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120 orders · Page 3 of 3
The High Court held that the revenue's submission for reopening the assessment based on the non-disclosure of the valuation report by M/s. P. Krishnan & Associates was unsustainable. The Court reasoned that even if the petitioner was aware of the report, it would not make a difference unless it contained material relevant to the assessment that was not disclosed. A mere failure to furnish a document does not justify reopening; the department must prove that the contents of the document, relevant to the assessment, were not disclosed. The Court found that all material facts were not only disclosed but were brought to the notice of the AO and considered by him during the assessment proceedings. The queries raised and information sought by the AO indicated that he had noticed and considered the information supplied by the petitioner. Therefore, it could not be held that the petitioner had failed to disclose fully and truly all material facts necessary for its assessment. The Court made the rule absolute in terms of prayer (a), quashing the notice under section 148 and the order rejecting objections.
The High Court held that the AO and the ITAT had failed to properly consider the applications for stay. The AO did not provide adequate reasons for rejecting the stay application, particularly in light of the Special Bench judgment in the L.G. Electronics case. Similarly, the ITAT erred by solely focusing on the absence of irreparable loss and not considering other relevant factors for granting a stay, as outlined in previous High Court judgments. The Court emphasized that stay applications require judicial consideration and should not be rejected without hearing the assessee and providing brief reasons. The Court noted that the petitioner had serious issues to urge regarding the legitimacy of the demand. Given that the ITAT had expedited the hearing of the appeal, the Court refrained from deciding the stay application itself but made the rule absolute in terms of prayers (a) and (b), directing that pending the disposal of the appeal and for six weeks thereafter, the Revenue shall not take any coercive steps against the petitioner for enforcing the demand. The Court also directed that the petitioner shall not seek an adjournment of the hearing before the Tribunal.
The High Court held that the Income Tax Settlement Commission had jurisdiction to entertain the settlement applications. Regarding the first issue, the Court found that the applications were filed before the amended definition of 'case' under Section 245A(b) came into effect, and the original definition permitted applications for proceedings pending before any income tax authority, including those at the appellate stage. On the second issue, the Court held that the requirement under Section 245C was to pay tax on the full and true disclosure made at the time of filing the application. The subsequent declaration of additional income as a goodwill measure did not invalidate the original application. For the third issue, the Court clarified that Section 245C only requires a full and true disclosure of income not previously disclosed, not necessarily a new source of income. Regarding the fourth issue, the Court noted that STAR Ltd. had not filed an application for the assessment year under appeal, and other respondents were not prohibited from filing applications for other assessment years. Finally, concerning the fifth issue, the Court found that the application was for settling income, not solely for TDS liability, and thus the decision in Shaw Wallace was not applicable at this stage.
The High Court dismissed the writ petition on the grounds of laches and delay, refusing to exercise its extraordinary writ jurisdiction under Article 226 of the Constitution of India. The Court noted that the impugned order of transfer was passed on August 31, 2012, and the petitioner received it on December 7, 2012. The petition was filed on February 11, 2013, but no interim relief was sought until August 20, 2013, after the reassessment notices under Section 148 were issued. This inordinate delay, coupled with the petitioner's conduct in not challenging the transfer order promptly and allowing the Assessing Officer at Hyderabad to exercise jurisdiction, indicated acceptance of the transfer order. Consequently, the Court found no occasion to examine the petitioner's grievances on merits. The Court explicitly stated that the petitioner's conduct was indicative of acceptance of the transfer order, leading the Assessing Officer to exercise his jurisdiction.
The High Court, in light of its previous orders in similar cases concerning other sugar factories and relying on a judgment of the Apex Court dated September 25, 2012, passed in SLP (Civil) No. 8590/2010 and connected matters, allowed the appeal. The Court set aside the orders passed by the ITAT and the Commissioner of Income Tax (Appeals). The matter was remanded to the Commissioner of Income Tax (Appeals) for de novo consideration on the substantial questions of law. The Commissioner of Income Tax (Appeals) was directed to decide the matter on merits, in accordance with law, and uninfluenced by any prior findings and conclusions. The ratio decidendi is that in similar matters involving sugar factories and common issues, a remand for fresh consideration by the appellate authority is appropriate, following the precedent set by the Apex Court.
