PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL 2 KOLKATA vs. SMT MADHU NEOTIA

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ITAT/43/2024HC CalcuttaWBCHCO000374202407 February 2024Bench: THE HON'BLE THE CHIEF JUSTICE T.S SIVAGNANAM,HON'BLE JUSTICE SUPRATIM BHATTACHARYA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court condoned the delay in filing the appeals by the Revenue, exercising discretion due to the nature of the appeals being under Section 260A, which requires consideration of substantial questions of law. The Court found that the core issue was the validity of the reopening of the assessment. The Tribunal, after examining the facts, relied on the High Court's decision in M/s. Infinity Infotech Parks Ltd. and dismissed the Revenue's appeals. The High Court agreed with the Tribunal's application of the law, finding it to be correct and fully justified in rejecting the Revenue's appeals. Consequently, the High Court found no grounds to interfere with the Tribunal's order. The substantial question of law was answered against the Revenue, and the appeals were dismissed.

What were the facts?

The appeals were filed by the Revenue (Principal Commissioner of Income Tax Central 2 Kolkata) against the common order of the Income Tax Appellate Tribunal (ITAT) dated August 14, 2022. The ITAT's order pertained to assessment year 2006-07 and was in relation to appeals filed by the assessees, Harsh Vardhan Neotia and Smt. Madhu Neotia. The Revenue challenged the ITAT's decision to dismiss their appeals. There was a significant delay in filing these appeals by the Revenue, amounting to 1038 days for ITAT/35/2024 and 1044 days for ITAT/43/2024. The High Court heard learned counsel for both parties and took up both appeals together by consent.

What were the issues?

1. Whether the Learned Tribunal has erred in law and fact in holding that no addition could be made on other issues unless those other issues are connected to the issue on which reopening has been done? (Question of law and fact, concerning the scope of additions permissible upon reopening of assessment). Assessee's Contention: The judgment does not record specific contentions made by the assessees. However, it notes that the Tribunal applied legal principles from a previous decision of the High Court in the case of M/s. Infinity Infotech Parks Ltd. Revenue's Contention: The Revenue argued that the Learned Tribunal erred in law and fact by holding that additions on issues unrelated to the original reason for reopening were impermissible. The Revenue filed these appeals under Section 260A of the Income Tax Act, 1961, seeking to challenge the Tribunal's order.

Which sections of the Income-tax Act were involved?

Section 260A

AI-generated summary — verify with the full judgment below

OD - 2 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE ITAT/35/2024 IA NO: GA/1/2024, GA/2/2024 PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL 2 KOLKATA VS HARSH VARDHAN NEOTIA ITAT/43/2024 IA NO: GA/1/2024, GA/2/2024 PRINCIPAL COMMISSIONER OF INCOME TAX CENTRAL 2 KOLKATA VS SMT MADHU NEOTIA BEFORE : THE HON’BLE THE CHIEF JUSTICE T.S. SIVAGNANAM AND THE HON’BLE JUSTICE SUPRATIM BHATTACHARYA DATE : 7TH February, 2024. Appearance : Ms. Smita Das De, Adv. (in ITAT/43/2024) Mr. Tilak Mitra, Adv. (in ITAT/35/2024) ..for appellant Mr. Arun Kumar Upadhyay, Adv. Mr. S.K. Singh, Adv. Mr. Lokesh Singh, Adv. …for respondent. The Court :- We have heard learned Counsel on either side. By consent of both the parties ITAT/43/2024 is taken up together along with this appeal (ITAT/35/2024). These appeals have been filed by the revenue under Section 260A of the Income Tax Act, 1961 (the Act) challenging the common order passed by the Income Tax Appellate Tribunal “A” Bench (the Tribunal) dated 14.08.2022 in ITA No. 2143/Kol/2019 and ITA No. 2144/Kol/2019 for the assessment year

2 2006-07. The revenue has raised the following substantial question of law for consideration : i) WHETHER the Learned Tribunal has erred in law and fact in holding that no addition could be made on other issues unless those other issues are connected to the issue on which reopening has been done ? In ITAT No. 35 of 2024 there is a delay of 1038 days in filing the appeal and in ITAT No. 43 of 2024 there is a delay of 1044 days in filing the appeal. Though we are not fully convinced with the reasons assigned in the condone delay petition for not preferring the respective appeals within the period of limitation, since these appeals have been filed under Section 260A of the Income Tax Act, 1961 whereunder we are required to consider as to whether any question of law arose for consideration, we exercise discretion and condone the delay in filing the appeals. Accordingly, the condone delay applications are allowed. The question involved in this case is whether the reopening of the assessment was validly done in the case of the assessees. The learned Tribunal after examining the facts of the case took note of the decision of this Court in the case of M/s. Infinity Infotech Parks Ltd. and applied the legal principles laid down therein and dismissed the appeals filed by the revenue. We find that the law on the subject has been rightly taken note of by the learned Tribunal and the Tribunal was fully justified in rejecting the appeal filed by the revenue. Thus we find no ground to interfere with the order passed by the learned Tribunal.

3 Accordingly, the appeals are dismissed and the substantial question of law is answered against the revenue. The affidavit of service filed is taken on record. . (T.S. SIVAGNANAM) CHIEF JUSTICE (SUPRATIM BHATTACHARYA,J.) pkd/GH.

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