Commissioner Of Income Tax vs. M/S. Gwalior Tanks & Vessels Limited

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ITA/55/2011HC Madhya Pradesh10 July 2015Bench: HON'BLE THE CHIEF JUSTICE3 pages
For Petitioner: Sanjeev TuliFor Respondent: Abhishek Oswal,L.L.Sharma,M.Sharma,Ashish Upadhyay
AI SummaryDismissed

What did the High Court hold?

The High Court held that since the substantial questions of law on which these appeals were admitted had been elaborately dealt with in companion appeals (I.T.A. No.44/2011 and others) disposed of on the same day, these appeals must also fail for the same reasons. The reasoning in the companion appeals would have addressed the validity of the ITAT's order upholding the quashing of assessment proceedings under Section 153C. The specific grounds for quashing, relating to the AO's satisfaction and reliance on the Manish Maheshwari case (pertaining to Section 158BD), were implicitly found to be correctly decided against the revenue in the companion judgments. Therefore, the appeals filed by the Department were dismissed. No issue was expressly left undecided.

What were the facts?

The Commissioner of Income Tax (appellant) filed seven appeals before the High Court of Madhya Pradesh against a common order dated December 29, 2010, passed by the Income Tax Appellate Tribunal (ITAT), Indore Bench. The appeals concerned the assessee, M/s Gwalior Tanks and Vessels Ltd. (respondent), for the assessment years 2000-01 to 2006-07. The High Court admitted these appeals on two substantial questions of law. The core issue revolved around the validity of assessment proceedings initiated under Section 153C of the Income Tax Act, 1961, with the ITAT having upheld the order of the Commissioner of Income Tax (Appeals) which had quashed these proceedings.

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 AO had not recorded his satisfaction, even when the AO making the assessment of the searched person had jurisdiction over the assessee and 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 the case of Manish Maheshwari vs. ACIT, which was delivered in the context of Section 158BD and not Section 153C? Contentions: Assessee: The judgment does not record specific contentions for the assessee regarding these issues. Revenue: The revenue contended that the Tribunal was not justified in upholding the quashing of assessment proceedings under Section 153C on the grounds raised by the CIT(A) and relied upon by the Tribunal, particularly concerning the requirement of recording satisfaction by the Assessing Officer.

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.52/2011, I.T.A. No.55/2011 I.T.A. No.58/2011, I.T.A. No.60/2011 I.T.A. No.61/2011, I.T.A. No.64/2011 I.T.A. No.65/2011 Commissioner of Income Tax …..Appellant Versus M/s Gwalior Tanks and Vessels Ltd. ….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, Bhopal. Shri L. L. Sharma, Advocate 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 seven separate assessment years i.e. 2000-01, 2001-02, 2002-03, 2003-04, 2004-05, 2005-06, 2006-07 bearing I.T.A. 2 Nos.52, 55, 58, 60, 61, 64 and 65 of 2011 respectively. Moreover, these appeals emanate from a common order passed by the Income Tax Appellate Tribunal, Indore Bench, at Indore dated 29.12.2010. 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, which have been disposed of today by a separate 3 judgment, even these appeals must fail for the reasons stated in that judgment. 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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