The High Court dismissed the petition, upholding the validity of the notice issued under Section 148 for reopening the assessment for AY 2007-08. The Court found substance in the revenue's submission that the Assessing Officer had tangible material to form a prima facie view that income chargeable to tax had escaped assessment. The primary reason for this was the petitioner's failure to disclose the loan of Rs. 1,19,42,900 received from its directors and their family members in its financial statement. The Court noted that the petitioner's argument that this amount was margin money reflected in Schedule 8 of the balance sheet was raised for the first time before the High Court. In their objections to the AO, the petitioner had merely stated that they were not obliged to disclose the transactions of their directors and their family members. The Court emphasized that an assessee must stand or fall by its objections to the grounds for reopening, and it is not open to urge fresh objections before the Court that the AO had no occasion to deal with, unless the notice is ex-facie without jurisdiction. Since the AO had a reasonable belief based on the material before him, the notice was sustained. The Court acknowledged that it would be a matter for the reassessment proceedings to determine if the amount was indeed margin money.
The High Court held that no substantial question of law arose for consideration in the present appeal. The Court noted that both the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal had found that the assessee had provided a complete and satisfactory explanation for the investments in jewelry. The lower appellate authorities had applied correct legal principles to arrive at the finding that the addition was not justified and required deletion. This finding of fact, affirmed by the IAT, led the High Court to conclude that the appeal was devoid of merits. Therefore, the appeal was dismissed.
The High Court held that the penalty under Section 272D of the Income Tax Act, 1961, could not be levied for violation of Section 269SS when there was a reasonable cause, as provided for under Section 273B. The Tribunal and the Commissioner of Income Tax (Appeals) had concurrently found that the assessee had made out a reasonable cause. The assessee's explanation was that it lacked Core-Banking facilities and had to borrow cash from sister concerns, which withdrew cash from their bank accounts. The High Court found that this explanation was reasonable, especially considering it was a transaction with sister concerns. The Court stated that it had no jurisdiction under Section 260A to substitute its view for that of the lower authorities when their view was not improbable or impossible. Therefore, the appeal was dismissed as it did not give rise to any substantial question of law.
The High Court held that the findings of the Tribunal and the CIT(A) were essentially factual. They had concurrently held that the lenders were agriculturists who sold cotton to the assessee, were shareholders, and had been repaid through account payee cheques. The Court found that the three ingredients of identity, creditworthiness, and genuineness of the transactions were satisfied, and the explanation offered by the assessee was satisfactory. The Court concluded that these concurrent factual findings did not give rise to any substantial question of law. Therefore, the appeal filed by the revenue was dismissed. The operative direction was the dismissal of the appeal.
The High Court held that the writ petition was maintainable. It found that the Assessing Officer (AO) had acted with undue haste in passing the assessment order dated December 19, 2013, despite being aware of the petitioner's intention to challenge the reopening proceedings and the pendency of a similar matter before the Court. The Court rejected the revenue's submission that the AO was unaware of the Asian Paints decision, stating that all authorities within the Court's jurisdiction are bound by its pronouncements. The Court found that the AO's actions appeared to be an attempt to overreach the Court and present a fait accompli. Consequently, the assessment order dated December 19, 2013, was set aside. Regarding the reopening itself, the Court held that the notice dated March 28, 2013, and the order dated November 20, 2013, were unsustainable. The Court reasoned that the grounds for reopening were based on a change of opinion, not on tangible material. The internal audit report was an opinion, not factual material. The grounds for rejecting objections were factually incorrect. Moreover, the consistent treatment of similar transactions as capital gains in previous assessment years by the revenue indicated an absence of a reasonable belief that income had escaped assessment. The Court relied on the principle of consistency in tax treatment when facts are identical year to year, as laid down in Gopal Purohit (supra). Therefore, the notice and the order rejecting objections were set aside.
