THE COMMISSIONER OF INCOME TAX vs. RAJESH MAHAJAN

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ITA/383/2006HC Punjab & HaryanaPHHC01075097200614 October 2024Bench: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ADARSH KUMAR GOEL4 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the previous order of the ITAT dated 01.02.2011 was passed without giving the respondent-assessee an opportunity of hearing. The Supreme Court had directed the High Court to give detailed reasons, particularly on the question of whether there was any error of law in the ITAT's decision. The High Court observed that since the appellant-assessee was not heard, indulgence was shown by remitting the case for de novo consideration. The impugned judgment of the ITAT was set aside solely on the ground that an opportunity needed to be given to the appellant (assessee) to argue its case before the High Court. The High Court explicitly stated it did not wish to express any opinion on the merits of the case. The appeals were accordingly allowed, and the case was remitted for fresh consideration in accordance with law.

What were the facts?

These appeals by the Commissioner of Income Tax (Revenue) challenge the order of the Income Tax Appellate Tribunal (ITAT) which set aside the order of the Assessing Officer (AO) dated 03.03.2005. The ITAT's decision was based on the ground that the AO's order, passed under Section 263 of the Income Tax Act, 1961, was made without providing the assessee, Mahajan House, Panipat, an opportunity to argue its case. The Supreme Court had previously remanded the matter to the High Court for detailed findings, particularly on whether the ITAT's decision contained any error of law. The High Court noted that the earlier ITAT order dated 01.02.2011 was passed without hearing the assessee. The Revenue contended that the AO's order dated 03.05.2005, which set aside the AO's assessment order dated 03.09.2003, did not warrant interference. The assessee argued that a questionnaire was not provided, and the AO's order was passed without proper inquiry.

What were the issues?

1. Whether the Income Tax Appellate Tribunal (ITAT) erred in setting aside the Commissioner of Income Tax's order passed under Section 263 of the Income Tax Act, 1961, on the ground that the assessee was not given an opportunity to be heard. Assessee's Contentions: - The Assessing Officer (AO) passed an order of assessment without providing a questionnaire and without conducting a detailed inquiry regarding cash found at Panipat House, Delhi House, and unsecured loans. - The AO's order dated 03.05.2005, which set aside the assessment order dated 03.09.2003, did not call for any interference. Revenue's Contentions: - The ITAT erred in setting aside the Commissioner's order under Section 263, as the AO's order was erroneous and prejudicial to the interest of the revenue. - The AO had conducted inquiries, and the ITAT's finding that the AO's order was erroneous cannot be re-examined as it involves factual aspects.

Which sections of the Income-tax Act were involved?

Section 263,Section 260A

AI-generated summary — verify with the full judgment below

209 (2 cases) IN TH

THE COMM

SHRI RAJES

THE COMM

SMT. SANGE CORAM: H

Present M

M M

* SANJEEV PR

1.

T order dated 3 No.8955-8956 w C C l C t HE HIGH COURT OF PUNJA CHANDIGAR I D MISSIONER OF INCOME TAX,

V SH MAHAJAN, MAHAJAN HO

I D MISSIONER OF INCOME TAX,

V EETA MAHAJAN, MAHAJAN

HON'BLE MR. JUSTICE SANJ HON'BLE MR. JUSTICE SANJ (Through Video Conferencin

Ms. Gauri Neo Rampal, Senior S for the appellant/Income Tax Dep Mr. Shantanu Bansal, Advocate a Mr. Yugank Goyal, Advocate for *** RAKASH SHARMA, J. (Oral) The present appeals have come 1.10.2011 passed by the Hon’ble 6 of 2011, wherein the apex Cou “We are of the view that, in were required to be given by the Court, particularly when, by the im Court has overruled the decision of ies to the High Court under Sectio Court ought to have given it's findi he question whether there was any

AB AND HARYANA AT RH ITA-383-2006 (O&M) Date of Decision:14.10.2024 X, KARNAL ...…...Appellant V/s. OUSE, PANIPAT

….....Responden

ITA-384-2006 (O&M) Date of Decision: 14.10.2024 X, KARNAL ...…...Appellant V/s. N HOUSE, PANIPAT

….....Responden

NJEEV PRAKASH SHARMA NJAY VASHISTH ng/Hybrid Mode) Standing counsel partment. and r the respondent(s)/assessee(s). e up before this Court after th e Supreme Court in Civil Appea urt has held as under:- n this case, detailed reasons e division Bench of the High mpugned judgement, the High f ITAT. Since statutory appeal on 260A of the Act, the High ings in detail, particularly on y error of law in the decision nt nt he al Suresh Kumar 2024.10.19 11:31 I attest to the accuracy and integrity of this document

