Commissioner Of Income Tax vs. M/S Anil Traders

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ITA/159/2011HC Madhya Pradesh10 July 2015Bench: HON'BLE THE CHIEF JUSTICE4 pages
For Petitioner: Sanjay Lal
AI SummaryDismissed

What did the High Court hold?

The High Court held that both appeals must fail for the same reasons as companion cases decided by a detailed judgment in I.T.A. No. 44/2011. The Court noted that the department's counsel did not argue any questions other than the two substantial questions of law reproduced. The judgment in the companion cases had already answered these two substantial questions of law against the department. Therefore, the High Court dismissed both appeals filed by the department. The operative direction was the dismissal of the appeals. No issues were expressly left undecided.

What were the facts?

The appeals were filed by the Commissioner of Income Tax (appellant) against M/s Anil Traders (respondent) for the assessment year 2003-04. The appeals challenged a common judgment dated May 31, 2011, passed by the Income Tax Appellate Tribunal (ITAT), Indore Bench. The ITAT's judgment pertained to appeals filed by both the department and the assessee against orders dated March 29, 2006, by the Assessing Officer (AO) and March 24, 2008, by the Commissioner of Income Tax (Appeals). The High Court noted that the department's appeals were listed and admitted based on identical substantial questions of law raised in companion cases. The counsel for the department did not argue any other questions in support of these appeals.

What were the issues?

The Tribunal had to decide two substantial questions of law, which were framed as follows: 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 AO had not recorded his satisfaction, even when the AO making the assessment of the searched person was himself having jurisdiction over such other person (i.e., the assessee) and thus was not required to record any satisfaction for initiating proceedings under Section 153C in the case of the assessee? 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 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 Income Tax Act? The assessee did not present any arguments. The revenue (appellant) contended that the Tribunal was not justified in upholding the quashing of assessment proceedings under Section 153C on the grounds mentioned in the questions. The revenue's arguments were based on the interpretation of Section 153C and the requirement of recording satisfaction by the AO.

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.159 of 2011 I.T.A.No.160 of 2011 Commissioner of Income Tax ……Appellant Versus M/s Anil Traders …..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 same assessment year i.e. 2003-04 against the common judgment dated 31.05.2011 passed by the Income Tax Appellate Tribunal Indore Bench, Indore in I.T.A.No.203/Jab/2008 (A.Y. 2003- 04) and I.T.A. No.171/Jab/2008 (A.Y. 2003-04) in respect of same assessee. I.T.A.No.203/Jab/2008 was filed by the department and 2 I.T.A. No.171/Jab/2008 was filed by the assessee against the orders dated 29.03.2006 passed by the Assessing Officer and dated 24.03.2008 passed by the Commissioner of Income Tax (Appeals). Both the appeals were disposed of by common judgment passed by the Tribunal. The department has filed appeals against the said common judgment of the Tribunal. 2. I.T.A.No.159/2011 was listed on 23.11.2011, when it was ordered to be listed along with I.T.A.No.157/2011 and 163/2011. None of these appeals form part of the group cases, heard analogously and decided by separate judgment today. The appeal was again listed on 17.04.2014 when statement of the counsel for the department was recorded with I.T.A.No.93/2011 involves identical substantial questions of law and has been admitted. On the basis of this statement, the appeal was ordered to be listed along with I.T.A.No.93/2011. The said appeal bearing I.T.A.No.93/2011 has already been decided by separate judgment in which only two substantial questions are raised, 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 assessee) and thus was not required to record any satisfaction for initiating proceedings u/s 153C in case of the assessee? 3 (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.

The counsel appearing for the department has not argued any other question in support of this appeal. In the present appeal also the department has raised substantial questions of law with reference to the issue of mandate of Section 153C of the I.T. Act. That aspect has been elaborately dealt with in the companion cases decided today namely I.T.A.No.44/2011. For the same reasons, therefore, this appeal must fail. 4. As regards I.T.A.No.160/2011 filed by the department, the situation is no different. The counsel for the department did not address us on any other point except the two substantial questions of law reproduced in paragraph 2 above. Even this appeal was listed on 22.08.2014 when it was ordered to be notified for admission along with I.T.A.No.159/2011. Even in this appeal, other questions raised in the appeal memo have not been pressed during the arguments. We will, therefore, proceed on the basis that the department has invited decision only on the two substantial 4 questions of law which have been raised in the companion appeals and none else. The said two substantial questions of law have already been answered against the department by a detailed judgment rendered in I.T.A.No.44/2011. For the same reasons, even this appeal must fail. 5. In view of the above, both the appeals are dismissed. (A.M. Khanwilkar) (K.K.Trivedi) Chief Justice Judge Anchal

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