The High Court held that the ITAT rightly relied upon the assessment and appreciation of material by the Commissioner of Income Tax (Appeals). The Tribunal found that the Assessing Officer had failed to establish the identity, creditworthiness, and genuineness of the transactions as required under Section 68. The Commissioner of Income Tax (Appeals) had detailed the fourteen corporate shareholders and noted that their investments were reflected in their audited accounts. The assessee provided confirmations, balance sheets, and other records demonstrating the financial capacity of the investors. The Court found that the Assessing Officer had not disputed the bank accounts or termed the investors as non-existent or benami. Given the overwhelming evidence of creditworthiness and genuineness of transactions, the findings of fact by the lower authorities did not give rise to a substantial question of law. Therefore, the appeal under Section 260A was not maintainable. The contention that genuineness was not investigated was rejected as the findings of the Commissioner of Income Tax (Appeals) indicated that all three ingredients of Section 68 were satisfied.
The High Court held that the concurrent findings of the Commissioner of Income Tax (Appeals) and the Income Tax Appellate Tribunal did not give rise to substantial questions of law. The Tribunal and the CIT(A) had found that the alleged fictitious deposits were made by the Directors of the society at the relevant time, along with their families and friends, who were identified. This approach was consistent with a previous decision in the case of Shri Mahavir Nagari Sahakari Pat Sanstha. Therefore, the penalty proceedings could not be sustained in the given facts and circumstances. The appeal was dismissed as devoid of merits.
The High Court held that the Tribunal's order directing the refund was justified. The Court found the Assessing Officer's actions of attaching the bank account and withdrawing Rs. 159.84 crores on November 18, 2013, to be illegal and arbitrary, especially since the Assessee had filed an appeal and a stay application with the Tribunal on the same day. The Court emphasized that the Assessing Officer's actions were contrary to the binding decision of the High Court in UTI Mutual Fund vs. ITO and violated the principles of the rule of law. The Court stated that the Tribunal, in its inherent powers, could rectify such illegal and high-handed actions by the Revenue to prevent the assessee from being left without remedy. The Court also clarified that the existence of a pending writ petition or the denial of a stay by the Assessing Officer or CIT(A) did not extinguish the Tribunal's power to consider and grant a stay in an appeal before it. Therefore, the Tribunal was empowered to order the refund to restore the status quo ante. The High Court dismissed the petition filed by the Revenue, but left it open for the Tribunal to pass further orders after hearing the parties, as the appeal was scheduled for final hearing.
The High Court, after hearing both sides, decided that the Tax Appeal need not be kept pending. The Court found that identical controversies regarding contributions to institutions for scientific research and the applicability of Section 40A(2)(a) were involved in other appeals, including Tax Appeal No. 56 of 2011. Following the Supreme Court's order in SLP (C) No. 8590 of 2010 (C.I.T., Bombay V/s Krishna Sahakari Sakhar Karkhana Ltd.), the High Court quashed and set aside the orders of the Tribunal and the Commissioner of Income Tax (Appeals). The case was remitted to the Commissioner of Income Tax (Appeals), Aurangabad, for a fresh decision on merits in accordance with the law, considering the issues of fact and law noted by the High Court. The Court stated that a remand order was necessary because the impugned orders were cryptic, and it could not be satisfied that the Tribunal had performed its duty correctly. The appeal was allowed, adopting the reasoning from Tax Appeal No. 33 of 2009.
The High Court held that the Income Tax Appellate Tribunal (ITAT) did not commit any error of law or perversity in concluding that the purchases from eighteen Non-Resident Indians (NRIs) were legally and properly made. The court found that the assessee had produced relevant documents, including customer receipts and purchase vouchers, to support these transactions. The Tribunal's finding that the assessee was dealing in gold and silver items and had accounted for all purchases was upheld. Consequently, the stock confiscated was considered stock-in-trade, and its confiscation was correctly treated as a business loss. The High Court found that the appeals did not raise any substantial questions of law, as the revenue was seeking a re-appreciation and re-appraisal of facts, which is impermissible. Therefore, the appeals were dismissed.
