THE COMMISSIONER OF IT vs. VIVEK GUPTA

Income-tax Appeal No. 485 of 2005 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ---- Income tax Appeal No. 485 of 2005 Date of decision: 8.11.2010 The Commissioner of Income Tax Karnal --- Appellant Versus Vivek Gupta --- Respondent ---- CORAM: HON’BLE MR. JUSTICE ADARSH KUMAR GOEL HON’BLE MR. JUSTICE AJAY KUMAR MITTAL ---- PRESENT:Mr. Yogesh Putney, Advocate for the appellant. Mr. Avneesh Jhingan, advocate for the respondent. ---- AJAY KUMAR MITTAL, J. This order will dispose of Income-Tax Appeal Nos. 485 and 486 of 2005 as the question of law involved therein is common. The facts have been taken from Income Tax Appeal No. 485 of 2005. This appeal under Section 260A of the Income-tax Act, 1961 (for short “the Act’”) has been filed by the Revenue against the order dated 28.3.2005, passed by the Income Tax Appellate Tribunal,

Income-tax Appeal No. 485 of 2005 2 Chandigarh Bench (B), Chandigarh, (in short “the Tribunal”) in ITA No. 793/Chandi/2004 relating to the assessment year 1994-95. The Revenue’s appeal was admitted on 23.10.2006 for determination of the following substantial question of law by this Court: “Whether on the facts and in the circumstances of the case, the Hon’ble ITAT was right in law in cancelling the order of the CIT(A) in sustaining the action of the Assessing Officer u/s 143(3)/147 as the ratio of judgment of the Hon’ble Supreme Court of India in the case of V. in favour of the Revenue?” Briefly, the facts necessary for adjudication as narrated in the appeal are that the Revenue having come to know that the respondent-assessee had made payment of certain amount to the Haryana Urban Development Authority and the said amount was not accounted for in his books of accounts, initiated proceedings against him, under Section 148 of the Act. The assessing officer framed assessment under Section 143(3) at total income of Rs. 1,07,120/- as against the returned income of Rs. 39,000/- by making the addition of disallowance under Section 40A(3), disallowance of sales tax liability, low withdrawals and unexplained credits etc. ,(Annexure A-1). The assessee filed appeal before the Commissioner of Income Tax (Appeals), [hereinafter referred to as “CIT(A)”] against the order of the assessing officer. The CIT(A) confirmed the order, Annexure A-1, and dismissed the assessee’s appeal, vide order

Income-tax Appeal No. 485 of 2005 3 dated 22.4.2004, Annexure A-2. The respondent-assessee thereafter moved an application under Section 154 of the Act for rectification of the mistake in the order, Annexure A-2. The application was also dismissed, vide order dated 30.6.2004, Annexure A-3. The respondent-assessee went in appeal before the held that initiation of proceedings u/s 147 of the Act could be made only in respect of items of under assessment and finality of other issue in such proceedings were not affected.

We have heard learned counsel for the parties and have perused the record. This Court in Income-tax Appeal No. 421 of 2010, Manjinder Singh Kang Vs. Commissioner of Income-tax, Amritsar and another, decided on 13.9.2010, while dealing with the similar issue had held that after insertion of Explanation 3 to Section 147 of the Act, by Finance (No.2) Act, 2009 retrospectively, w.e.f. 1.4.1989, the assessing officer has power to make additions even on the ground on which reassessment notice might not have been issued in case during the reassessment proceedings, he reaches a conclusion that there had been escapement of some other income which comes to his notice during those reassessment proceedings. In view of the above, the substantial question of law is answered in favour of the Revenue. The appeals are consequently

Income-tax Appeal No. 485 of 2005 4 allowed. Since the Tribunal had not decided other grounds raised by the assessee, the matter is remanded to the Tribunal for deciding other issues in accordance with law. (AJAY KUMAR MITTAL) JUDGE (ADARSH KUMAR GOEL) November 8, 2010 JUDGE *rkmalik*