COMMISSIONER OF INCOME TAX (CENTRAL) LUDHIANA vs. NARINDER KUMAR C/O M/S JAGAN NATH RAM SAHAI

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ITR/1/2012HC Punjab & HaryanaPHHC01099469201230 October 2014Bench: MR. JUSTICE AJAY KUMAR MITTAL,MR. JUSTICE ARUN MONGA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the Income Tax Appellate Tribunal (ITAT) had misread the High Court's order dated 26.07.2004 passed in ITC No.134 of 1994. The earlier order had dismissed the revenue's petition seeking reference of questions of law, stating that the matter was fully covered by this Court's decision in ITC No.60 of 1991 (Commissioner of Income Tax (Central), Ludhiana v. Dharam Pal) decided on 19.11.1998. The High Court clarified that the dismissal meant the reference was not maintainable, not that the questions should be referred. Consequently, the ITAT's subsequent action of forwarding a reference based on this misinterpretation was incorrect. The High Court declined the reference as not maintainable. No finding was given on the merits of the original assessment or the ITAT's order regarding the addition of unexplained investment in shares.

What were the facts?

The revenue, Commissioner of Income-tax (Central) Ludhiana, sought a reference of two questions of law to the High Court concerning an assessment year not specified in the judgment. The assessee is Narinder Kumar C/o M/s Jagan Nath Ram Sahai. The Income Tax Appellate Tribunal (ITAT) had previously passed an order. The revenue filed an application under Section 256(2) of the Income Tax Act, 1961, seeking reference of these questions. This application was dismissed by the High Court on 26.07.2004. However, the ITAT inadvertently construed this dismissal order as a direction to refer the questions. The present proceeding is a consequence of this misinterpretation by the ITAT, leading to the High Court declining the reference.

What were the issues?

1. Whether on the facts and in the circumstances of the case, the Tribunal's order was vitiated by non-consideration of relevant facts and by taking into account irrelevant facts and is therefore perverse? (Question of law, turning on the Tribunal's assessment of facts). 2. Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in deleting the addition made by the assessing officer towards unexplained investment in the purchase of shares worked out by the assessing officer on the basis of proved facts/collateral evidence in the possession of the Department? (Question of law, turning on the deletion of additions by the Tribunal). Revenue's Contentions: The revenue argued that the ITAT had inadvertently construed the High Court's dismissal order dated 26.07.2004 in ITC No.134 of 1994 as a direction to refer the questions of law, which was a misreading. The dismissal order itself stated that the matter was covered by a previous High Court decision, implying the reference was not maintainable. Assessee's Contentions: No specific contentions for the assessee are recorded in the judgment.

Which sections of the Income-tax Act were involved?

Section 256(2)

AI-generated summary — verify with the full judgment below

ITR No.1 of 2012 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. ITR No.1 of 2012 Date of Decision: 30.10.2014 Commissioner of Income-tax (Central) Ludhiana ..Appellant versus Narinder Kumar C/o M/s Jagan Nath Ram Sahai ..Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE AMIT RAWAL Present: Mr. Rajesh Katoch, Advocate, for the appellant. RAJIVE BHALLA, J. (ORAL) Counsel for the revenue has brought to our notice that ITC No.134 of 1994, “Commissioner of Income Tax (Central) Ludhiana versus Sh.Narinder Kumar C/o M/s Jagan Nath Ram Sahai filed under Section 256(2) of the Income Tax Act, 1961 seeking reference of two questions of law was dismissed on 26.7.2004 but the Tribunal inadvertently construed this order as a direction to refer these questions of law to the High Court. We have heard counsel for the revenue and perused the record. A perusal of order dated 26.7.2004 passed in ITC No.134 of 1994 “Commissioner of Income Tax (Central)Ludhiana versus Sh.Narinder Kumar C/o M/s Jagan Nath Ram Sahai” reveals that the KUMAR VIRENDER 2014.11.12 16:35 I attest to the accuracy and authenticity of this docunt High Court Chandigarh

ITR No.1 of 2012 2 revenue sought reference of the following questions:- “ i) Whether on the facts and in the circumstances of the case, the Tribunal's order was vitiated by non- consideration or relevant facts and by taking into account the irrelevant facts and is therefore perverse?” ii) Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in deleting the addition made by the assessing officer towards unexplained investment in the purchase of shares worked out by the assessing officer on the basis of proved facts/collateral evidence in the possession of the Department?” A Division Bench passed the following order on 26.7.2004”- “Counsel for the petitioner fairly concedes that the matter is fully covered by the order of this Court in ITC No.60 of 1991 (Commissioner of Income Tax (Central), Ludhiana v. Dharam Pal) decided on 19.11.1998. In view of the above, this petition is also dismissed.” A perusal of this order reveals that ITC No.134 of 1994 was dismissed as questions of law were covered against the revenue by order dated 19.11.1998, passed in ITC No.60 of 1991 (Commissioner of Income Tax (Central), Ludhiana v. Dharam Pal). The ITAT has, however, forwarded a reference by misreading order dated 26.7.2004 passed in ITC No.134 of 1994 “Commissioner of Income Tax (Central) Ludhiana versus Sh.Narinder Kumar C/o M/s KUMAR VIRENDER 2014.11.12 16:35 I attest to the accuracy and authenticity of this docunt High Court Chandigarh

ITR No.1 of 2012 3 Jagan Nath Ram Sahai”. Consequently, we decline the reference as not maintainable. ( RAJIVE BHALLA ) JUDGE ( AMIT RAWAL ) 30.10.2014 JUDGE VK KUMAR VIRENDER 2014.11.12 16:35 I attest to the accuracy and authenticity of this docunt High Court Chandigarh

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