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

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ITA/60/2011HC Madhya Pradesh10 July 2015Bench: HON'BLE THE CHIEF JUSTICE3 pages
For Petitioner: Sanjeev TuliFor Respondent: A.Oswal,L.L.Sharma,M.Sharma,Ashish Upadhyay(Res.)
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeals must fail for the reasons stated in a separate judgment disposing of companion appeals (I.T.A. No.44/2011 and others). Although the judgment does not elaborate on the specific reasoning for dismissing these appeals, it indicates that the substantial questions of law framed were identical to those in the companion cases. Therefore, the reasoning and ratio decidendi from those companion appeals would apply. The operative direction was to dismiss the appeals. No issue was expressly left undecided, as the appeals were dismissed based on prior reasoning.

What were the facts?

The appeals were filed by the Commissioner of Income Tax (appellant/Department) against the assessee, M/s Gwalior Tanks and Vessels Ltd. (respondent). The appeals pertained to seven assessment years: 2000-01, 2001-02, 2002-03, 2003-04, 2004-05, 2005-06, and 2006-07. These appeals arose from a common order dated December 29, 2010, passed by the Income Tax Appellate Tribunal (ITAT), Indore Bench. The High Court admitted these appeals on two substantial questions of law and heard them analogously with other companion appeals. The core of the dispute involved the validity of assessment proceedings initiated under Section 153C of the Income Tax Act, 1961.

What were the issues?

The Tribunal had to decide two substantial questions of law: 1. Whether, on the facts and in the circumstances, the Tribunal was justified in law in upholding the CIT(A)'s order quashing assessment proceedings under Section 153C, 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 was not required to record satisfaction for initiating proceedings under Section 153C? 2. Whether, on the facts and in the circumstances, the Tribunal was justified in law in upholding the quashing of assessment proceedings under Section 153C, on the ground that the AO had not recorded his satisfaction in writing, by relying on the Supreme Court decision in *Manish Maheshwari vs. ACIT* (289 ITR 341), which was in the context of Section 158BD and not Section 153C? Assessee's contentions: The assessee argued that the assessment proceedings under Section 153C were liable to be quashed because the AO had not recorded his satisfaction. The Tribunal, in its impugned order, upheld this view, relying on the decision in *Manish Maheshwari vs. ACIT*. Revenue's contentions: The Department contended that the Tribunal was not justified in upholding the quashing of assessment proceedings. The Department argued that the AO was not required to record satisfaction in certain circumstances, particularly when the AO making the assessment of the searched person had jurisdiction over the assessee. The Department also questioned the applicability of the *Manish Maheshwari* decision to Section 153C.

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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