THE COMMISSIONER OF INCOME TAX vs. LATE SHRI BHAGWAN DAS THAWRANI
What did the High Court hold?
The High Court allowed the review application and recalled its order dated 02.11.2016. The Court found that the revenue's appeal, which was on the issue of valuation of excess stock, was indeed disposed of as if it related to bogus purchases, a fact not denied by the revenue's counsel. The Court reasoned that this mischaracterization warranted recalling the order. Furthermore, in view of the reassessment and demand created against the assessee following the recalled order, the Court directed status quo with regard to any demand created. Consequently, no amount based on the reassessment order passed subsequent to the recalled order of 02.11.2016 was to be recovered from the assessee until further orders. The Court directed that DB Income Tax Appeal No. 330/2011 be listed for admission.
What were the facts?
The Commissioner of Income Tax (CIT), Jaipur-I, filed a review application seeking to recall an order dated 02.11.2016 passed by the Rajasthan High Court in DB Income Tax Appeal No. 330/2011. The review applicant (CIT) contended that the appeal, which pertained to the valuation of excess stock, was disposed of as if it related to bogus purchases. The respondent-assessee, represented by Mr. Anuroop Singhi, did not deny this assertion. The High Court condoned the delay in filing the review application. Following the recall of the order, the assessee's counsel, Mr. Javed Khan, submitted that the assessee had been reassessed and the original demand modified by the ITAT based on the recalled order. He requested a direction for status quo regarding the demand created in the interim.
What were the issues?
1. Whether the High Court's order dated 02.11.2016 in DB Income Tax Appeal No. 330/2011, which disposed of an appeal concerning the valuation of excess stock, should be recalled on the grounds that it was erroneously treated as relating to bogus purchases. Assessee's Contention: The assessee argued that the High Court's order dated 02.11.2016, which is now recalled, led to a reassessment and modification of the original demand by the ITAT. Given that the appeal is to be heard afresh, the assessee sought a direction for status quo regarding the demand created in the interim, based on the principle of restitution. Revenue's Contention: The revenue, through its counsel, did not deny the assessee's assertion that the appeal concerning the valuation of excess stock was disposed of as if it related to bogus purchases. The revenue did not present any arguments against the recall of the order or the direction for status quo.
AI-generated summary — verify with the full judgment below
Cause title — parties, addresses and appearances
Order 11/01/2019 The matter comes up on an application for condonation of delay in filing the review application.
(2of 3) [CRW-105/2018] Heard counsel for the parties. The application for condonation of delay in filing the review application stands allowed for the reasons stated therein. Heard on the application for review of the order dated 2.11.2016 in DB Income Tax Appeal No.330/2011. The case of the applicant, seeking review of the order dated 2.11.2016 passed by the Division Bench of this Court in Income Tax Appeal No.330/2011, is that albeit the appeal before this Court pertained to the issue a valuation of excess stock, it was disposed of, apparently for reasons of being connected with some matter relating to the bogus purchases, as such. Mr.Anuroop Singhi counsel for the respondent-non applicant-CIT is not in a position to deny the fact asserted by the applicant that albeit the revenue’s appeal was on a matter relating to valuation of excess stocks it was disposed of as if relating to bogus purchases. In this view of the matter the order dated 2.11.2016 disposing of the appeal, deserves to be recalled. The order dated 2.11.2016 is recalled and the review application is accordingly allowed. The D.B. Income Tax Appeal No.330/2011 be listed for admission.
(2of 3) [CRW-105/2018] Mr.Javed Khan counsel for the applicant then submitted that following the order passed in this appeal on 2.11.2016, which now stands recalled, the respondent applicant has been reassessed and the original demand modified by the ITAT recreated. He submitted that now as the order dated 2.11.2016 has been recalled and the revenue’s appeal is to be heard afresh, it would only be appropriate on the principle of restitution to direct status-quo qua demand created in the meanwhile. In this view of the facts before us and submissions made, we would direct status quo with regard to any demand created against the petitioner- assessee following the Court’s (now recalled) order dated 2.11.2016. Consequently, no amount based on the order of reassessment passed subsequent to the order dated 2.11.2016 passed by this Court be recovered from the respondent- non applicant till further orders List DB Income Tax Appeal No.330/2011 for admission. (MAHENDRA MAHESHWARI), J (ALOK SHARMA), J Himanshu/1
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