The Commissioner vs. M/S Cicon Environment Technology Pvt. Ltd.

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ITA/53/2012HC Madhya Pradesh02 May 2014Bench: HON'BLE SHRI JUSTICE RAJENDRA MENON3 pages
For Petitioner: Sanjay Lal
AI SummaryDismissed

What did the High Court hold?

The Tribunal held that while it was a best judgment assessment, the appellate authorities (Commissioner (Appeals) and ITAT) had based their findings on the materials available on record, specifically the balance sheet and other documents showing purchases, stock, and income. They found no discrepancy in these records, which led to the deletion of additions. The Tribunal considered these concurrent findings of fact, arrived at after due appreciation of available materials, and concluded that no substantial question of law was involved. The judgments relied upon by the Revenue were distinguished, as they pertained to situations where deductions were permitted based on available documents like balance sheets and audited accounts, which was the case here. Therefore, the appellate authority's findings did not warrant interference.

What were the facts?

The Revenue filed an appeal under Section 260-A of the Income Tax Act, 1961, challenging orders passed by the Commissioner (Appeals) and the Income Tax Appellate Tribunal (ITAT) that granted benefits to the assessee, a company. The original assessment under Section 143(3) was concluded on January 30, 2005. The Commissioner (Appeals) set aside this assessment on December 12, 2006, and remanded it to the Assessing Officer (AO). Following remand, the AO issued a notice under Section 143(2). When the assessee failed to respond or produce documents, a best judgment assessment was made. The appellate authorities, however, deleted certain additions, leading to the present appeal by the Revenue.

What were the issues?

1. Whether the appellate authority's interference with the best judgment assessment was justified, given the assessee's default in producing sufficient materials like account books and vouchers, as per Section 144 of the Income Tax Act, 1961. Assessee's Arguments: The Revenue argued that once a best judgment assessment was made due to the assessee's failure to produce documents, the appellate authority should not have interfered. They relied on the Supreme Court judgment in CIT v. Segu Buchiah Setty and High Court judgments in CIT v. G.S. Tiwari and Co. and Dalchand Nemchand v. Union of India & others, asserting that the AO's order was unnecessarily interfered with. Revenue's Arguments: The judgment does not record specific arguments made by the Revenue.

Which sections of the Income-tax Act were involved?

Section 260-A,Section 143(3),Section 143(2),Section 144

AI-generated summary — verify with the full judgment below

I.T.A.No.53/2012

2.5.2014 Shri Sanjay Lal, learned counsel for appellant. This is revenue's appeal under section 260-A of the Income Tax Act, 1961 (hereinafter referred to as 'Act' for short), challenging the orders passed by the Commissioner (Appeals) and Income Tax Appellate Tribunal, Indore in the matter of granting certain benefit to the assessee. The assessee is a company and the original assessment under section 143(3) of the Act was concluded on 30th January, 2005. This assessment was set aside by the Commissioner (Appeals), Bhopal vide order dated 12.12.2006 and the matter was remanded back to the Assessing Officer. On remand the Assessing Officer issued notice under section 143(2) of the Act and thereafter when the assessee did not respond to the notice issued, nor did he produce any documents, best judgment assessment was ordered and based on the same, the assessment was concluded. However on appeals being filed, certain additions have been deleted by the appellate authority and therefore challenging these orders, this appeal has been filed. The ground canvassed in this appeal is that once based on the documents available, the best judgment assessment was followed and when the assessee I.T.A.No.53/2012

committed default in not producing sufficient materials, like account books, vouchers, etc., then the interference made by the appellate authority was not called for and placing reliance on the following judgment of Supreme Court in the case of Commissioner of Income Tax Vs. Segu Buchiah Setty [(1970) 77 ITR 539 (SC)]; Allahabad High Court in the case of Commissioner of Income Tax Vs. G.S.Tiwari and Co., [(2013) 85 CCH 081 All HC]; and, Rajasthan High Court in the case of Dalchand Nemchand Vs. Union of India & others [(1980) 15 CTR (RAJ) 21], it is said that the order of the Assessing Officer has been unnecessarily interfered with. We have considered the submission and find that both the appellate authorities, namely the Commissioner (Appeals) and the Tribunal have found that it was a best judgment assessment, but on the basis of materials available on the record i.e. the balance sheet and other documents, which showed purchase, stock and income of the assessee and based on the same finding no discrepancy in the record, orders have been passed by the appellate authority, allowing the deletion. The Commissioner (Appeals) and the Tribunal have based their finding on the balance sheet and the audited accounts. The findings recorded concurrently by the appellate authority are I.T.A.No.53/2012

finding of fact, based on due appreciation of the materials available on record and we see no substantial question of law involved in the appeal. The judgment referred by Shri Sanjay Lal only shows that if the documents are not produced, then on the basis of best judgment assessment can be ordered on the basis of documents available on record, but in this case as the finding recorded by the appellate authority in the matter of permitting the deduction is based on documents like balance sheet and other audited accounts available on record, the judgments relied on by Shri Lal, will not be of any help. The findings arrived at by the appellate authority does not call for any interference. Accordingly, the appeal is dismissed. (Rajendra Menon) (Smt.Vimla Jain) Judge Judge

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