Commissioner Of Income Tax vs. M/S Hotel Sonam & Smart Bar,

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ITA/105/2011HC Madhya Pradesh10 July 2015Bench: HON'BLE THE CHIEF JUSTICE2 pages
For Petitioner: Sanjeev Tuli
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeals must fail for the same reasons as companion appeals (I.T.A. No.44/2011 and others) which dealt with the same substantial questions of law. The judgment does not elaborate on the specific reasoning of the ITAT or the High Court regarding the satisfaction requirement under Section 153C or the applicability of the Manish Maheshwari case. However, by stating that the appeals must fail for the same reasons as the companion appeals, it implies that the High Court agreed with the ITAT's decision to uphold the quashing of the assessment proceedings. The operative direction is the dismissal of the appeals.

What were the facts?

The appeals were filed by the Commissioner of Income Tax (the Revenue) against a common order of the Income Tax Appellate Tribunal (ITAT), Indore Bench, dated February 28, 2011. The appeals pertain to the assessee, M/s Hotel Sonam and Smart Bar, for seven assessment years: 1998-99, 1999-2000, 2000-01, 2001-02, 2002-03, 2003-04, and 2004-05. The ITAT's order upheld the Commissioner of Income Tax (Appeals) [CIT(A)] decision to quash assessment proceedings initiated under Section 153C of the Income Tax Act, 1961. The Revenue was represented by Shri Sanjay Lal, Advocate, while no one appeared for the respondent assessee.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in upholding the order of the CIT(A) quashing the assessment proceedings on the ground that the Assessing Officer (AO) had not recorded his satisfaction, even though the AO making the assessment of the searched person had jurisdiction over the assessee and thus was not required to record any satisfaction for initiating proceedings under Section 153C? 2. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in upholding the quashing of the assessment proceedings under Section 153C on the ground that the AO had not recorded, in writing, his satisfaction, by placing reliance on the decision of the Hon'ble Supreme Court in Manish Maheshwari vs. ACIT, which was delivered in the context of Section 158BD and not Section 153C? The Revenue contended that the Tribunal was justified in quashing the proceedings. The assessee's contentions are not recorded in the judgment. The Tribunal's decision was based on its own reasoning and reliance on previous judgments.

Which sections of the Income-tax Act were involved?

Section 153C,Section 158BD

AI-generated summary — verify with the full judgment below

1 HIGH COURT OF MADHYA PRADESH : JABALPUR I.T.A. No.101/2011,I.T.A. No.102/2011

I.T.A. No.103/2011

, I.T.A. No.104 /2011, I.T.A. No.105 /2011,I.T.A. No.106/2011, I.T.A. No.107/2011 Commissioner of Income Tax …..Appellant Versus M/s Hotel Sonam and Smart Bar

….Respondent ============================================= Coram: Hon’ble Shri Justice A. M. Khanwilkar, Chief Justice Hon’ble Shri Justice K.K.Trivedi, J. Whether approved for reporting : No. ============================================= Shri Sanjay Lal, Advocate for the appellant/Commissioner of Income Tax, Jabalpur. None for the respondent. ============================================= Reserved On : 02.07.2015 Date of Decision : 10.07.2015 J U D G M E N T { 10th July, 2015} Per: A.M. Khanwilkar, Chief Justice: These appeals are filed by the Department qua single assessee regarding six separate assessment years i.e. 1998-99, 1999-2000, 2000-01, 2001-02 2002-03, 2003-04 and 2004-05 bearing I.T.A. Nos.101, 107, 104, 102, 105, 103 and 106 of 2011 respectively. Moreover, these appeals emanate from a common order passed by the Income Tax Appellate Tribunal, Indore Bench, at Indore dated 2 28.2.2011. Since common substantial questions of law have been framed in these appeals, the same were heard analogously and, therefore, are being disposed of by this common judgment. 2. These appeals have been admitted only on two substantial questions of law, which read thus:- “(i) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in upholding the order of the CIT(A) quashing the assessment proceedings on the ground that the AO had not recorded, his satisfaction even which the AO making the assessment of searched person was himself having jurisdiction over such other person (i.e. the assesse) and thus was not required to record any satisfaction for initiating proceedings u/s 153C in case of the assesse? (ii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in upholding the quashing of the assessment proceedings u/s 153C on the ground that the AO had not recorded, in writing, his satisfaction, by placing reliance on the decision of the Hon’ble Supreme Court in the case of Manish Maheshwari vs. ACIT, 289 ITR 341 which was delivered in the context of section 158BD and not section 153C of the I.T. Act?”

3.

As the substantial questions of law, on which these appeals were admitted, have been elaborately dealt with in the companion appeals heard analogously being I.T.A. No.44/2011 and other companion cases, even these appeals must fail for the same reasons. 4. Accordingly, these appeals are dismissed with no order as to costs. (A.M. Khanwilkar) (K.K.Trivedi) Chief Justice Judge Anchal

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