Rohit Agrawal vs. The Principal Commissioner Of Income Tax Ii

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WP/9126/2017HC Madhya Pradesh04 July 2017Bench: HON'BLE SHRI JUSTICE S.K. SETH5 pages
For Petitioner: Abhishek Oswal
AI SummaryDismissed

What did the High Court hold?

The High Court held that the order passed by the Principal Commissioner of Income Tax-II, Jabalpur, under Section 264 of the Income Tax Act, 1961, was not infirm or illegal. The Court found that the Principal Commissioner had analyzed the facts in detail and provided well-reasoned grounds for dismissing the revision. The reliance placed by the assessee on the Supreme Court decision in Sajan Kumar Bhawsinka was distinguished as being factually different, particularly concerning the 'cryptic' nature of the orders in that case, which was not the situation here. The Court noted that the order under Section 264 was detailed and reasoned. It was observed that the petitioner failed to avail multiple opportunities to explain the deposit of Rs.16,31,700/- in his savings account, leading to an ex-parte assessment order. The assessee also failed to respond to penalty notices. The revision was filed only after the penalty order and recovery proceedings commenced. The Court stated that allowing such a revision would encourage assessees to let proceedings go ex-parte and then seek quashing after the appeal period expires, which is not the legislative intent of Section 264. The petition was dismissed as having no merit.

What were the facts?

The assessee, Rohit Agrawal, is an individual. The Revenue is represented by the Principal Commissioner of Income Tax-II, Jabalpur. The assessment year is not explicitly stated, but the financial year of the deposit is 2009-10. The challenge is to the order dated 04.03.2016 passed by the Principal Commissioner of Income Tax-II under Section 264 of the Income Tax Act, 1961, which dismissed the assessee's revision petition. The Income-Tax Department became aware of a deposit of Rs.16,31,700/- in the assessee's savings account via AIR information. Subsequently, an ex-parte assessment order was framed after issuing notices under Sections 148 and 142(1). This order included tax liability and penalties under Sections 271F and 271(1)(c). The assessee did not challenge this order in appeal. He only became aware of the assessment order upon receiving a demand notice, leading him to file a revision under Section 264.

What were the issues?

1. Whether the Principal Commissioner of Income Tax-II, Jabalpur, erred in dismissing the revision petition filed under Section 264 of the Income Tax Act, 1961, when the assessee contended that the revisional authority has vast jurisdiction to do justice and ought to have remanded the matter for fresh assessment, especially when necessary material was placed before it? (Question of law and fact, concerning Section 264 of the Act). Assessee's Contention: The Principal Commissioner, while exercising revisional powers under Section 264, possesses broad jurisdiction to ensure justice. When relevant material is presented, the authority should pass an appropriate order or, alternatively, remand the case for a fresh assessment. Reliance was placed on Sajan Kumar Bhawsinka Vs. Commissioner of Income Tax & another, C. Parikh & Co. V. Commissioner of Income Tax, Baroda, and S.R. Koshti V. Commissioner of Income-tax. Revenue's Contention: No specific arguments were recorded for the Revenue in the judgment.

Which sections of the Income-tax Act were involved?

Section 264,Section 148,Section 142(1),Section 271F,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

