SRI RAMAKANT SINGH vs. COMMISSIONER OF INCOME TAXCEN

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CWJC/3556/2010HC PatnaBRHC01023117201003 March 20104 pages
AI SummaryRemanded

What did the High Court hold?

The High Court held that the controversy raised in the writ petitions was squarely covered by an inter-parte order dated February 16, 2010, passed in C.W.J.C. No. 2647 of 2010. In that order, the High Court noted that the assessee had participated in the proceedings before the Commissioner and that the ITAT had remanded the matter to the Commissioner. The ITAT's order, as reproduced in the judgment, stated that due to the non-production of the questionnaire and the assessee's reply by the Assessing Officer, it was not possible to ascertain the nature of enquiries. Therefore, in the interest of justice, the ITAT set aside the Commissioner's order and referred the issue back to the Commissioner's file with directions to decide it afresh after giving the assessee a proper opportunity of being heard. Consequently, the High Court was not inclined to interfere with the order at that stage and directed the Commissioner to dispose of the matter within three months. The writ petitions were disposed of in identical terms, with the date of hearing to be postponed to a further reasonable date.

What were the facts?

These are four writ petitions filed by M/s Ramakant Singh (a partnership firm) and Sri Ramakant Singh (an individual partner) against the Commissioner of Income Tax (Central), Patna, and the Assistant Commissioner of Income Tax, Central Circle 1, Patna. The petitions challenge notices issued under Section 263 of the Income Tax Act, 1961. The core of the dispute revolves around a notice dated September 19, 2007, issued by the Commissioner of Income Tax (Central). The assessee contended that the notice was flawed as the Commissioner had not recorded that the assessing officer's order was both erroneous and prejudicial to the revenue. The revenue pointed out that the assessee had appeared before the Commissioner, filed a show-cause reply, and the Commissioner had passed a final order under Section 263. Against this order, the assessee had appealed to the Income Tax Appellate Tribunal (ITAT), which had remanded the matter back to the Commissioner.

What were the issues?

1. Whether the notice issued under Section 263 of the Income Tax Act, 1961, by the Commissioner of Income Tax (Central) was valid, considering the assessee's contention that the Commissioner had not recorded that the order passed by the assessing officer was erroneous as well as prejudicial to the interest of the revenue. Assessee's Contention: The notice under Section 263 is liable to be quashed because the Commissioner failed to record the prerequisite findings that the order passed by the assessing officer was erroneous and prejudicial to the interest of the revenue. The assessee relied on the principle that these are essential pre-conditions for invoking Section 263. Revenue's Contention: The assessee had appeared before the Commissioner, filed a show-cause reply, and a final order under Section 263 was passed. Subsequently, the assessee filed an appeal before the Income Tax Appellate Tribunal (ITAT), which remanded the matter to the Commissioner. The revenue stated that the ITAT's order, which directed a fresh decision by the Commissioner after allowing the assessee a proper opportunity of being heard, was the operative direction. The revenue did not dispute the facts presented by the assessee regarding the ITAT's order.

Which sections of the Income-tax Act were involved?

Section 263

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF JUDICATURE AT PATNA CWJC No.3538 of 2010

M/S RAMAKANT SINGH, a partnership firm having its place of business at 101, Lotus Apartment, New Patliputra Colony, Patna- 800 013 through one of its partners Sri Ramakant Singh, son of Late Ram Khelawan Singh, aged about 56 years, residing at 101, Lotus Apartment, New Patliputra Colony, Patna-800 013, P.O. New Patliputra Colony, P.S. Patliputra in the town and district of Patna ….. Petitioner 1. COMMISSIONER OF INCOME TAX(CENTRAL), PATNA, 2. Assistant Commissioner of Income Tax, Central Circle 1, Patna, 3. Union of India through the Secretary, Department of Revenue, North Block, New Delhi – 110 001 …… Respondents. CWJC No.3550 of 2010

M/S RAMAKANT SINGH, a partnership firm having its place of business at 101, Lotus Apartment, New Patliputra Colony, Patna- 800 013 through one of its partners Sri Ramakant Singh, son of Late Ram Khelawan Singh, aged about 56 years, residing at 101, Lotus Apartment, New Patliputra Colony, Patna-800 013, P.O. New Patliputra Colony, P.S. Patliputra in the town and district of Patna ………………………………….. Petitioner

1.

