THE COMMR. OF INCOME TAX vs. THE HY. TOURISM CORP

ITA/117/2007HC Punjab & HaryanaPHHC01072788200716 April 2007Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE RAJESH BINDAL2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the ITAT's order was legally sound. The AO, while exercising jurisdiction under Section 154, cannot rectify an issue that was not disputed or debatable at the time of the original assessment under Section 143(1). Once depreciation was allowed at a particular rate, the AO could not subsequently conclude, under Section 154, that excessive depreciation was allowed, especially when the facts were disputed by the assessee. The Court found no merit in the appeal, upholding the ITAT's decision that the AO's action was outside the scope of Section 154 and therefore without jurisdiction. The appeal was dismissed.

What were the facts?

The appeal was filed by the Commissioner of Income Tax, Panchkula (Revenue) against an order of the Income Tax Appellate Tribunal (ITAT), Chandigarh. The ITAT had ruled in favor of Haryana Tourism Corporation Ltd. (Assessee) for the assessment year 2001-02. The dispute arose from an order passed by the Assessing Officer (AO) under Section 154 of the Income Tax Act, 1961, dated 18.12.2002. In this order, the AO rectified the claim of depreciation that had been accepted while processing the assessee's return under Section 143(1) of the Act. The ITAT found this action to be without jurisdiction.

What were the issues?

1. Whether, in the facts and circumstances of the case, the learned ITAT was right in holding that the AO did not have jurisdiction to carry out any adjustment to the income tax return while framing an intimation under Section 143(1), ignoring the provisions of Section 154(1)(b) of the IT Act, 1961? Assessee's Contention: The ITAT held that for the assessment year 2001-02, the AO lacked jurisdiction to make adjustments to the return while processing it under Section 143(1). Consequently, such an intimation could not be rectified under Section 154 to include issues that the AO could not have considered during the initial processing. The rectification of depreciation claim was deemed outside the scope of Section 154. Revenue's Contention: The Revenue argued that the AO had jurisdiction to rectify the depreciation claim under Section 154(1)(b). The judgment does not explicitly record the Revenue's arguments beyond the question of law posed.

Which sections of the Income-tax Act were involved?

Section 260A,Section 143(1),Section 154,Section 154(1)(b)

AI-generated summary — verify with the full judgment below

ITA 117 of 2007 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

ITA No. 117 of 2007 Date of decision 16.4.2007 The Commissioner of Income Tax, Panchkula. .. Appellant Versus Haryana Tourism Corporation Ltd., Chandigarh .. Respondent CORAM: HON'BLE MR. JUSTICE M.M. KUMAR HON'BLE MR. JUSTICE RAJESH BINDAL PRESENT: Mr. Yogesh Putney, Advocate for the Appellant.

M.M.Kumar, J. This appeal filed under Section 260 A of the Income Tax Act,1961 (for brevity 'the Act') is directed against the order dated 13.9.2006 passed by the Income Tax Appellate Tribunal Bench “B”, Chandigarh in ITA No. 740/Chandi/2003 for the assessment year 2001-02 raising the following substantive question of law: “ Whether in the facts and circumstances of the case the ld. ITAT was right in holding that since the AO did not have any juri iction to carry out any adjustment to the income tax return while framing intimation u/s 143(1), ignoring the clear provisions of Section 154(1)(b) of the IT Act, 1961?” The Tribunal has held that in terms of Finance Act 1991 w.e.f. 1.6.1999, which was applicable to the return of income filed by the assessee for the assessment year 2001-02, the Assessing Officer

The order continues below.

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