PRINCIPAL COMMISSIONER OF INCOME TAX 2 KOLKATA vs. MISRILALL MINES PVT LTD

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ITAT/261/2023HC CalcuttaWBCHCO005510202322 January 2024Bench: THE HON'BLE THE CHIEF JUSTICE T.S SIVAGNANAM,HON'BLE JUSTICE SUPRATIM BHATTACHARYA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the conclusion of the ITAT could not be doubted. The Tribunal had elaborately examined the factual position and noted that there were two possible views that could be taken by the assessing officer, and the assessing officer had indeed taken one of those views. Consequently, the Tribunal concluded that jurisdiction under Section 263 of the Act was not available to the Principal Commissioner when the case involved a debatable issue. The High Court found no reason to interfere with this conclusion. The substantial questions of law were answered against the revenue. The appeal filed by the revenue was dismissed.

What were the facts?

The appeal by the revenue, the Principal Commissioner of Income Tax 2 Kolkata, is directed against an order dated March 28, 2023, passed by the Income Tax Appellate Tribunal (ITAT) 'C' Bench, Kolkata. The assessment year in question is 2017-18. The ITAT had quashed an order passed under Section 263 of the Income Tax Act, 1961, by the Principal Commissioner. The core of the dispute revolves around whether the Principal Commissioner had revisionary jurisdiction over a 'debatable matter' concerning the adjustment of capital loss (STT paid) with non-STT paid capital gains.

What were the issues?

1. Whether, on the facts and in the circumstances, the ITAT was justified in law to quash the order under Section 263 of the IT Act, 1961, on the ground that the Principal Commissioner of Income Tax had no revisionary jurisdiction on a debatable matter? 2. Whether, on the facts and in the circumstances, the ITAT was justified in law to observe that the issue of adjustment of setting off and carry forward of capital loss (STT Paid) with non-STT paid capital gain is a debatable issue, despite the fact that the issue of long-term profit/loss on shares, securities, and mutual funds is categorically covered under Section 10(38) of the IT Act, 1961, and cannot be termed as debatable? Assessee's Contention: The ITAT found that there were two possible views that the assessing officer could have taken, and the assessing officer had adopted one of these views. Therefore, the issue was debatable, and the Principal Commissioner lacked jurisdiction under Section 263. The ITAT referred to decisions of the Hon'ble Supreme Court in Malabar Industrial Co. Ltd. and Max India Ltd. Revenue's Contention: The revenue argued that the issue concerning capital gains and losses on shares, securities, and mutual funds, particularly in relation to Section 10(38), is not debatable and is categorically covered by the Act.

Which sections of the Income-tax Act were involved?

Section 263,Section 10(38),Section 260A

AI-generated summary — verify with the full judgment below

O-57 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE ITAT/261/2023 IA NO: GA/2/2023 PRINCIPAL COMMISSIONER OF INCOME TAX 2 KOLKATA VS MISRILALL MINES PVT LTD BEFORE : THE HON’BLE THE CHIEF JUSTICE T.S. SIVAGNANAM And THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA Date : 22nd January, 2024 Appearance : Ms. Smita Das De,Adv. Mr. Prithu Dudhoria, Adv. …for appellant Mr. Ananda Sen, Adv. ..for respondent The Court :- This appeal by the revenue filed under section 260A of the Income Tax Act [the Act] is directed against the order dated 28.3.2023 passed by the Income Tax Appellate Tribunal “C” Bench, Kolkata [Tribunal] in ITA No.259/Kol/2022 for the assessment year 2017-18. The revenue has raised the following substantial questions of law for consideration. [I] Whether on the facts and in the circumstances of the case the Learned Income Tax Appellate Tribunal was justified in law to quash the order under Section 263 of the IT Act, 1961 on the ground that Pr. CIT-II, Kolkata has o revisionary jurisdiction on debatable matte? [II] Whether on the facts and in the circumstances of the case the Learned Income Tax Appellate Tribunal was justified in law to observe that the issue of adjustment of setting off and carry forward capital loss [STT Paid] with non STT paid capital gain is a debatable

2 issue, despite the fact that the issue of long term profit/loss on shares, securities and mutual fund is categorically covered under Section 10[38] of the IT Act, 1961 and can not be termed as debatable? Heard learned Advocates on either side. The short question involved in this appeal is whether the Principal Commissioner of Income Tax should have exercised jurisdiction under Section 263 of the Act. The learned Tribunal has elaborately examined the factual position and noted that there were two views possible which should be taken by the assessing officer and the assessing officer has taken one of the views. Thus, the Tribunal came to the conclusion that the jurisdiction under Section 263 is not available to the PCIT when the case is a debatable issue. In this regard, several decisions have been referred to by the Tribunal, in particular, the decision of the Hon’ble Supreme Court in Malabar Industrial Co. Ltd. And Max India Ltd.. Thus, we find that the conclusion of the Tribunal cannot be doubted. In the result, the appeal is dismissed and the substantial questions of law are answered against the revenue. (T.S. SIVAGNANAM)

CHIEF JUSTICE

(HIRANMAY BHATTACHARYYA, J.) Pkd/GH.

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