COMMISSIONER OF INCOME TAX vs. INDRAJEET SINGH SALUJA

'l .^SK^ §. 'C-^fy^^ g?' '^^^•" " ff ci •^, HIGH COURT OF CHHATTISGARH AT BILASPUR Tax Case (Income Tax Appeal) No.45 of 2008 APPELLANT: Commissioner of Income Tax, Bilaspur (CG) Versus RESPONDENT: Indrajeet Singh Saluja, Prop. Hotel Preet, Bus Stand, Bilaspur (CG) JUDGMENT FOR CONSIDERATIOh"— HON'BLE SHRI R.N. CHANDRAKAR, J eiu^-i^f^— o -tk Sd/- TVDG'^ -10-2010 Sd/- R.N. Chandrakar Judge POST FOR JUDGMENT ON 7 OCTOBER,2010 Sd/- Dhirendra Mishra Judge

HIGH COURT OF CHHATTISGARH AT BILASPUR Tax Case (Income Tax A^peal) No.45 of 2008 APPELLANT: Commissioner of Income Tax, Bilaspur (CG) Versus RESPONDENT: Indrajeet Singh Saluja, Prop. Hotel Preet, Bus Stand, Bilaspur (CG) Present: Shri Rajeev Shrivastava, counsel for the appellant. Shri RanbirSingh Marhas, counsel for the respondent. ^. Division Bench: Hon'ble Shri Dhirendra Mishra & Hon'ble Shri R.N, Chandrakar. JJ. JUDGMENT (Delivered on-j^ October, 2010) The following judgment of the Court was delivered by Dhirendra Mishra, J. 1. This appeal is admitted on the following substantial question of law:- • "Whether on the facts and in the circumstances of the case, the ITAT wasjustified inlaw in canceling the order of the CIT only on the ground that the order was based on mere change of opinion while overlooking the facts that specific infirmities and errors had been clearly mentioned in the order?" 2. Briefly stated facts of the case are that the assessee filed his return for the assessment year 2003-04 disclosing the total income of Rs.2,61,676/- including additional income of Rs.7,12,265/- detected during survey. The Assessing Officer completed the assessment under Section 143 (3) of the Income Tax Act, 1961 (for short 'the Act') on total income of Rs.4,11 ,470/-. 3. The CIT on examination ofthe assessment record found that:-

(i) The assessee claimed and was allowed by the A.O. expenses debited in the account (including) prorate depreciation against the said undisclosed investment in clear-cut violation of section 69 and 69CoftheAct. (ii) The assessee made the total investment of Rs.29,04,102/- in the entire hotel and the same as accepted by the A.O. without making any investigation about the sources of the same. (iii) The B/sheet shows that a loan of Rs.25,28,258/- was taken from bank out of which only Rs.18,00,000/- was apparently utilized towards construction. The fate of the balance of Rs.7,28,258/-was not investigated by the A.O. (iv) As this was the first year of the return, the sources of the amount reflected in the capital account was not verified by the A.O. (v) In the absence of any valuation report, it is not known how the A.O. accepted value of the building shown without having any guidance from the competent authority." 4. After issuing notice under Section 263 (1) of the Act and after considering the written reply of the assessee, the CIT pointed out specific errors committed by the Assessing Officer during assessment proceedings as detailed in paragraphs 4, 4.1, 4.2, 4.3, 4.4 & 5. It was further observed that assessment in the case has been completed by the A.O. in utter haste, failing in the process both to examine the facts properly and also in initiating penalty proceedings for the concealment of particulars of income by the assessee. It suffers from infirmities and accordingly, it was held that the orderof the A.O. in this case is erroneous and prejudicial to the . interest of the revenue. The assessment order was cancelled under Section 263 with direction to the A.O. to frame it afresh. It was further directed that while passing the order de novo, the A.O. will examine the issues mentioned in the

