Pr. Commissioner Of Income Tax 1 vs. Shakuntala Daga

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ITA/25/2023HC Madhya Pradesh23 June 2023Bench: HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI4 pages
For Petitioner: Veena Mandlik
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal did not involve any substantial question of law, which is a prerequisite for admission under Section 260A of the Income Tax Act, 1961. The Court reasoned that making additions or deletions to income cannot inherently be considered erroneous and prejudicial to the interest of the revenue. Therefore, the appeal lacked merit and was dismissed in limine. The specific findings of the ITAT regarding the assessment order being erroneous and prejudicial to the revenue, and the assessee's explanation for the difference in receipts, were not re-examined on merits by the High Court, as the appeal was dismissed on the preliminary ground of not involving a substantial question of law.

What were the facts?

The assessee, Shakuntala Daga, filed an income tax return for Assessment Year 2015-16 declaring a total income of Rs. 12,31,490. The assessment was initially completed under Section 143(3) at Rs. 12,57,250. Subsequently, the Principal Commissioner of Income Tax (PCIT), Ujjain, set aside this order under Section 263, deeming it erroneous and prejudicial to revenue, directing a fresh assessment. A revised assessment under Section 147 read with Section 263 resulted in an addition of Rs. 18,09,565, bringing the assessed income to Rs. 30,81,055. The assessee appealed to the ITAT, which allowed the appeal and quashed the PCIT's order. The Revenue (Pr. Commissioner of Income Tax-1, Indore) filed an appeal before the High Court against the ITAT's order.

What were the issues?

1. Whether the appeal involves a substantial question of law, as required under Section 260A of the Income Tax Act, 1961, for admission? Assessee's arguments: Not recorded. Revenue's arguments: The appeal involves a substantial question of law. The ITAT erred in quashing the revisionary proceedings under Section 263 and holding that the Assessing Officer's order under Section 143(3) was not erroneous and prejudicial to the revenue. The assessee failed to provide a proper explanation for a difference in receipts of Rs. 22,70,669. Despite the tax effect being below the monetary limit specified in Circular No. 17/2019, the case falls under the exception clause of paragraph 10(c) of CBDT Circular No. 3/18, making it fit for entertainment.

Which sections of the Income-tax Act were involved?

Section 260A,Section 143(3),Section 263,Section 147

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF MADHYA PRADESH AT INDORE BEFORE HON'BLE SHRI JUSTICE SUSHRUT ARVIND DHARMADHIKARI & HON'BLE SHRI JUSTICE HIRDESH ON THE 23rd OF JUNE, 2023 INCOME TAX APPEAL No. 25 of 2023 BETWEEN:- PR. COMMISSIONER OF INCOME TAX-1, AAYAKAR BHAWAN, OPP. WHITE CHURCH, INDORE (MADHYA PRADESH) .....APPELLANT (MS. VEENA MANDLIK, COUNSEL FOR THE APPELLANT). AND SHAKUNTALA DAGA 38, CHANDRASHEKHAR MARG, NAGDA, DISTRICT UJJAIN (MADHYA PRADESH) .....RESPONDENT -------------------------------------------------------------------------------------------- ---------- This appeal coming on for admission this day, JUSTICE SUSHRUT ARVIND DHARMADHIKARI passed the following:

ORDER

Heard on I.A.No. 3916/2023, an application for condonation of delay. 2. For the reasons stated in the application, the same is allowed. Delay in filing the appeal is hereby condoned. 3. Also heard on the question of admission. 4. This is an appeal filed by the appellant under Section 260A of the 1 Signed by: SREEVIDYA Signing time: 6/26/2023 11:46:55 AM Signature Not Verified Income Tax Act, 1961 (hereinafter referred to as 'the Act of 1961') being aggrieved by the order dated 28.07.2022 passed by the Income Tax Appellate Tribunal (ITAT), Bench Indore in ITA No. 251/Ind/2021 for the assessment year 2015-16. 5. In short, the question that arises for consideration in this appeal is, whether this appeal involves any substantial question of law, as is required to be made out under Section 260A of the Act of 1961, that being the prerequisite of admission of the appeal. 6 . The brief facts of the case are that the assesses/respondent filed e- return of income on 30.03.2016 for the assessment year 2015-16 declaring a total income of Rs. 12,31,490/-. The assessee is an individual carrying on the business of civil contractor. The assessment was completed under Section 143(3) of the Act on 23.05.2017 at Rs. 12,57,250/- after making additional of Rs. 25,760/-. Thereafter, the audit objection was raised by Revenue Audit Party (RAP). The assessment order of the Assessing Officer under Section 143(3) of the Act was set aside as it was erroneous and prejudicial to the interest of the revenue by the learned Principal Commissioner of Income Tax, Ujjain vide order dated 23.03.2020 passed under Section 263 of the Act. The Assessing Officer was directed to examine the issue and pass a fresh assessment order after providing proper opportunity to the assessee. Thereafter, the assessment order was passed by the Assessing Officer, NFAC (National Faceless Appeal Centre) under Section 147 read with Section 263 of the Act vide order dated 22.09.2021 by making addition of Rs. 18,09,565/- at assessed income of Rs. 30,81,055/-. Being dissatisfied by the order passed by the CIT under Section 263 of the Act dated 23.03.2020, the respondent filed an 2 Signed by: SREEVIDYA Signing time: 6/26/2023 11:46:55 AM Signature Not Verified appeal before the ITAT Bench at Indore. The ITAT vide its order 28.07.2022 allowed the appeal filed by the assessee/respondent and quashed the order passed by the learned Principal Commissioner of Income Tax, Ujjain. 7 . Learned counsel for the appellant submitted that though, the tax effect as per Circular No.17/2019 dated 08.08.2019, is less than the prescribed monetary limit, however, the present case is covered under exception clause of paragraph 10(c) of the CBDT Circular No. 3/18 dated 11.07.2018. Therefore, it is a fit case to be entertained. 8 . Learned counsel for the appellant further submits that the learned ITAT failed to consider the fact that the learned Principal Commissioner Income Tax erred in assuming the jurisdiction under Section 263 of the Act and in quashing the revisionary proceedings under Section 263 by restoring the assessment order under Section 143(3) of the Act dated 23.05.2017. The ITAT also erred in holding that the assessment order of the Assessing Officer passed under Section 143(3) of the Act is not erroneous and prejudicial to the interest of the revenue. The assess had failed to submit proper explanation for difference in receipts of Rs. 22,70,669/- which could not have been done. 9. Heard learned counsel for the appellant and perused the substantial questions of law. 10. Making addition/deletion cannot be said to be erroneous and prejudicial to the interest of revenue. Thus, in our opinion, the present case does not involve any substantial question of law so as to meet the provisions of Section 260(A) of the Act for admitting the appeal. 11. In view of the aforesaid discussion, we do not find any merit in this appeal, which in our opinion deserves to be and is hereby dismissed in limine. 3 Signed by: SREEVIDYA Signing time: 6/26/2023 11:46:55 AM Signature Not Verified (S. A. DHARMADHIKARI) JUDGE (HIRDESH) JUDGE vidya 4 Signed by: SREEVIDYA Signing time: 6/26/2023 11:46:55 AM Signature Not Verified

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