M/S BANSAL POLUTRY AND FEED INDUSTRIES vs. COMMR. OF INCOME TAX LDH. AND ANR.

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ITA/439/2006HC Punjab & HaryanaPHHC01075160200605 February 2007Author: MR. JUSTICE M.M. KUMAR,MR. JUSTICE RAJESH BINDAL4 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the issue on merits was squarely covered by the Supreme Court's judgment in Commissioner of Income-Tax Vs. Venkateswara Hatcheries (P.) Ltd. and others. The Court rejected the assessee's contention that proceedings under Section 148 could not be initiated, stating that a subsequent judgment constitutes information enabling action under Section 148. Regarding the interest under Section 234B, the matter was remitted to the Commissioner of Income Tax (Appeals) for a fresh decision on merits. The Court found no substantial question of law arising from the appeal and dismissed it. The ratio decidendi is that a subsequent Supreme Court judgment providing new interpretation of law can constitute 'information' for initiating reassessment proceedings under Section 148, and a remand order is not appealable. The Court did not expressly leave any issue undecided, but the decision on interest under Section 234B was deferred to the CIT(A).

What were the facts?

The assessee, M/s Bansal Poultry and Feed Industries, engaged in the poultry farm business, had initially been granted deductions under Sections 80-I, 80-JJ, and 80-HH of the Income Tax Act, 1961, for assessment years 1996-97 and 1997-98. Subsequently, proceedings under Section 148 of the Act were initiated due to a judgment from the Hon'ble Supreme Court in Commissioner of Income-Tax Vs. Venkateswara Hatcheries (P.) Ltd. and others (1999) 237 ITR 174. The assessee appealed to the High Court against the order of the Income Tax Appellate Tribunal dated 4.4.2006.

What were the issues?

1. Whether the disallowance of deduction by the authorities below, relying on the Hon'ble Apex Court's judgment without appreciating the specific facts and circumstances of the assessee's case, is legally sustainable? (Question of law and fact, concerning the application of a Supreme Court judgment). 2. Whether the authorities below failed to consider that the issue regarding interest under Section 234B of the Act had already been decided, and if their action is legally sustainable? (Question of law and fact, concerning procedural consideration). 3. Whether the impugned orders are legally sustainable? (General question of law and fact). Assessee's Contentions: The assessee argued that proceedings under Section 148 could not be initiated after the Supreme Court's judgment. The assessee also contended that the issue of interest under Section 234B had already been decided. Revenue's Contentions: The judgment does not record specific contentions from the revenue, but it implies the revenue supported the actions taken by the authorities below.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 148,Section 80-I,Section 80-JJ,Section 80-HH,Section 234B

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
I.T.A. No.439 of 2006 -1- *** IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.A. No.439 of 2006 Date of decision: 5.2.2007 M/S Bansal Polutry and Feed Industries, Sherpur Road, village Benra, Dhuri, District Sangrur ...Petitioner Versus Commissioner of Incme Tax, Ludhiana and another ...Respondents CORAM: HON'BLE MR.JUSTICE M.M.KUMAR HON'BLE MR.JUSTICE RAJESH BINDAL Present: Mr.Aman Bansal, Advocate for the appellant. **** RAJESH BINDAL, J. The appellant has approached this Court by filing the present appeal under Section 260-A of Income Tax Act, 1961 (for short 'the Act') against the order dated 4.4.2006 passed by the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh (for short 'the Tribunal') in ITA Nos. 233 & 234/Chandi/2003 in respect of the assessment years 1996-97 & 1997-98 by seeking to raise the following substantial questions of law:- 1. Whether in the facts and circumstances of the present case, the action of authorities below to disallow the

deduction relying upon the Hon'ble Apex judgment without appreciating the true facts and circumstances of the present case is legally sustainable in the eyes of law?

2.

Whether in the facts and circumstances of the present case, the action of the authorities below not to consider

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-2- *** that the issue regarding interest under section 234 B of the Act has already been decided by the authorities below, is legally sustainable in the eyes of law?

3.

Whether in the facts and circumstances of the present case the impugned orders Annexure A-1 and A-3 are legally sustainable in the eyes of law?” Briefly the facts are that the assessee who is engaged in the business of poultry farm was granted deduction under Sections 80-I, 80-JJ and 80-HH of the Act, while framing the assessment. However, subsequent thereto in view of judgment of Hon’ble the Supreme Court in Commissioner of Income-Tax Vs. Venkateswara Hatcheries (P.) Ltd. and others (1999) 237 ITR 174, proceedings under Section 148 of the Act were initiated. At the time of hearing, it could not be denied by the learned counsel for the appellant that as far as the issue on merits is concerned, the same is squarely covered by the judgment of Hon’ble Supreme Court in Venkateswara's case (Supra), however, he was at pains to contend that the proceedings could not be initiated under Section 148 of the Act after the judgment of Hon’ble Supreme Court. However, he failed to persuade us to accept that a subsequent judgment did not constitute information enabling action under Section 148 of the Act. As far as levy of interest under under Section 234 B of the Act is concerned, the matter has merely been remitted to the Commissioner of Income Tax (Appeals) for fresh decision on merits in accordance with law. Against the order of remand no appeal is maintainable. In view of our above discussions, we do not find that any substantial question of law would arise in the present appeal and the same is dismissed. (Rajesh Bindal) Judge February 05 ,2007 (M.M.Kumar) Pka Judge

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-3- ***

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-4- *** This appeal has been preferred under Section 260-A of Income Tax Act, 1961 proposing the following substantial question of law arising out of the common order dated 4.4.2006 of the Income Tax Appellate Tribunal, Chandigarh Bench 'B', Chandigarh passed in ITA Nos. 233 & 234/Chandi/2003 in respect of the assessment years 1996-97 & 1997-98:-

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