ITA-383-2006 ( ITA-384-2006 (

o I c n t t H a t o a 2. I Court on 0 respondent(s) mechanically any materia proceedings. 3. L submissions t Income Tax u Act of 1961”) Officer dated passed by the various block 4. O respondent(s) order, a ques (O&M) and (O&M) Page 2 of 4 of ITAT and whether that error cau In any event, this Court is of the circumstances of this case, since not heard, indulgence is being sho he High Court on the appointed da his reason alone, we set aside the High Court and remit the case f accordance with law. We do not w he merits of the case. The impugne on the ground that an opportuni appellant (assessee) to argue his ca The civil appeals are, acco

It is noticed that earlier the prese 01.02.2011 without giving op and the Division Bench held accepted the returned income w l examined during examini Learned counsel for the appellan that the order dated 03.03.200 under Section 263 of the Incom ) dated 03.05.2005 whereby it se d 03.09.2003, did not call for e Income Tax Appellate Tribuna k periods was liable to be set asid On the other hand, learned /assessee(s) submits that before stionnaire was put to him with used prejudice to the Revenue. e view that, on the facts and the appellant (assessee) was own to him to appear before ate and argue the matter. For e impugned judgement of the for de novo consideration in ish to express any opinion on ed judgement is set aside only ity needs to be given to the ase before the High Court. ordingly, allowed.” ent Appeals were decided by thi pportunity of hearing to th that the Assessing Officer ha without scrutinizing or referring t ing during block assessmen nt/Revenue has again asserted it 05 passed by the Commissione me Tax Act, 1961 (for short “th et aside the order of the Assessin any interference and the orde al (for short “the ITAT”) for th de. d counsel appearing for th the Assessing Officer passed a regard to various entries and t is he d o nt ts er he g er he he n o Suresh Kumar 2024.10.19 11:31 I attest to the accuracy and integrity of this document

ITA-383-2006 ( ITA-384-2006 (

explain the so detailed enqu conclusionsan assessee at Pa and (d) fresh details and it i 5. L out that eve respondent(s) as on the date ought to have 6. W Finding of th raised by the respondent(s) which is on re Pages 130 to 7. W the Assessing he has condu one page orde required, or r the entire enq ITAT has exa Assessing Of (O&M) and (O&M) Page 3 of 4 ource of cash found during the uiry was conducted by the Asse nd on four issues i.e. (a) cash anipat House; (b) cash found at D h investment, the respondent(s is thereafter the Assessing Office Learned counsel for the appellan en after the explanations ha , the issue regarding availability e of search remained to be exam e made its own enquiries with reg We have carefully examined t he fact has been arrived at by Assessing Officer and supportin regarding the cash found at P ecord at particular Pages as ment 150 and Pages 151 to 154) of the We are of the considered view g Officer, he need not mention a ucted and merely because the A er, imposing the required tax to b reaches to a conclusion that no quiry proceedings can be seen amined the paper-book and foun fficer and after due enquiry and course of search and seizure. A essing Officer before reaching t h found at the premises of th Delhi House; (c) unsecured loans s)/assessee(s) had submitted it er passed an order of assessment nt/Revenue has, however, pointe aving been submitted by th y of cash with the respondent(s mined and the Assessing Office gard to the same. the order passed by the ITAT the ITAT that the queries wer ng evidence was produced by th Panipat House and Delhi Hous tioned in the ITAT order (namel e paper book. that in the final order passed by about the detailed enquiry whic Assessing Officer’s order may b be paid by the respondent(s), if s payment is required to be made from the paper-book since, th nd that queries were raised by th d after examining the necessar A o he s; ts t. d he s) er T. re he se y y h be o e, he he y Suresh Kumar 2024.10.19 11:31 I attest to the accuracy and integrity of this document

ITA-383-2006 ( ITA-384-2006 (

evidence, the is not erroneo examining the 8. T regarding inv qua non for in the Assessing resulted in ca both the cou required to be 9. N Appeals. Acc 10. A disposed of ac

October 14, 2 Ess Kay

Whether Whether R (O&M) and (O&M) Page 4 of 4 assessment order has been passe ous, cannot be again re-examine e factual aspects again. The question before this Court voking of powers under Section nvoking powers under Section 2 Officer has passed the order er ausing loss of revenue and again nts, we find that the order of e interfered with as has been alre No substantial question of law a ordingly, these appeals are dism All pending applications filed ccordingly.

[SANJEEV

[SAN 2024 speaking / reasoned

: Reportable

: ed. Its observations that the orde d by us in Appeal as it would b would only arise to the aspec 263 of the Act of 1961.The sin 263 of the Act of 1961 are (i)tha rroneously; and (ii) the order ha nst the interest of the Revenue.O f the Assessing Officer was no eady found by the ITAT. arises for examination in both th issed. in these Appeals shall stan

V PRAKASH SHARMA] JUDGE NJAY VASHISTH] JUDGE

Yes / No Yes / No er be ct ne at as n ot he d Suresh Kumar 2024.10.19 11:31 I attest to the accuracy and integrity of this document

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