COMMISSIONER OF INCOME TAX vs. DARSHAN KUMAR

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ITA/529/2006HC Punjab & HaryanaPHHC01075261200622 April 2008Author: MR JUSTICE RAKESH KUMAR GARG,MR. JUSTICE SATISH KUMAR MITTAL2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court noted that when the ITAT passed its impugned order on January 19, 2006, the amendment to Section 148 of the Income Tax Act, inserted by the Finance Act, 2006 with retrospective effect from October 1, 1991, had not yet been considered. Since there was no occasion for the ITAT to consider this subsequent amendment, both the Revenue and the Assessee agreed that the impugned order should be set aside and the matter remitted back to the ITAT. The High Court accepted this agreement and set aside the ITAT's order dated January 19, 2006. The matter was remanded to the ITAT to reconsider the issue afresh, taking into account the amendment to Section 148 of the Income Tax Act and on merits, in accordance with the law. No specific finding was given on the merits of the addition itself.

What were the facts?

The Revenue, Commissioner of Income Tax, Faridabad, filed an appeal under Section 260-A of the Income Tax Act against an order dated January 19, 2006, passed by the Income Tax Appellate Tribunal (ITAT), Delhi Bench. The ITAT had deleted an addition of Rs. 8,05,000/- made in an assessment under Section 143(3) read with Section 147 of the Income Tax Act for the assessment year 1994-95. The appeal was filed to challenge the ITAT's decision regarding the deletion of this addition. The procedural history involves the assessment, the ITAT's order, and the subsequent appeal to the High Court.

What were the issues?

1. Whether, on the facts and circumstances of the case, the ITAT was right in law in deleting the addition of Rs. 8,05,000/- by quashing the assessment made under Section 143(3) read with Section 147 of the Income Tax Act, in view of the second proviso to sub-section (1) of Section 148 inserted by the Finance Act, 2006 with retrospective effect from October 1, 1991. The Revenue's contention was that the ITAT's order should be examined in light of the amendment to Section 148 of the Income Tax Act. The Assessee's contention was not recorded, but both parties agreed to a remand. The core of the dispute revolves around the applicability and interpretation of the newly inserted proviso to Section 148(1) of the Income Tax Act.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 143(3),Section 147,Section 148

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. I.T.A. No. 529 of 2006 DATE OF DECISION : 22.04.2008 Commissioner of Income Tax, Faridabad .... APPELLANT Versus Mr. Darshan Kumar C/o Rakesh Raj & Associates, Faridabad ..... RESPONDENTS CORAM :- HON'BLE MR. JUSTICE SATISH KUMAR MITTAL HON'BLE MR. JUSTICE RAKESH KUMAR GARG

Present: Mr. Yogesh Putney, Advocate, for the appellant-revenue. Mr. S.K. Mukhi, Advocate, for the respondent-assessee. * * * SATISH KUMAR MITTAL , J. ( Oral ) The revenue has filed this appeal under Section 260-A of the Income Tax Act against the order dated 19.1.2006, passed by the Income Tax Appellate Tribunal, Delhi Bench `E' Delhi in ITA No. 1117 (Del) of 2004 for the assessment year 1994-95, raising the following substantial question of law for consideration of this Court : “Whether on the facts and circumstances o the case, the ITAT is right in law in deleting addition of Rs. 8,05,000/- by quashing the assessment made under Section 143 (3) read with Section 147 of the Income Tax Act, in view of the second proviso to ITA No. 529 of 2006 -2- sub section (1) of section 148 inserted by the Finance Act, 2006 with retrospective effect from 01.10.1991.”

We have heard counsel for both the parties. Undisputedly, when the Tribunal passed the impugned order on 19.1.2006, the amendment inserted in section 148 of the Income Tax Act by the Finance Act, 2006 with retrospective effect from 1.10.1991 was not considered, as there was no occasion for the Tribunal to consider it, because the same was effected subsequently. In view of this fact, counsel for both the parties have agreed that the impugned order be set aside and the matter be remitted to the Tribunal to consider the matter afresh in the light of the aforesaid amendment as well as on merits. In view of the above, the impugned order dated 19.1.2006, passed by the Income Tax Appellate Tribunal, Delhi Bench `E' Delhi is set aside and the matter is remanded to the Tribunal to consider the matter afresh in the light of the amendment inserted in section 148 of the Income Tax Act by the Finance Act, 2006 with retrospective effect from 1.10.1991, as well as on merits, in accordance with law. Appeal stands disposed of accordingly.

( SATISH KUMAR MITTAL ) JUDGE April 22, 2008 ( RAKESH KUMAR GARG ) ndj JUDGE

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