HIGH COURT OF MADHYA PRADESH: MAIN SEAT AT JABALPUR 1 Case number Writ Petition No.9126/2017 2 Parties Name Rohit Agrawal Versus The Principal Commissioner of Income Tax-II & another 3 Date of Order 04/07/17 4 Bench Consituted of HON. SHRI S.K. SETH AND HON. SMT. ANJULI PALO, JJ 5 Order delivered by Hon'ble Shri S.K. Seth, J. 6 Whether approved for reporting Yes 7 Name of the counsel for parties Shri G.N. Purohit, Senior Advocate with Shri Abhishek Oswal, Advocate for the petitioner. 8 Law laid down Law relating to revision under Section 264 of the Income Tax Act, 1961. 9 Significant paragraph numbers ----- (S.K. SETH) (SMT. ANJULI PALO) JUDGE JUDGE 4 HIGH COURT OF MADHYA PRADESH: MAIN SEAT AT JABALPUR (DIVISION BENCH: HON. SHRI S.K. SETH AND HON. SMT. ANJULI PALO, JJ) WRIT Petition No.9126/2017 Petitioner : Rohit Agrawal Versus Respondents : The Principal Commissioner of Income Tax-II & another __________________________________________ Shri G.N. Purohit, Senior Advocate with Shri Abhishek Oswal, Advocate for the petitioner. __________________________________________ O R D E R (04.07.2017) This petition is basically under Article 227 of the Constitution of India to assail the validity of the order dated 04.03.2016 passed by the Principal Commissioner of Income Tax-II, Jabalpur under Section 264 of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). 2. Petitioner is an individual. From an AIR information submitted by the Bank, it came to the knowledge of Income-Tax Department that the total deposit of Rs.16,31,700/- was credited in his saving account during the Financial Year 2009-10, therefore, after notice under Sections 148 4 and 142(1) of the Act, an ex-parte assessment order was framed, not only holding that the petitioner is liable to pay tax but also penalty under Sections 271F and 271(1)(c) of the Act. This order was not challenged in appeal. According to petitioner, it is only when the demand notice was served on him, he became aware of this assessment order, therefore, he challenged it in revision under Section 264 of the Act before the Principal Commissioner of Income Tax-II, Jabalpur. By the order impugned, revision petition has been dismissed, hence this petition. 3. We have heard Shri G.N. Purohit, Senior counsel at lenght and perused the material available on the record. 4. Shri Purohit submits that while exercising the revisional powers, the Principal Commissioner of Income Tax-II, Jabalpur has a vast jurisdiction to do justice between the parites and when necessary material was placed before the revisional authority, it was his duty to pass an appropriate order or in the alternative matter ought to had been remanded back for the fresh assessment. 5. Shri Purohit has relied upon the decision of the Supreme Court in the case of Sajan Kumar Bhawsinka Vs. Commissioner of Income Tax & another reported in (1999) 236 ITR 0038. He has further placed 4 reliance on two decisions of Gujrat High Court in the case of C. Parikh & Co. V. Commissioner of Income Tax, Baroda reported in (1980) 122 ITR 0610 and S.R. Koshti V. Commissioner of Income-tax reported in (2005) 276 ITR 165. 6. After having heard arguments, considering the material available on record and the well reasoned order passed by the Principal Commissioner of Income Tax-II, Jabalpur, we do not find any infirmity or illegality in the order impugned. Learned Principal Comissioner of Income Tax-II, Jabalpur has anlysed the facts in detail and thereafter has dismissed the revision. The reliance placed on the decision of the Supreme Court is clearly distinguishable on the facts because of the cryptic order passed by the revisional authority under Section 264 of the Act and equally cryptic order passed by the High Court. 7. The order passed under Section 264 of the Act is a detailed order with reasons and after condsidering the law laid down by the Supreme Court in the various decisions as mentioned in the order itself, it cannot be said by any stretch of imagination that it is a cryptic order. From perusal of the order impugned, it is clear that despite several opportunities, the petitioner did not 4 avail any opportunity to account for the deposit of Rs.16,31,700/- in his saving account. As result, ex-parte assessment order was framed. Petitioner was also given notice to pay the penalty, this too was not also availed of by the petitioner and it is only when the penalty order was passed and recovery proceedings started, the petitioner filed a revision under Section 264 of the Act. If we acceed to submissions of Shri Purohit, then in each case assessee will allow to proceed ex- parte and after limitation for filing appeal is over ask for quashing of ex- parte assessment order by invoking Section 264 of the Act. This cannot be the lagislature in proving remedy Under Section 264 of the Act. 8. From the material available on record, it is clear that petitioner is to thank himself for inviting all these troubles by not responding to the various notices issued to him by the Assessing Officer. We, therefore, find no merit and substance in the petition. Same is, therefore, dismissed. 9. Ordered accordingly. (S.K. SETH) (SMT. ANJULI PALO) JUDGE JUDGE @shish 4

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