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order keeping in view the actions contemplated under Section 271 (1)(c)oftheAct. 5. The assessee went up in appeal against the order of the CIT before the Tribunal, however, the Tribunal cancelled the order of the CIT with an observation that "a close perusal of the relevant documents and evidences, which have been placed before us in form of paper books, makes it clear that the assessee has placed all the documents and evidences in respect of these items before the A.O. and the A.O. after perusing the same has completed the assessment. Since the assessment under section 143(3) was completed by the A.O. only after perusing the relevant details and evidences placed by the assessee, the action of Id. CIT in invoking the provision under section 263 is nothing but is based on mere change of opinion, which is not permissible under the law as held by the different Courts and Tribunals." 6. Learned counsel for the appellant submitted that CIT after careful examination of the record has detailed various aspects in its order which clearly points out that assessment was completed in haste and without proper enquiry. The order under Section 263 was passed after due notice and after affording opportunity of hearing to the assessee, however, the ITAT without dealing with various aspects detailed in the order of the CIT has cancelled the order with an observation that the order under Section 263 of the Act isnothing but is based on mere change of opinion which is not permissible under the law. 7. Relying upon decisions of this Court in the matters of Commissioner of Income Tax, Bilaspur Vs. Harish Kumar Shah {Tax Case No.46 of

@ 2008, decided on 8 January, 2010} and Commissioner of Income Tax, Bilaspur (CG) Vs. Dr. Smt. Anju Goyal {Tax Case No.36/2008, decided on 1 September, 2009}, it was argued that the present case is squarely covered by the law laid down by this Court in the aforesaid judgments. 8. On the other hand, learned counsel for the respondent/assessee submitted that the instant appeal has been preferred by the CIT whereas the order under Section 263 (1) has been passed by the CIT in exercise of its quasi judicial function. The appeal by the revenue under Section 260-A can be preferred by the Chief Commissioner or the Commissioner of Income Tax. Filing of appeal by the CIT for vindication of its own order passed under Section 263 (1) while discharging quasi judicial function is impermissible and the instant appeal ought to have been filed by the Chief Commissioner. On this ground alone, the appeal deserves to be dismissed. 9. It was further argued that the Tribunal has passed the impugned order after going through the relevant documents and evidences which have been placed before it in form of paper book and the Assessing Officer has also completed the assessment after perusing the same. 10. In these circumstances, the order of the Commissioner under Section 263 (1) eannot be affirmed by setting aside the order of the Tribunal only on the ground that the Tribunal has not dealt with errors and infirmities pointed out by the CIT by a reasoned order. At the most, the matter may be remanded to the Tribunal for passing a reasoned order afresh after affording opportunity of hearing to the parties.

y 11. Heard learned counsel for the parties. 12. So far as objection of the respondent against the appeal preferred by the CIT against the order of the Tribunal is concerned, though CIT has passed the order under Section 263 (1) of the Act in discharge of its quasi judicial function, but the instant appeal has been preferred bythe CIT in his administrative capacity in the interest of the revenue. Therefore, we are of the considered opinion that the instant appeal cannot be dismissed only on the ground that it has been filed by the same authority whose orderhas been reserved by the impugned order. is.After going through theorders of theA.O. as also of the CIT passed under Section 263 (1) and the impugned order, We find that the Tribunal, without adverting to the reasons assigned by the CIT for canceling the order ofassessment passed by the A.O., has cancelled the order of the CIT on the ground that the same is based on mere change of opinion. The issue involved in this appeal has already been considered and decided by this Court in the matters of Dr. Smt. Anju Goyal and Harish Kumar Shah (Supra). 14. For the aforesaid reasons, we are of the opinion that the impugned order of the ITAT cannot be sustained. Accordingly, the same is hereby set aside. The matter is remanded to the Tribunal to decide the appeal preferred by the assessee against the order of CIT afresh by a reasoned order after affording opportunity of hearing to the parties. Sd/- DhirendraMishra Judge Sd/- R.N. Chandrakar Judge Barve