stipulated under Section 12(2). Consequently, the question of whether the period contemplates remanded proceedings did not arise. The Court explicitly kept this question open for future consideration. For the stated reasons, no interference was called for.

What were the facts?

The assessee, Shree Jain Samiti, applied for exemption under Section 12AA of the Income Tax Act on 09.03.2016. The application was initially rejected on 15.09.2016. An appeal by the assessee led to a remand order on 10.02.2017. Subsequently, the Commissioner sought further documents and ultimately rejected the application again under Section 12AA(2) for want of these materials. The Income Tax Appellate Tribunal (ITAT) ruled in favor of the assessee, holding that Section 12AA(2) applied. The Revenue appealed this decision to the High Court.

What were the issues?

1. Whether the deeming fiction under Section 12AA(2) of the Income Tax Act applies to remanded proceedings. The Revenue argued that the deeming fiction would not apply per se to remanded proceedings. Additionally, the Revenue contended that in the facts of this case, the assessee did not deserve the application of the deeming fiction as it never produced the requested documents. 2. Whether the Commissioner acted within the stipulated period under Section 12(2) of the Income Tax Act when rejecting the assessee's application after remand. The Revenue's appeal was based on a substantial question of law concerning the interpretation of Section 12AA(2).

Which sections of the Income-tax Act were involved?

12AA(2), 12(2)

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 47/2019 Commissioner Of Income Tax (Exemptions), 3Rd Floor, Kailash Heights, Lal Kothi, Tonk Road, Jaipur ----Appellant Versus Shree Jain Samiti, Plot No. 2, Behind Maheshwari Bhawan, Jhalawar Road, Kota ----Respondent For Appellant(s) : Mr. Sameer Jain with Mr. Daksh Pareek For Respondent(s) : HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE INDERJEET SINGH

Judgment 19/08/2019

1.

The Revenue’s appeal urges a substantial question of law with respect to interpretation of Section 12AA(2) of the Income Tax Act. The assessee had sought exemption under that provision by an application made on 09.03.2016. In due compliance with the law, that application was decided on 15.09.2016, declining the request. The assessee’s appeal resulted in a remand - by an order dated 10.02.2017. Thereafter, the Commissioner did not decide the remand but sought further documents and ultimately rejected that application under Section 12AA(2) (for want of those materials). The assessee’s appeal to the ITAT succeeded and it was held that Section 12AA(2) (by which the application is decided by deeming fiction), applied to the circumstances of the case.

2.

Learned counsel made two-fold arguments; (i) that the deeming fiction would not apply per se to remanded proceedings and (ii) that in the facts of this case, the assessee did not deserve application of the deeming fiction since it never produced the documents sought.

(2 of 2) [ITA-47/2019]

3.

This court is of the opinion that the substantial question of law urged by the Revenue does not arise in this case. The facts on record reveal that after the order remanding the application, the Commissioner-I wrote to the assessee seeking additional documents on 14.08.2017; further documents were sought on 10.10.2017 under a hearing given on 10.12.2017. Clearly even if a reasonable period is accepted for receipt of the notice (after remand dated 10.02.2019), the Commissioner acted beyond the basic period stipulated under Section 12(2). In these circumstances, the question urged, i.e., whether the period contemplates remanded proceedings also does not arise. This question however is kept open.

4.

For the foregoing reasons, this court is of the opinion that no interference is called for.

5.

The appeal is dismissed. (INDERJEET SINGH),J (S. RAVINDRA BHAT),CJ ANIL KUMAR GOYAL /Jyoti/166

Recent GST High Court judgments

Search GST case law →