COMMISSIONER OF INCOME TAX CENTRAL LUDHIANA vs. SATISH BALA MALHOTRA AND ORS

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ITA/218/2013HC Punjab & HaryanaPHHC01105073201311 August 2016Bench: MR. JUSTICE J.C. VERMA,MR. JUSTICE AJAY KUMAR MITTAL2 pages

AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal would require to be dismissed in any event, without going into the question of the maintainability of the rectification application before the Tribunal. This decision was based on the High Court's own interim order dated 28.10.2013 in ITA No. 232 of 2012. In that interim order, the Division Bench had already held that there was no reason to differ with the Tribunal's opinion that the deceased assessee was the owner of the property in his personal capacity and a shareholder of the company as Karta of his HUF, and that the property was agreed to be sold by the assessee in his individual capacity and not as Karta of the HUF. Consequently, the Division Bench had concluded that the Tribunal had rightly deleted the addition on account of deemed dividend. The ratio decidendi is that if a higher court has already made a finding on an issue, a subsequent appeal challenging the dismissal of a rectification application related to that same issue, without addressing the merits of the rectification itself, will be dismissed based on the prior finding.

What were the facts?

This appeal by the Commissioner of Income Tax (Central), Ludhiana, is against the Income Tax Appellate Tribunal's (ITAT) order dismissing the Revenue's miscellaneous application for rectification under Section 254(2) of the Income Tax Act, 1961. The assessment year in question is 2006-07. The rectification application pertained to an issue of deemed dividend. The original appeal against the order sought to be rectified was filed before the High Court as ITA No. 232 of 2012. A Division Bench of the High Court, in an interim order dated 28.10.2013 in ITA No. 232 of 2012, had already held that the Tribunal had rightly deleted the addition on account of deemed dividend, finding no reason to differ with the Tribunal's opinion that the deceased assessee was the owner of the property in his personal capacity and a shareholder of the company as Karta of his HUF, and that the property was agreed to be sold in his individual capacity.

What were the issues?

1. Whether the Tribunal was justified in dismissing the Revenue's miscellaneous application for rectification under Section 254(2) of the Income Tax Act, 1961, concerning the issue of deemed dividend for assessment year 2006-07? Assessee's Contentions: The judgment does not record specific contentions made by the assessee regarding the rectification application itself. However, the High Court's interim order dated 28.10.2013, which is relied upon, indicates the assessee's position that the deceased assessee was the owner of the property in his personal capacity and a shareholder of the company as Karta of his HUF, and that the property was agreed to be sold in his individual capacity, leading to the deletion of the deemed dividend addition by the Tribunal. Revenue's Contentions: The Revenue filed a miscellaneous application for rectification before the Tribunal. The judgment does not explicitly detail the Revenue's arguments before the High Court in the present appeal (ITA No. 218 of 2013), other than stating that it is an appeal against the Tribunal's dismissal of their rectification application.

Which sections of the Income-tax Act were involved?

Section 254(2)

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH

ITA No. 218 of 2013 (O&M) Date of decision:- 11.08.2016

Commissioner of Income Tax (Central), Ludhiana ..Appellant Versus

Smt. Satish Bala Malhotra and others

...Respondents

CORAM: HON'BLE MR. JUSTICE S. J. VAZIFDAR, CHIEF JUSTICE

HON’BLE MR. JUSTICE DEEPAK SIBAL

Present: Mr. Rajesh Katoch, Advocate for the appellant.

Mr. Pankaj Jain, Senior Advocate with

Mr. Sachin Bhardwaj, Advocate

Mr. Divya Suri, Advocate

Mr. Gaurav Mittal, Advocate for the respondents. * * * * S.J. VAZIFDAR, C.J. (ORAL)

This is an appeal against the order of the Tribunal dismissing the appellant’s miscellaneous application for rectification under Section 254 (2) of the Income Tax Act 1961. The matter pertains to the assessment year 2006-07. The application for rectification was in respect of the issue pertaining to deemed dividend. The appeal against the order sought to be rectified by the miscellaneous application was filed before this Court being ITA No. 232 of 2012. That appeal also raised other issues. As far as the issue of deemed dividend is concerned, the Division Bench by an interim order dated 28.10.2013 held that there was no reason to differ with the opinion recorded by the Tribunal because it was apparent that the deceased assessee was the owner of the property in his personal capacity and shareholder of the company as a Karta of his HUF and that the property was agreed to be sold by the assessee in his individual capacity and not as the Karta of the HUF. The Division Bench held that the Tribunal, therefore, rightly deleted the addition on account of deemed dividend. The Division Bench accordingly issue notice of motion in ITA No. 232 of 2012 only on the other issues. Incidentally, we disposed of the said appeal in respect of the other issues also by a separate order and judgment passed today. VERMA KUMUD 2016.08.27 15:01 I attest to the accuracy and authencity of this document Chandigarh

ITA No. 218 of 2013 (O&M)

-2-

In view of the order of the Division Bench dated 28.10.2013, this appeal would require to be dismissed in any event without going into the question as to the maintainability of the application for rectification before the Tribunal.

The appeal is accordingly dismissed.

(S.J. VAZIFDAR) CHIEF JUSTICE

(DEEPAK SIBAL)

JUDGE 11.08.2016 kv Whether speaking/reasoned

: Yes/No

Whether reportable

: Yes/No

VERMA KUMUD 2016.08.27 15:01 I attest to the accuracy and authencity of this document Chandigarh

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