THE COMMISSIONER OF INCOME T vs. M/S.PRAVEEN KUMAR OTMALJI (H

TCA/190/2020HC Madras01 April 2021Bench: Hon`ble Mr Justice T. S. SIVAGNANAM4 pages

AI SummaryAllowed

What did the High Court hold?

The High Court allowed the appeal filed by the Revenue and set aside the impugned order passed by the ITAT. The Court found that an identical issue had been considered by a Division Bench of the High Court, to which one of the judges was a party, in the case of CIT Vs. Manish D.Jain [HUF] [(2020) 122 Taxmann.com 180], and that issue was answered in favour of the Revenue. In light of this precedent, the High Court held that the substantial questions of law framed were answered in favour of the Revenue. The reasoning was that the ITAT's order was contrary to the established principles of burden of proof and the assessment exercise already undertaken by the Assessing Officer. The operative direction was to set aside the ITAT's order.

What were the facts?

The Revenue, Commissioner of Income Tax, Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated 11.12.2019 passed by the Income Tax Appellate Tribunal (ITAT), Chennai 'D' Bench. The ITAT's order was in relation to ITA No.3143/Chny/2018 for the assessment year 2010-11. The appeal was admitted on 24.07.2020. The respondent assessee, M/s. Praveen Kumar Otmalji (HUF), was served but did not appear before the High Court. The Revenue was represented by its Senior Standing Counsel.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was right in remitting the issue back to the Assessing Officer, shifting the onus to the Revenue to prove the assessee's role in promoting the company, their relation with promoters, and price inflation, when the Assessing Officer had already conducted such an exercise? (Question of law and fact, concerning the burden of proof and assessment proceedings). 2. Is not the finding of the Tribunal perverse, especially when it contradicts the principle that the party asserting a fact must discharge the initial burden, after which the burden shifts to the Department? (Question of law, concerning perversity and burden of proof). Assessee's arguments: Not recorded in the judgment. Revenue's arguments: The Tribunal erred in remitting the issue back to the Assessing Officer and shifting the onus to the Revenue. The Tribunal's finding is perverse as it goes against the established principle of burden of proof, where the initial onus lies on the assessee. The Revenue relied on the decision in CIT Vs. Manish D.Jain [HUF] reported in (2020) 122 Taxmann.com 180.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

Heard together (2 matters)

I.T.A.No.3143/Chny/2018

ITA.No.1849/Chny/2014

Read from the judgment's own cause title. This page is filed under one of them.

TCA.No.190 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 01.4.2021 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MS.JUSTICE R.N.MANJULA Tax Case Appeal No.190 of 2020

The Commissioner of Income Tax, Chennai ...Appellant Vs M/s.Praveen Kumar Otmalji (HUF) ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 11.12.2019 passed by the Income Tax Appellate Tribunal, Madras 'D' Bench, Chennai made in I.T.A.No.3143/Chny/ 2018 for the assessment year 2010-11. For Appellant: Mrs.R.Hemalatha, SSC

Respondent: served and no appearance Judgment was delivered by

T.S.SIVAGNANAM

This appeal has been filed by the Revenue under Section 260A of the Income Tax Act, 1961 ('the Act' for brevity) challenging the order 1/4 https://www.mhc.tn.gov.in/judis/ TCA.No.190 of 2020 dated 11.12.2019 made in I.T.A.No.3143/Chny/2018 on the file of the Income Tax Appellate Tribunal, Chennai 'D' Bench ('the Tribunal' for brevity) for the assessment year 2010-11. 2. The appeal was admitted on 24.7.2020 on the following substantial questions of law : “i. Whether, on the facts and in the circumstances of the case, the Tribunal was right in remitting the issue back to the file of the Assessing Officer by quoting the decision in the case of Kanhaiyal and Sons (HUF) in ITA.No.1849/Chny/2014, Sunil Kumar Lalwani and Aashesh Kumar Lalwani wherein the onus has been shifted to the Revenue with a direction that the Assessing Officer is to bring on record the role of the assessee in promoting the company and the relation of the assessee, if any with that of the promoters and role of inflating of prices, etc., which exercise had already been done by the Assessing Officer ? And ii. Is not the finding of the Tribunal perverse especially when the decision of the Tribunal is contrary to the time tested principle that the person, who asserts a fact has to discharge the initial burden cast upon him to show that the said facts are true and only 2/4 https://www.mhc.tn.gov.in/judis/ TCA.No.190 of 2020 thereafter the burden would shift to the Department ?” 3. We have heard Mrs.R.Hemalatha, learned Senior Standing Counsel appearing for the appellant/Revenue. Though the respondent was served and their name printed in the cause list, none appears for them. 4. The learned Senior Standing Counsel appearing for the appellant/Revenue submits that an identical issue has been considered by a Division Bench of this Court, to which, one of us (TSSJ) was a party, in the decision in the case of CIT Vs. Manish D.Jain [HUF] [reported in (2020) 122 Taxmann.com 180] and the issue has been answered in favour of the Revenue. 5. There is no quarrel over such proposition. 6. In the light of the said decision, the above tax case appeal is allowed, the impugned order passed by the Tribunal is set aside and the substantial questions of law framed are answered in favour of the Revenue. 01.4.2021 RS 3/4 https://www.mhc.tn.gov.in/judis/ TCA.No.190 of 2020 T.S.SIVAGNANAM,J AND R.N.MANJULA,J RS To The Income Tax Appellate Tribunal, 'D' Bench, Chennai.

TCA.No.190 of 2020 01.4.2021 4/4 https://www.mhc.tn.gov.in/judis/

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