PRINCIPAL COMMISSIONER OF INCOME TAX 9 KOLKATA vs. HUMARA INDIA CREDIT COOPERATIVE SOCIETY LTD

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ITAT/247/2022HC CalcuttaWBCHCO005663202203 February 2023Author: HON'BLE JUSTICE T. S. SIVAGNANAM,HON'BLE JUSTICE HIRANMAY BHATTACHARYYA2 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the appeal by the Revenue fails and is dismissed. The Court found that the entire matter was factual and no substantial question of law arose for consideration. The Tribunal had extensively considered the factual situation and found that the assessee was not given an opportunity by the Principal Commissioner (PCIT) to explain or controvert a new issue that was taken up for consideration by the PCIT, which was not an issue put to the assessee initially. Therefore, the assumption of jurisdiction by the PCIT under Section 263 was not justified. The operative direction was the dismissal of the appeal.

What were the facts?

The Revenue, represented by the Principal Commissioner of Income Tax 9, Kolkata, filed an appeal under Section 260A of the Income Tax Act, 1961, against an order dated December 15, 2021, corrected on February 9, 2022, by the Income Tax Appellate Tribunal (ITAT) in ITA No.192/Kol/2021 for the assessment year 2016-2017. The appeal challenges the ITAT's decision regarding the Principal Commissioner's assumption of jurisdiction under Section 263 of the Act. The core of the dispute revolves around whether the PCIT's order under Section 263 was justified and the scope of issues set aside for fresh assessment.

What were the issues?

The Tribunal was asked to decide the following substantial questions of law: 1. Whether the Tribunal erred in holding that the Principal Commissioner of Income Tax – 9, Kolkata, in his order under Section 263 of the Income Tax Act, 1961, had set aside only a single issue of verification of the allowability of carrying forward of loss by the Assessing Officer? 2. Whether the Tribunal erred in not recognizing that the assessee’s claim of substantial deduction in Schedule BP of the Income Tax Return and its non-verification by the Assessing Officer was an issue in the order passed under Section 263, leading to the assessment order being set aside for fresh assessment on this ground? 3. Whether the Tribunal erred in not recognizing that substantial investment in the Balance Sheet, income/advance/investment in shares by the assessee, and their non-verification by the Assessing Officer were issues in the order passed under Section 263, leading to the matter being sent back for fresh assessment on these grounds? The Revenue contended that the ITAT erred in its findings regarding the scope of issues set aside by the PCIT under Section 263. The Assessee's arguments are not explicitly recorded, but the Tribunal's reasoning suggests the assessee was not given an opportunity to explain new issues raised by the PCIT.

Which sections of the Income-tax Act were involved?

Section 260A,Section 263

AI-generated summary — verify with the full judgment below

OD–1 IN THE HIGH COURT AT CALCUTTA SPECIAL JURISDICTION (INCOME TAX) ORIGINAL SIDE ITAT/247/2022 IA NO: GA/2/2022 PRINCIPAL COMMISSIONER OF INCOME TAX 9 KOLKATA VS. HUMARA INDIA CREDIT COOPERATIVE SOCIETY LTD. BEFORE : THE HON’BLE JUSTICE T.S. SIVAGNANAM And THE HON’BLE JUSTICE HIRANMAY BHATTACHARYYA Date : 3rd February, 2023 Appearance : Mr. Om Narayan Rai, Adv. Mr. Soumen Bhattacharyya, Adv. …for appellant Mr. Prityush Jhunjhunwalla, Adv. Mr. U. Sharma, Adv. …for respondent

The Court : - This appeal by the revenue has been filed under Section 260A of the Income Tax Act, 1961 (the Act) is directed against the order dated 15th December, 2021 and corrected by order dated 9th February, 2022 in ITA No.192/Kol/2021 for the assessment year 2016-2017. The revenue has raised the following substantial questions of law for consideration:- (a) Whether the Learned Tribunal has committed substantial error in law by holding that the Principal Commissioner of Income Tax – 9, Kolkata in his order passed under Section 263 of the Income Tax Act, 1961 had set aside only a single issue of verification of allowability of carrying forward of loss by the Assessing Officer? (b) Whether the Learned Tribunal has committed substantial error in law in not recognizing that the assessee’s claim of substantial deduction in Schedule BP of Income Tax Return and non-verification of the same by Assessing Officer was an issue in the of order passed under Section 263 of

the Income Tax Act, 1961 and the assessment order was set aside on such ground ordering fresh assessment ? , (c) Whether the Learned Tribunal has committed substantial error in law in not recognizing that substantial amount of investment in the Balance Sheet, income/advance/investment in share by assessee and not- verification of the same by Assessing Officer was an issue in the order passed under Section 263 of the Income Tax Act, 1961 and was set aside and the matter was sent back to the Assessing Officer for fresh assessment on such ground ? Heard learned Counsel for either side. The short question which falls for consideration is whether the assumption of jurisdiction by the Principal Commissioner of Income Tax 9 [PCIT] under section 263 of the Act was justified. On going through the order passed by the learned tribunal we find that the learned tribunal has extensively considered the factual situation and found that the assessee was not given any opportunity by the PCIT to explain or controvert a new issue which was taken up for consideration by the PCIT which was not an issue which was put to the assessee at the first instance. On going through the order impugned we find that the entire matter is factual and no question of law much less substantial question of law arises for consideration. For the above reasons, the appeal fails and dismissed. Consequently, the application, GA/2/2022 stands closed. (T.S. SIVAGNANAM, J.)

(HIRANMAY BHATTACHARYYA, J.) Pkd/GH.

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