M/S RAMAKANT SINGH vs. COMMISSIONER OF INCOME TAXCEN

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CWJC/2647/2010HC PatnaBRHC01027572201016 February 20103 pages
AI SummaryRemanded

What did the High Court hold?

The High Court, in view of the submission by the Revenue that the assessee had appeared before the Commissioner, filed a show-cause, and that the Income Tax Tribunal had subsequently remanded the matter back to the Commissioner, was not inclined to interfere with the order at that stage. The Tribunal's order, as reproduced, indicated that due to the absence of a copy of the questionnaire and the assessee's reply, it was not possible to ascertain the nature of inquiries by the Assessing Officer. Therefore, in the interest of justice, the Tribunal set aside the order and referred the issue back to the Commissioner for a fresh decision under Section 263 after providing the assessee a proper opportunity of being heard. The High Court directed the Commissioner to dispose of the matter within three months from the date of the order and, as agreed by counsel, postponed the hearing date of 17.2.2010 to a further reasonable date.

What were the facts?

The petitioner, M/s Ramakant Singh, a partnership firm, filed a writ petition before the Patna High Court challenging a notice dated 19.9.2007 issued under Section 263 of the Income Tax Act, 1961, by the Commissioner of Income Tax (Central), Patna. The petitioner contended that the notice was susceptible because the Commissioner had not recorded that the assessing officer's order was erroneous and prejudicial to the revenue's interest. The Revenue submitted that the petitioner had appeared before the Commissioner, filed a show-cause reply, and a final order was passed under Section 263. The petitioner had then appealed to the Income Tax Appellate Tribunal (ITAT), which remanded the matter back to the Commissioner. This fact was not disputed by the petitioner.

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 alleged failure to record that the assessing officer's order was erroneous and prejudicial to the interest of revenue. Assessee's contention: The notice to show cause is susceptible 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. Revenue's contention: The assessee-petitioner had appeared before the Commissioner, participated by filing a show-cause, and the Commissioner had passed a final order under Section 263. The assessee had preferred an appeal before the Income Tax Tribunal, which had remanded the matter to the Commissioner.

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.2647 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 Versus 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, Ministry of Finance, Government of India, Central Secretariat, North Block, New Delhi- 110 001. Respondents ----------

For the Petitioner : Mr. Vikash Jain, Advocate For the Revenue : Mr. Harshwardhan Prasad, Advocate

Mrs. Archana Sinha, Advocate For the UOI : Mr. P.L.Jaiswal, Advocate ----------

2.

16.2.2010. 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 the 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 the matter to the 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.

Pawan/

(Dipak Misra, CJ)

(Ramesh Kumar Datta, J.)

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