M/S KUNDAN RICE MILLS vs. PRINCIPAL COMMISSIONER OF INCOME TAX

PDF · subscribers
CWP/28808/2019HC Punjab & HaryanaPHHC01121610201911 August 2020Author: DR. JUSTICE S. MURALIDHAR,MR. JUSTICE AVNEESH JHINGAN2 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the impugned order dated September 23, 2019, passed by the Principal Commissioner of Income Tax, Karnal, under Section 127 of the Income Tax Act, 1961, was unreasoned. The Court noted that the revenue's counsel could not dispute this fact. Citing the Supreme Court decision in Ajanta Industries v. Central Board of Direct Taxes, the Court found the order to be contrary to the requirement of providing reasons. Consequently, the order was set aside. The matter was remitted to the Principal Commissioner, Income Tax, Karnal, to pass a fresh reasoned order after considering all submissions made by the assessee in their replies dated September 16 and 23, 2019. The Principal Commissioner was directed to pass this fresh order not later than October 30, 2020, and communicate it to the petitioner not later than November 6, 2020. The petitioner was granted liberty to seek appropriate remedies if the fresh order was adverse.

What were the facts?

The petitioner, M/s Kundan Rice Mills, filed a writ petition challenging an order dated September 23, 2019, passed by the Principal Commissioner of Income Tax, Karnal, under Section 127 of the Income Tax Act, 1961. This order transferred the petitioner's case to the Assessing Officer, Central Circle-14, New Delhi. The petitioner contended that the order was not a reasoned one. The operative part of the impugned order indicated that the assessee's replies dated August 27, 2019, September 16, 2019, and September 23, 2019, were considered but found not tenable, without providing any specific reasons. The revenue's counsel did not dispute that the order lacked reasoning.

What were the issues?

1. Whether the order dated September 23, 2019, passed by the Principal Commissioner of Income Tax, Karnal, under Section 127 of the Income Tax Act, 1961, transferring the case of the petitioner, is a reasoned order? (Question of law and fact) Assessee's contention: The order is not reasoned and is therefore contrary to established legal principles, including Supreme Court decisions like Ajanta Industries v. Central Board of Direct Taxes (1976) 102 ITR 281 (SC). Revenue's contention: The revenue's counsel did not dispute that the order was unreasoned.

Which sections of the Income-tax Act were involved?

Section 127

AI-generated summary — verify with the full judgment below

Cited by 7 judgments on BharatTax

See all citing judgments →

Counted from the text of the judgments hosted here. Most recent first.

Cause title — parties, addresses and appearances
CWP-28808-2019 1 207 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP-28808-2019 (O&M) Date of Decision :11th August, 2020 M/s Kundan Rice Mills Petitioner Versus Principal Commissioner of Income Tax Respondent CORAM: JUSTICE S. MURALIDHAR JUSTICE AVNEESH JHINGAN * * * Present : Ms. Radhika Suri, Senior Advocate with Mr. M.S. Kanda, Advocate for the Petitioner. Mr. Sandeep Goyal, Advocate for the Respondent. * * * Dr. S. Muralidhar, J. 1. One of the grounds in the present petition challenging the order dated 23rd September, 2019 passed by the Principal Commissioner of Income Tax, Karnal under Section 127 of the Income Tax Act, 1961(‘IT Act’), transferring the case involving the Petitioner to the Assessing Officer, Central Circle-14, New Delhi

is that it is not a reasoned order.

2.

The operative portion of the impugned order reads as under: “In response to above, the assessee filed a reply dated 27.08.2019 and requested to grant an opportunity of being heard before the final decision on this regard. Accordingly, final opportunity of being heard was granted to the assessee vide this office letter/notice dated 09.09.2019 fixing the case of 16.09.2019. In response to the same, the assessee filed the reply on 16.09.2019 and 23.09.2019. The replies of the assessee were considered carefully and after consideration, the same were not found tenable.”

3.

Mr. Sandeep Goyal, learned Counsel for the Respondent, is not able to dispute that the above order is not a reasoned one and thus is contrary PANKAJ BAWEJA 2020.08.11 07:35 I attest to the accuracy and integrity of this document High Court, Sector-1, Chandigarh

CWP-28808-2019

2

to a whole line of decisions of the Supreme Court including the one in Ajanta Industries v. Central Board of Direct Taxes (1976) 102 ITR 281 (SC).

4.

Consequently, on the short ground that the impugned order dated 23rd September, 2019 is unreasoned, the same is set aside and the matter concerning the order under Section 127 of the I.T. Act is remitted to the Principal Commissioner, Income Tax, Karnal to be continued from the stage of the reply of the Assessee having been filed on 16th and 23rd September, 2019. 5. The Principal Commissioner, Income Tax, Karnal will now pass a fresh reasoned order dealing with all the submissions of the assessee not later than 30th October, 2020 and communicate the same to the Petitioner not later than 6th November, 2020. 6. If such order is adverse to the Petitioner, it will be open to it to seek appropriate remedies in accordance with law.

7.

The writ petition is disposed of in above terms. The pending applications, if any, are disposed of.

[S. MURALIDHAR]

JUDGE

[AVNEESH JHINGAN]

JUDGE 11thAugust, 2020 Pankaj baweja

Whether speaking / reasoned : Yes / No

Whether reportable :

Yes / No PANKAJ BAWEJA 2020.08.11 07:35 I attest to the accuracy and integrity of this document High Court, Sector-1, Chandigarh

More judgments on Section 127

All 1,067 judgments and leading authorities on Section 127 →

Recent GST High Court judgments

Search GST case law →