C.I.T vs. SUBHASH CHANDER

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ITR/65/1992HC Punjab & HaryanaPHHC01022012199223 November 2006Author: MR. JUSTICE ADARSH KUMAR GOEL,MR. JUSTICE RAJESH BINDAL2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court answered both questions of law in favour of the revenue and against the assessee. For the first issue, the court noted that it had previously dealt with this question in ITR Nos. 131 and 133 of 1995 (The Commissioner of Income tax, Haryana, Rohtak v. M/s. Vijay Kumar HUF V& PO Nagina, Gurgaon), decided on 1.11.2006. In that decision, following the Supreme Court's judgment in M/s. K.Govindan's case, the question was answered in favour of the revenue. Therefore, the assessment framed after the notice under Section 148 was considered a 'Regular Assessment'. Consequently, the second issue, which was contingent on the first, was also decided against the assessee. The court did not explicitly mention the Section 263 order cancellation but the implication of answering the first question in favour of the revenue suggests that the ITAT's finding on the 'mistake apparent' might be re-evaluated or considered incorrect in light of the 'regular assessment' finding. The reference was disposed of accordingly.

What were the facts?

This case involves a reference to the High Court by the Income Tax Appellate Tribunal (ITAT) concerning assessment year 1981-82. The ITAT's order, dated 31.7.1990, in ITA No.1513(ASR)/1989, is under challenge. The assessment was framed for the first time on 31.5.1985, after a notice under Section 148 of the Income Tax Act, 1961. The Commissioner of Income Tax, Jalandhar, is the petitioner (revenue), and Shri Subash Chander is the respondent (assessee). The dispute revolves around whether the assessment could be considered a 'Regular Assessment' and the validity of cancelling an order passed by the Commissioner under Section 263.

What were the issues?

The High Court was asked to decide two questions of law: 1. Whether, on the facts and in the circumstances, the ITAT was right in law in holding that an assessment framed for the first time on 31.5.1985, after issuing a notice under Section 148 for assessment year 1981-82, could not be regarded as a 'Regular Assessment', even after the introduction of Explanation 2 to Section 139(8) and sub-section (6) to Section 215 by the Taxation Laws (Amendment) Act, 1984, which stipulated that assessments under Section 147 would be considered 'Regular Assessments'. 2. Whether, on the facts and in the circumstances, the ITAT was right in law in cancelling the order passed by the Commissioner of Income Tax under Section 263, by holding that the chargeability of interest under Sections 139(8) and 215/217 was a mistake apparent from the records, justifying the Income Tax Officer's action under Section 154. Contentions: Assessee: No arguments are recorded for the assessee. Revenue: Relied on the Supreme Court judgment in M/s. K.Govindan and Sons v. CIT, Cochin, arguing that an assessment made after issuing a notice under Section 148 was also a regular assessment for the purposes of Sections 139(8) and 215/217.

Which sections of the Income-tax Act were involved?

Section 148,Section 139(8),Section 215,Section 217,Section 147,Section 263,Section 154

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
ITR No.65 of 1992 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No.65 of 1992 Date of decision:23.11.2006 The Commissioner of Income Tax, Jalandhar ....Petitioner versus Shri Subash Chander C/o M/s Lucky Iron Store, Jalandhar. ....Respondent CORAM: HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE RAJESH BINDAL Present: Dr. N.L.Sharda, Advocate, for the revenue.

JUDGMENT: Following questions of law have been referred for the opinion of this Court by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar, (for short, 'the Tribunal') arising out of its order dated 31.7.1990 in ITA No.1513(ASR)/1989, for the assessment year 1981-82:- “1. Whether on the facts and in the circumstances of the case, the Tribunal is right in law in holding that assessment framed for the first time on 31.5.1985, though after the issue of notice under section 148, relating to the assessment year 1981/82 cannot be regarded as a “Regular Assessment” even after the introduction of explanation 2 to section 139(8) and introduction of sub section (6) to section 215 by the Taxation Laws (Amendment) Act, 1984 w.e.f 1.4.1985, according to which the assessment made under section 147 for the first time shall be regarded as a “Regular Assessment”?

2.

Whether on the facts and in the circumstances of the case the Tribunal was right in law in cancelling the order passed by the Commissioner of Income tax, Jalandhar under section 263 of the Income Tax Act, 1961 by holding that the chargeability of interest under section 139(8) and 215/217 of the Act was a mistake apparent

ITR No.65 of 1992 2 from the records so as to justify the action of the ITO in passing order under section 154 of the Income Tax Act, 1961?” Learned counsel for the revenue relies upon judgment of the Hon'ble Supreme Court in M/s. K.Govindan and Sons v. CIT, Cochin, AIR 2001 SC 254 and submits that assessment after issuance of notice under section 148 of the Income tax Act, 1961 (for short, 'the Act') was also regular assessment for purposes of Sections 139(8) and 215/217 of the Act. None appears for the assessee. This Court has already gone into this question, inter-alia, in ITR Nos.131 and 133 of 1995, The Commissioner of Income tax, Haryana, Rohtak v. M/s. Vijay Kumar HUF V& PO Nagina, Gurgaon, decided on 1.11.2006, wherein, following judgment of the Hon'ble Supreme Court in M/s. K.Govindan's case (supra), the question was answered in favour of the revenue and against the assessee. Accordingly, the question referred is answered in favour of the revenue and against the assessee. Reference is disposed of accordingly. (Adarsh Kumar Goel) Judge November 23, 2006 (Rajesh Bindal) 'gs' Judge

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