THE COMMISSIONER OF INCOME TAX-II vs. JAYPEE VENTURES PVT LTD

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ITA/278/2011HC DelhiDLHC01149493201012 July 2011Bench: HON'BLE MR. JUSTICE A.K.SIKRI,HON'BLE MR. JUSTICE M.L. MEHTA2 pages
AI SummaryDismissed

What did the High Court hold?

The Tribunal allowed the assessee's cross-objections, holding that the notice issued under Section 148 of the Act was improper and illegal. As a consequence of this finding, the Tribunal did not adjudicate on the merits of the additions made by the Assessing Officer, which had been deleted by the CIT(A). The Revenue filed two appeals against the Tribunal's order. In the present appeal (ITA No. 278/2011), the Revenue challenged the deletion of additions made by the AO. However, since the Tribunal had not discussed the question on merits, the Revenue's appeal on this ground was considered incompetent and not maintainable. Therefore, this appeal was dismissed. The judgment does not record any specific reasoning for why the Section 148 notice was held to be improper and illegal, other than stating that the Tribunal so held.

What were the facts?

The Assessing Officer (AO) issued a notice under Section 147 read with Section 148 of the Income Tax Act, 1961 (the Act) to initiate reassessment proceedings. Subsequently, the AO made certain additions to the assessee's income. The assessee appealed to the Commissioner of Income Tax (Appeals) [CIT(A)], challenging both the validity of the Section 148 notice and the additions on merits. The CIT(A) upheld the validity of the notice but deleted the additions. The assessee filed an appeal against the CIT(A)'s order and also filed cross-objections challenging the CIT(A)'s decision to uphold the Section 148 notice. The Tribunal allowed the assessee's cross-objections, holding the Section 148 notice to be improper and illegal. Consequently, the Tribunal did not examine the merits of the additions deleted by the CIT(A). The Revenue filed two appeals against the Tribunal's order.

What were the issues?

1. Whether the notice issued under Section 148 of the Act was proper and legal? (Question of law) Assessee's contentions: The assessee argued that the notice under Section 148 of the Act was not proper and illegal. The assessee's cross-objections before the Tribunal were based on this contention. The judgment indicates the Tribunal agreed with the assessee on this point. Revenue's contentions: The Revenue's appeals challenged the Tribunal's order which had quashed the notice under Section 148 of the Act. The judgment notes that the Revenue's appeal in ITA No. 277/2011 was admitted by the Court. The Revenue's appeal in the present case (ITA No. 278/2011) challenged the deletion of additions made by the AO. However, since the Tribunal had not discussed the merits of the additions due to the issue with the Section 148 notice, the Revenue's appeal on merits was considered incompetent.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

t. #8 o/o L2.O7.2011 Present: Mr. Sanjeev Sabharwal, Revenue/Appellant. Mr. Ajay Vohra with Mr. the assessee/Respondent. + ITA No.278l2O11 * Sr. Standing Counsel for the Somnath Shukla, Advocates for The Assessing Officer issued notice under Section I47 read with Section 148 of the Income Tax Act (hereinafter referred to as 'the Act') and initiated the reassessment proceeding. Thereafter, certain additions were made. The assessee challenged that order by filing appeal before the CIT(A) questioning the validity of notice under Section 148 of the Act and also the additions on merits. The CIT (A) upheld the validity of notice under Section 148 of the Act and deleted the additions. The assessee filed appeal thereagainst. The assessee also filed cross-objections challenging that part of the order of the CIT (A) whereby the CIT (A) had upheld the validity of notice under Section 148 of the Act. The Tribunal vide impugned order has also allowed the cross-objections of the assessee holding that the notice under Section 148 of the Act was not proper and illegal. For this reason, the Tribunal did not go into the merits of the additions made by the AO, which were deleted by the CIT (A) The Revenue has filed two appeals, viz., ITA No.277 of 20II and the instant appeal against the said order. In ITA Digitally Signed By:AMULYA Certify that the digital file and physical file have been compared and the digital data is as per the physical file and no page is missing. Signature Not Verified

I t No.277/2011, the order of the Tribunal quashing Section 148 of the Act is challenged, which appeal by this Court in today's date. In the present appeal, the additions which were deleted by the CIT (A) are challenged. did not discuss the question on merits, this incompetent and is not maintainable. This appeal is accordingly dismissed. JULY Lzt zOLt pmc the notice under has been admitted made by the AO, Since the Tribunal appeal is clearly } A. M.L. MEHTA, J. t ,{

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