IILM EDUCATION PVT LTD vs. COMMISSIONER OF INCOME TAX

PDF · subscribers

ITA/1125/2017HC DelhiDLHC01487339201708 December 2017Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE SANJEEV SACHDEVA2 pages

AI SummaryWithdrawn

What did the High Court hold?

The Delhi High Court observed that the issue of security deposit/fee had been given up before the ITAT, and the assessee had subsequently filed a rectification application under Section 254(2). The Court also noted the Revenue's contention regarding jurisdiction based on the Sterling Agro decision, suggesting that the Punjab and Haryana High Court might be the appropriate forum. Given that there was no adjudication on the merits of the case, the High Court opined that it was open to the assessee to approach the appropriate court for remedy if an adverse decision arose from the Section 254(2) proceedings. The issue of depreciation was also kept open for consideration in subsequent proceedings. In light of these observations, the assessee sought and was granted liberty to withdraw the appeal.

What were the facts?

The assessee, IILM Education Pvt Ltd, filed an appeal under Section 260A of the Income Tax Act, 1961, before the Delhi High Court. The appeal challenged an order (presumably of the Income Tax Appellate Tribunal - ITAT, though not explicitly stated as the authority whose order is under challenge, but implied by the context of Section 260A appeals) concerning two grounds: depreciation and disallowance of a security deposit liability. The Revenue, represented by the Commissioner of Income Tax, raised preliminary objections regarding jurisdiction, citing the Sterling Agro decision, and noted that the issue of security deposit had been given up before the ITAT, with a rectification application under Section 254(2) pending. The High Court observed that there was no adjudication on the merits.

What were the issues?

1. Whether the Delhi High Court has the jurisdiction to hear the appeal under Section 260A of the Income Tax Act, 1961, given the location of the CIT(Appeals) and the precedent set in Sterling Agro (AIR 2007 Delhi 174)? Assessee's contentions: The assessee urged two grounds for appeal: the question of depreciation and the disallowance made on account of security deposit liability. Revenue's contentions: The Revenue argued that the ITAT had recorded that the issue of security deposit/fee had been given up by the assessee. They also pointed out that the CIT(Appeals) was based in Gurgaon, and based on the Sterling Agro decision, the Punjab and Haryana High Court would have proper jurisdiction. The Revenue further noted that there had been no adjudication on the merits of the case.

Which sections of the Income-tax Act were involved?

Section 260A,Section 254(2)

AI-generated summary — verify with the full judgment below

ITA 1125/2017 Page 1 $~16 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 1125/2017 IILM EDUCATION PVT LTD ..... Appellant Through: Mr. Sandeep Mittal and Mr. Vinod Kathwalia, Advs. versus COMMISSIONER OF INCOME TAX ..... Respondent Through: Mr. Asheesh Jain, Sr. Standing Counsel with Mr. Shahrukh Ejaz, Adv. for Income Tax Deptt. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE SANJEEV SACHDEVA O R D E R % 08.12.2017 The assessee urges two grounds for its appeal under Section 260A of the Income Tax Act, 1961, firstly – the question of depreciation and secondly the disallowance made on account of security deposit liability. Counsel for the Revenue urges, at the outset that the ITAT had recorded that the issue of security deposit/fee had been given up in the ITAT and the assessee had subsequently preferred an application for rectification under Section 254(2). The Revenue also points out that the CIT(Appeals) in this case is based in Gurgaon and that on the strength of the decision of the larger bench in Sterling Agro, the Court under 260A having proper jurisdiction would be Punjab and Haryana High Court (ref: AIR 2007 (Delhi) 174). In the light of the above, the Court of the opinion that it is open

ITA 1125/2017 Page 2 to the assessee to approach the appropriate court for remedy in the event of an adverse decision under Section 254(2) since there is no adjudication. The issue of depreciation too be kept open for consideration in the said subsequent proceedings. Learned counsel for the assessee seeks liberty to withdraw the appeal in the light of above observations. The appeal is dismissed as withdrawn. S. RAVINDRA BHAT, J SANJEEV SACHDEVA, J DECEMBER 08, 2017 ‘rs’

Recent GST High Court judgments

Search GST case law →