PRINCIPAL COMMISSIONER OF INCOME TAX-7 vs. M/S. RELX INDIA PVT. LTD.

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ITA/256/2018HC DelhiDLHC01498382201727 February 2018Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE A. K. CHAWLA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that no substantial question of law arises from the ITAT's order. The Court affirmed the ITAT's view that re-opening of assessment based solely on audit objections is impermissible. This principle was established by the Supreme Court in Commissioner of Income Tax vs. Kelvinator of India. The High Court also noted its own prior rulings against the Revenue on this specific issue, relying on judgments from other High Courts. Consequently, the Revenue's appeal was dismissed. No specific amount in dispute was mentioned. The operative direction was the dismissal of the appeal.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax-7, filed an appeal under Section 260A of the Income Tax Act, 1961, challenging an order passed by the Income Tax Appellate Tribunal (ITAT). The ITAT had set aside a final re-assessment order issued by the Assessing Officer (AO). The re-opening of the assessment and the AO's "reasons to believe" for issuing the notice under Section 147 were predicated on audit objections received by the Revenue. The ITAT's decision was based on the principle that re-opening assessments solely on audit objections is impermissible, citing the Supreme Court's judgment in Commissioner of Income Tax vs. Kelvinator of India.

What were the issues?

1. Whether the ITAT erred in setting aside the re-assessment order when the re-opening of assessment under Section 147 was based on audit objections received by the Revenue? (Question of law) The Revenue contended that the ITAT's decision was erroneous. While the judgment does not explicitly detail the Revenue's specific arguments beyond the fact that the re-opening was based on audit objections, it implies the Revenue sought to uphold the AO's action. The Assessee (M/s. RELX INDIA PVT. LTD.) argued, through the ITAT's decision, that re-opening an assessment based solely on audit objections is not a valid ground. This position was supported by judgments of various High Courts, including the Punjab and Haryana High Court and the Madras High Court, and ultimately the Supreme Court in Commissioner of Income Tax vs. Kelvinator of India.

Which sections of the Income-tax Act were involved?

Section 260A,Section 147

AI-generated summary — verify with the full judgment below

$~41 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 256/2018

PRINCIPAL COMMISSIONER OF INCOME TAX-7..... Appellant Through Mr. Sanjay Kumar and Mr. Rahul Chaudhary, Standing Counsel.

versus

M/S. RELX INDIA PVT. LTD.

..... Respondent

Through None.

CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE A. K. CHAWLA

O R D E R %

27.02.2018

The Revenue’s appeal under Section 260A of the Income Tax Act, 1961 (‘the Act’) challenges the order of ITAT setting aside final re-assessment order made by the Assessing Officer (AO). The re- opening of assessment and the “reasons to believe” cited by the AO for issuing the re-assessment notice under Section 147 were based upon audit objections received by the Revenue. Such re-opening has been frowned upon as it is not in accordance with the judgment of the Supreme Court in Commissioner of Income Tax vs. Kelvinator of India, 320 ITR 561. Moreover, on this specific issue, this Court has ruled against the Revenue in relying upon the judgments of several High Courts including Punjab and Haryana High Court and Madras

High Court etc. In these circumstances, no question of law arises.

The appeal is dismissed.

S. RAVINDRA BHAT, J

A. K. CHAWLA, J FEBRUARY 27, 2018 rc

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