M/S LONGOWALIA POULTRY FARM vs. DEPTY COMMISSIONER OF INCOME T

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CWP/16336/1998HC Punjab & HaryanaPHHC01021721199825 September 2013Bench: MR. JUSTICE DR. BHARAT BHUSHAN PARSOON,MR. JUSTICE RAJIVE BHALLA3 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that it found no reason to entertain the writ petition in the absence of an illegal assumption of jurisdiction by the Assessing Officer, who is conferred with the power under Section 148 of the Act to serve a show cause notice. The court found Explanation (3) to Section 147 of the Act to be a complete answer to the petitioner's argument that the Assessing Officer cannot consider factors other than those mentioned in the show cause notice. Regarding the ITAT order, the court noted that the petitioner's plea could be validly urged before the Assessing Officer, especially as a reference filed by the revenue was pending and the revenue alleged that the petitioner was not entitled to deductions under Sections 80HH and 80I. Consequently, the writ petition was disposed of by relegating the petitioner to appear before the Assessing Officer for further proceedings. The parties were directed to appear before the Assessing Officer on 25.10.2013. No specific issue was left undecided; the court chose not to decide the merits of the case at the writ stage.

What were the facts?

The petitioner, M/s Longowalia Poultry Farm, filed a writ petition before the High Court of Punjab and Haryana seeking to quash a show cause notice dated January 14, 1997, and subsequent notices/letters seeking information. The petitioner argued that the issues raised by the Assessing Officer under Section 148 of the Income Tax Act, 1961, were already decided in their favour by the Income Tax Appellate Tribunal. Additionally, the petitioner contended that the Assessing Officer considered infractions not mentioned in the show cause notice. The respondent, Deputy Commissioner of Income Tax, argued that Explanation (3) to Section 147 of the Act permits the Assessing Officer to examine facts not in the show cause notice. The revenue also stated that a reference filed by them was pending and that the Supreme Court decision in CIT v. Venkateswara Hatcheries (P) Ltd. covered the issue against the assessee regarding deductions under Sections 80HH and 80I.

What were the issues?

1. Whether the High Court should quash the show cause notice dated 14.1.1997 and subsequent notices/letters issued under Section 148 of the Income Tax Act, 1961, on the ground that the issues are covered in favour of the assessee by an order of the Income Tax Appellate Tribunal? (Question of law and fact, concerning Section 148). 2. Whether the Assessing Officer can consider alleged infractions that did not form part of the show cause notice? (Question of law, concerning Section 147). Assessee's contentions: The issues raised by the Assessing Officer under Section 148 are covered in favour of the assessee by an ITAT order. The Assessing Officer has taken into consideration certain alleged infractions that did not form part of the show cause notice. Revenue's contentions: In view of Explanation (3) to Section 147 of the Act, the Assessing Officer may go into facts not referred to in the show cause notice. A reference filed by the revenue was pending, and the issue is covered against the assessee by the Supreme Court judgment in Commissioner of Income Tax v. Venkateswara Hatcheries (P) Ltd. and others, holding that deductions under Sections 80HH and 80I are not available to the petitioner.

Which sections of the Income-tax Act were involved?

Section 148,Section 147,Section 80HH,Section 80I

AI-generated summary — verify with the full judgment below

CWP No.16336 of 1998 -: 1 :- IN THE HIGH COURT FOR THE STATES OF PUNJAB AND HARYANA AT CHANDIGARH CWP No.16336 of 1998 Date of decision: September 25, 2013. M/s Longowalia Poultry Farm ... Appellant v. Deputy Commissioner of Income Tax, Special Range, Karnal ... Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Shri Alok Mittal, Advocate, for the appellant. Shri Yogesh Putney, Advocate for the respondent. Rajive Bhalla

, J. (Oral): The petitioner prays for quashing show cause notice dated 14.1.1997 (Annexure P-2) and notices/letters seeking information (Anexures P-9, P-10 and P-14). Counsel for the petitioner asserts that as issues raised by the Assessing Officer, by referring to Section 148 of the Income Tax Act, 1961 (for short, the Act), are covered in favour of the assessee by an order passed by the Income Tax Appellate Tribunal, the impugned notice and letters may be quashed. Counsel for the petitioner submits that this apart, the Assessing Officer has taken into consideration certain alleged infractions that did not form part of the show cause notice. It is prayed that in view of the aforesaid facts, the writ petition Kadyan Vinod Kumar 2013.10.04 13:49 I attest to the accuracy and integrity of this document Chandigarh

CWP No.16336 of 1998 -: 2 :- may be allowed and Annexures P-2, P-9, P-10 and P-14 may be quashed. Counsel for the respondent submits that in view of Explanation (3) to Section 147 of the Act, the Assessing Officer may go into the facts that have not been referred to in the show cause notice and, therefore, the petitioner's plea in respect thereof does not survive. As regards order passed by the Income Tax Appellate Tribunal, counsel for the revenue submits that as a reference filed by the revenue was pending at the time of filing of the reply and even otherwise the issue in hand is covered against the assessee by judgment of the Supreme Court in Commissioner of Income Tax v. Venkateswara Hatcheries (P) Ltd. And others, [1999]237 ITR 174 holding that deductions under Sections 80HH and 80I of the Act are not available to the petitioner, the writ petition should be dismissed. We have heard counsel for the parties and perused the impugned notices. The Assessing Officer is conferred with power, under Section 148 of the Act, to serve a show cause notice upon an assessee and, therefore, in the absence of an illegal assumption of jurisdiction, find no reason to entertain the petition. This apart, Explanation (3) to Section 147 of the Act, is an answer to the petitioner's argument that the Assessing Officer cannot take into consideration factors other than those referred in the show cause notice. The petitioner's plea relating to the order passed by the Income Tax Kadyan Vinod Kumar 2013.10.04 13:49 I attest to the accuracy and integrity of this document Chandigarh

CWP No.16336 of 1998 -: 3 :- Appellate Tribunal can be validly urged and raised before the Assessing Officer, particularly as the matter was pending in a reference by the revenue and the revenue alleges that the petitioner is not entitled to any deduction under Sections 80HH and 80I of the Act. As a consequence, we dispose of the writ petition by relegating the petitioner to appear before the Assessing Officer for further proceedings. Parties are directed to appear before the Assessing Officer on 25.10.2013.

[ Rajive Bhalla ]

Judge

[Dr. Bharat Bhushan Parsoon] September 25, 2013. Judge kadyan Kadyan Vinod Kumar 2013.10.04 13:49 I attest to the accuracy and integrity of this document Chandigarh

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