The High Court held that in the peculiar facts of the case, no income accrued to the assessee, an Association of Persons (AOP). The Tribunal's finding was based on its earlier orders, which established that when no income accrues to the AOP but rather to its individual constituents who undertake contract portions at their own risk and in their individual capacities, the AOP is not liable to be taxed. The High Court found that this view was consistent with the materials on record. Consequently, the Court concluded that no substantial question of law arose for determination. Both appeals filed by the Commissioner of Income Tax were dismissed.
The High Court held that there was no substantial question of law arising for determination in the appeal. It reasoned that while the Appellant argued that the retracted statement under Section 132(4) should be binding, the Income Tax Appellate Tribunal had, in its detailed order, considered all aspects of the matter. The Tribunal had scanned and appreciated the entire material, including instances of plots of land received after the dissolution of a firm and individual heads of income. The Tribunal accepted the assessee's version by applying correct legal principles. The Court distinguished the reliance on Nathoo Lal V. Durga Prasad, noting that the Supreme Court's decision was based on a clear admission in the witness box under Section 18 of the Evidence Act, which is binding and undisputed. In contrast, the admission in the present case was made through a counsel during proceedings and was later retracted. The Court found that the Revenue had offered its counter to the assessee's explanation, and the entire material was considered, meaning no perversity was committed by the Tribunal. Therefore, the appeal was dismissed.
The High Court held that the Settlement Commission did not err in rejecting the petitioner's settlement application for AYs 2007-08 to 2009-10. The Court reasoned that assessment proceedings are considered pending only for those assessment years in which the Assessing Officer still has the power to take action or initiate proceedings under the Act. This power ends with the expiry of the period prescribed under Section 153 of the Act for making an assessment. The Court found that the Special Bench decision in Rescuwear Corporation was not applicable as the question before it was different. The Court agreed with the Gujarat and Kolkata High Courts that an assessment cannot be considered pending if the time for making it has expired, regardless of whether a final assessment order under Section 143(3) was passed. Consequently, the Court upheld the Settlement Commission's order. As a result, proceedings before the Settlement Commission abated for these years under Section 245HA, and the papers were restored to the Assessing Officer. The Court also held that the Assessing Officer was entitled to issue the notices under Section 148, and the period from December 11, 2013, to the date of the judgment would be excluded for computing the limitation period for reassessment.
The High Court held that no substantial question of law arises for determination in the appeal filed by the Commissioner of Income Tax. The Court found that the reasons assigned by both the Commissioner of Income Tax and the Income Tax Appellate Tribunal were based on factual matters, as noted in specific paragraphs (6, 7, 7.1, and 8) of the ITAT's order. Consequently, the High Court concluded that there was no merit in the appeal. The operative direction was to dismiss the appeal. No issues were left undecided.
The High Court held that questions (a) and (b) do not raise any substantial question of law. Regarding question (a), the Court found that Section 55A(a) at the relevant time permitted a reference to the DVO only when the assessee's adopted value was less than the fair market value. In this case, the assessee's declared value of Rs. 35.99 lakhs was significantly higher than the DVO's valuation of Rs. 6.68 lakhs, making the reference under Section 55A(a) unjustified. The Court rejected the revenue's argument that the 2012 amendment to Section 55A(a) was retrospective, noting it was effective from July 1, 2012, and the assessment year was 2006-07. The Court also dismissed the contention based on Section 55A(b)(ii), stating it applies only to cases not covered by Section 55A(a), and that the specific provision of Section 55A(a) governed the situation. The Court further held that the AO could not invoke general powers under Sections 131, 133(6), and 142(2) when a specific provision like Section 55A was available, referencing the Supreme Court's decision in Smt. Amiya Bala Paul v. CIT. For question (b), the Court found that since the reference itself was not permissible, the direction to accept the assessee's valuation was a consequence of the primary finding. Regarding question (c), the Court noted that the Tribunal had merely remanded the issue of the date of acquisition to the AO and that the revenue made no specific submissions on this point. An order of remand, in these facts, does not give rise to a substantial question of law. Consequently, the appeal was dismissed.