THE COMMISSIONER OF INCOME T vs. SHRI PUKHRAJ BADOLA

TCA/406/2020HC Madras21 December 2020Bench: 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. The Court relied on its own previous decision in the case of CIT Vs. Manish D.Jain [HUF] which dealt with an identical issue and was decided in favour of the Revenue. Consequently, the impugned order passed by the ITAT was set aside. The substantial questions of law framed by the High Court were answered in favour of the Revenue. The Court did not expressly leave any issue undecided. The principle cited by the Revenue regarding the burden of proof was implicitly accepted by the Court in allowing the appeal.

What were the facts?

The Revenue, represented by the Commissioner of Income Tax, Chennai, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated July 9, 2019, passed by the Income Tax Appellate Tribunal (ITAT), Chennai. The ITAT's order was in relation to the assessment year 2015-16 and concerned an appeal filed by the assessee, Shri Pukhraj Badola. The High Court admitted the appeal on substantial questions of law. The respondent assessee was served but did not appear before the High Court.

What were the issues?

1. Whether the Tribunal was justified in setting aside the Assessing Officer's order for re-examination, despite the Assessing Officer having examined all the material placed before him? 2. Whether the Tribunal erred in remitting the issue back to the Assessing Officer, shifting the onus to the Revenue to prove the assessee's role in promoting a company, the assessee's relation with promoters, and price inflation, when these aspects were allegedly already examined by the Assessing Officer and SEBI? 3. Whether the Tribunal's finding was perverse, contradicting the principle that the party asserting a fact must discharge the initial burden of proof before the onus shifts to the department? Assessee's arguments: Not recorded. Revenue's arguments: The Revenue contended that an identical issue was decided in its favour in the case of CIT Vs. Manish D.Jain [HUF] reported in (2020) 122 Taxmann.com 180. The Revenue argued that the Tribunal's order was contrary to the established principle of burden of proof, where the initial onus lies on the assessee to prove the facts asserted.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

TCA.No.406 of 2020 IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 21.12.2020 CORAM THE HONOURABLE MR.JUSTICE T.S.SIVAGNANAM and THE HONOURABLE MRS.JUSTICE V.BHAVANI SUBBAROYAN Tax Case Appeal No.406 of 2020

The Commissioner of Income Tax, Chennai ...Appellant Vs Shri Pukhraj Badola ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 09.7.2019 passed by the Income Tax Appellate Tribunal, Madras 'B'-SMC Bench, Chennai made in I.T.A.No.3248/ Chny/2018 for the assessment year 2015-16. 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 dated 09.7.2019 made in I.T.A.No.3248/Chny/2018 on the file of the 1/4 https://www.mhc.tn.gov.in/judis/ TCA.No.406 of 2020 Income Tax Appellate Tribunal, Chennai, 'B'-SMC Bench ('the Tribunal' for brevity) for the assessment year 2015-16. 2. The appeal was admitted on 19.11.2020 on the following substantial questions of law : “1. Whether on the facts and in the circumstances of the case, the Tribunal was right in setting aside the well reasoned order passed by the Assessing officer for re- examination, especially when all the material placed before assessing officer had been duly examined while passing the assessment order? 2. 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 Harish Kumar (HUF) 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 AO and the SEBI? And 3. Is not the finding of the Tribunal perverse especially when the decision of the 2/4 https://www.mhc.tn.gov.in/judis/ TCA.No.406 of 2020 Tribunal is contrary to the time tested Principal 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 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 his name printed in the cause list, none appears for him. 4. The learned Senior Standing Counsel appearing for the appellant/Revenue submits that an identical issue has been considered by us 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. In the light of the said decision rendered by us, 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. 21.12.2020 RS 3/4 https://www.mhc.tn.gov.in/judis/ TCA.No.406 of 2020 T.S.SIVAGNANAM,J AND V.BHAVANI SUBBAROYAN,J RS To The Income Tax Appellate Tribunal, 'B'-SMC Bench, Chennai. TCA.No.406 of 2020 21.12.2020 4/4 https://www.mhc.tn.gov.in/judis/

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