COMMISSIONER OF INCOME TAX (CENTRAL), PATNA, 2. Assistant Commissioner of Income Tax, Central Circle 1, Patna, 3. Union of India through the Secretary, Department of Revenue, North Block, New Delhi – 110 001 …………….… Respondents.

CWJC No.3556 of 2010

SRI RAMAKANT SINGH, son of Late Ram Khelawan Singh, aged about 56 years, residing at 101, Lotus Apartment, New Patliputra Colony, Patna-800 013, P.O. New Patliputra Colony, P.S. Patliputra in the town and district of Patna ….... Petitioner

1.

COMMISSIONER OF INCOME TAX (CENTRAL), PATNA, 2. Assistant Commissioner of Income Tax, Central Circle 1, Patna, 3. Union of India through the Secretary, Department of Revenue, North Block, New Delhi – 110 001 …………… Respondents CWJC No.3563 of 2010

SRI RAMAKANT SINGH, son of Late Ram Khelawan Singh, aged about 56 years, residing at 101, Lotus Apartment, New Patliputra Colony, Patna-800 013, P.O. New Patliputra Colony, P.S. Patliputra in the town and district of Patna ….. Petitioner 1. COMMISSIONER OF INCOME TAX (CENTRAL), PATNA, 2. Assistant Commissioner of Income Tax, Central Circle 1, Patna, 3. Union of India through the Secretary, Department of Revenue, North Block, New Delhi – 110 001 ………….. Respondents. -----------

03.03.2010 Heard Mr. Pankaj on behalf of Mr. Vikash Jain, learned counsel for the assessee-petitioners. It is fairly agreed at the Bar that the controversy raised in the present writ petitions is squarely covered by an inter-parte order dated 16.2.2010 in C.W.J.C. No. 2647 of 2010, which reads as follows:-

“By this writ petition the petitioner has prayed for issue of a writ of certiorari for quashment of the notice dated 19.9.2007 issued under Section 263 of the Income tax Act, 1961 (for brevity „the Act‟) by the Commissioner of Income Tax (Central) on the ground that the notice to show cause is sensitively susceptible inasmuch as the Commissioner has not recorded that the order passed by the assessing officer is erroneous as well as prejudicial to the interest of revenue.

Ordinarily, we would have dwelled upon the said issue but Mr. Harshwardhan Prasad, learned senior standing counsel for Revenue has submitted that the assessee petitioner had appeared before Commissioner and participated by filing a show-case and the Commissioner had passed a final order under Section 263 of the Act and against the said order the assessee had preferred an appeal before the Income tax Tribunal (for short „the Tribunal‟) which has remanded matter to Commissioner of Income Tax (Central). This fact is not disputed by Mr. Jain, learned counsel for the assessee-petitioner.

In this context, we may reproduce paragraph 10 of the order passed by the Tribunal:-

“10. So far as, present case is concerned, we are of the opinion that assessee having not placed a copy of questionnaire dated 17.11.2006 issued by the A.O. and also a copy of assessee‟s reply dated 18.09.2006, it is not possible for us to decide as to was the nature or extent of enquiries/investigation, if any conducted by the A.O. and with respect to which issues the questionnaire was issued, we are unable to decide the assessee‟s plea and since the assessee‟s plea is vital and goes to the roots of cause, we consider it, in the interest of justice, justified to set aside the combined order of CIT and refer the issue back to his file with the directions that issue raised by him by way of show cause notice be decided afresh in accordance with law relating to provisions of section 263 after allowing the assessee a proper opportunity of being heard.”

In view of the aforesaid, we are not

inclined to interfere with the order at this stage. However, it is directed that the Commissioner of Income Tax (Central) shall dispose of the matter within a period of three months from today.

As we have been apprised the said authority has fixed the date on 17.2.2010, as agreed to by learned counsel for the parties, the same should be postponed to a further reasonable date and the matter shall be heard and disposed of in terms of the directions given by the Tribunal within the time frame stipulated hereinabove.

The writ petition is accordingly disposed of.”

In view of the aforesaid concession, these writ petitions also stand disposed of in identical terms of the aforesaid order passed in C.W.J.C. No. 2647 of 2010, but without any order as to costs.

Dilip ( Dipak Misra, C.J. )

( Mihir Kumar Jha, J. )

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