AKG POLYMERS INDIA LTD vs. PR. COMMISSIONER OF INCOME TAX DELHI- I

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ITA/770/2016HC DelhiDLHC01222314201613 January 2017Bench: HON'BLE MR. JUSTICE S. RAVINDRA BHAT,HON'BLE MR. JUSTICE NAJMI WAZIRI2 pages
AI SummaryPartly Allowed

What did the High Court hold?

The High Court held that the ITAT had failed to adjudicate on the crucial issue of the validity of the reassessment proceedings under Sections 147/148 of the Income Tax Act, 1961. While the ITAT may have recorded findings on whether the reasons for reopening were put in issue, it did not discuss or decide the fundamental question of whether the reopening itself was justified. Consequently, the High Court found it necessary to remit the matter back to the ITAT for a proper decision on the issue of the validity of the reassessment. The appeal was allowed partly, with the operative direction being the remittance to the ITAT.

What were the facts?

The appeal concerns Assessment Year 2005-06. The assessee, AKG Polymers India Ltd., is challenging an order passed by the Income Tax Appellate Tribunal (ITAT). The reassessment proceedings initiated by the Revenue resulted in an addition of ₹5,00,000/-. The assessee had raised objections before the Commissioner of Income Tax (Appeals) concerning the validity of reopening the assessment under Sections 147/148 of the Income Tax Act, 1961, and whether the reasons for reopening were properly addressed. The ITAT, while seemingly addressing the latter point, did not adjudicate on the former, i.e., the validity of the reassessment itself.

What were the issues?

1. Whether the Income Tax Appellate Tribunal (ITAT) failed to adjudicate upon the justification for reopening a completed assessment for Assessment Year 2005-06, as required under Sections 147/148 of the Income Tax Act, 1961? (Question of law and fact) Assessee's Contention: The ITAT did not properly deal with the validity of the reassessment proceedings. The assessee argued that the reasons for reopening were not adequately put in issue or addressed by the ITAT. Revenue's Contention: The judgment does not record any specific contentions made by the Revenue on this issue.

Which sections of the Income-tax Act were involved?

Section 260A,Section 147,Section 148

AI-generated summary — verify with the full judgment below

$~2 * IN THE HIGH COURT OF DELHI AT NEW DELHI + ITA 770/2016 & CM Nos. 41146-47/2016 AKG POLYMERS INDIA LTD ..... Appellant Through: Mr. R.P.Garg, Advocate. Versus PR. COMMISSIONER OF INCOME TAX DELHI- I ..... Respondent Through: Mr.P. Roychaudhuri, Advocate. CORAM: HON'BLE MR. JUSTICE S. RAVINDRA BHAT HON'BLE MR. JUSTICE NAJMI WAZIRI O R D E R % 13.01.2017 CM Nos. 41147 & 41146 of 2016 These applications seek condonation of delay, which is stated to be of 14 days in re-filing and 149 days, in filing the appeal. For the reasons stated in these applications, the delay is condoned and the appeal is taken on record. Both these application stand disposed off. ITA 770/2016 Issue notice. Mr. P. Roychaudhuri, Advocate accepts notice on behalf of the Revenue. In this appeal under Section 260A of the Income Tax Act, 1961, (hereinafter to be referred as ‘the Act’) the grievance urged is that the Income Tax Appellate Tribunal (ITAT) did not adjudicate upon the justification for reopening a completed assessment for Assessment Year 2005-06. The reassessment resulted in addition to that order to the tune of `5,00,000/-. ITA 770/2016 page 1 of 2

Before the Commissioner of Income Tax (Appeals), woes regarding validity of the reopening of assessment under Sections 147/148 of the Act as well as the factual issue whether reasons for reopening were put in issue. Although the ITAT appears to have recorded its findings on the second issue, it has not discussed or dealt with the first issue i.e. validity of the reassessment. In these circumstances, the matter is remitted to the ITAT for proper decision on the said issue. In view of the above, the appeal is allowed partly. S. RAVINDRA BHAT, J. NAJMI WAZIRI, J. JANUARY 13, 2017 sb ITA 770/2016 page 2 of 2

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