Chhattisgarh High Court Judgments — 2016

The High Court held that it could not re-examine the issue as it had been decided by a Bench of coordinate jurisdiction in a previous case, CIT v. Godavari Power & Ispat Ltd. (Tax Case No. 31 of 2012, 34 of 2012 and Tax Case No. 32 of 2012 dated 02.08.2013). The Court stated that sitting in coordinate jurisdiction, there was no occasion to arrive at a different determination. The fact that a Special Leave Petition (SLP) might have been preferred against the earlier order, without any interim order, did not persuade the Court to entertain the present appeal. Therefore, the appeal was disposed of in terms of the order dated 02.08.2013. The specific finding of the ITAT on the deduction under Section 80IA is not detailed, but the High Court's decision is based on precedent from a coordinate bench.

The High Court held that it was bound by the decision of a coordinate bench of the same High Court in the case of CIT v. Godawari Power & Ispat Ltd. (Tax Case No. 31 of 2012, 34 of 2012 and Tax Case No. 32 of 2012 dated 02.08.2013). The Court stated that sitting in coordinate jurisdiction, there was no occasion to re-examine the matter or arrive at a different determination. The fact that a Special Leave Petition might have been preferred against the prior decision, without any interim order, did not persuade the Court to entertain the present appeal. Therefore, the appeal was disposed of in terms of the order dated 02.08.2013. The specific findings of the prior order are not detailed in this judgment, but the ratio is that coordinate benches are bound by each other's decisions.

The High Court dismissed all the tax appeals at the admission stage, holding that no substantial question of law arises. The Court found that the Assessing Officer's order was a non-speaking order, failing to decide crucial questions regarding the source of funds for the shell companies. The Court agreed with the Commissioner of Income Tax that the Assessing Officer's acceptance of the shell companies' declared income was erroneous and prejudicial to the interest of the revenue. The Court noted the startling facts, including the discovery of 232 bank passbooks belonging to individuals, all pertaining to only two bank branches, and the fact that many shell companies had their registered offices with the Chartered Accountant. The Court concluded that there was ample material to suggest potential benami transactions and that an inquiry was necessary. Therefore, the Commissioner was justified in issuing the notice under Section 263 and directing the Assessing Officer to pass a fresh order after considering all materials. The Court emphasized that truth must be found out and that the shell companies would have an opportunity to present their case before the Assessing Officer.

The High Court held that no substantial question of law arises from the orders passed by the revenue authorities, justifying the dismissal of the appeals at the admission stage. The Court found that the Assessing Officer's order was a non-speaking order, failing to decide crucial questions regarding the source of funds for the shell companies. The Settlement Commission's observation that the investment of Rs. 40.48 crores from shell companies could not be fully explained further supported the need for inquiry. The High Court agreed with the Principal Commissioner that the Assessing Officer's acceptance of NIL income was erroneous and prejudicial to the revenue, given the startling facts like the discovery of numerous bank passbooks with the Chartered Accountant and the identical addresses of the shell companies. The Court concluded that an inquiry was required to ascertain the truth behind these transactions, and therefore, no question of law arose for consideration. The appeals were dismissed in limine.

The High Court dismissed all the tax appeals at the admission stage, holding that no substantial question of law arises. The Court found that the Assessing Officer's order was a non-speaking order, failing to decide crucial questions regarding the source of funds for the shell companies. The Court agreed with the Commissioner of Income Tax that the Assessing Officer's acceptance of the shell companies' declared income was erroneous and prejudicial to the interest of the revenue. The Court noted the startling facts, including the discovery of 232 bank passbooks belonging to individuals, all pertaining to only two bank branches, and the fact that many shell companies had their registered offices with the Chartered Accountant. The Court concluded that there was ample material to suggest potential benami transactions and that an inquiry was necessary. Therefore, the Commissioner was justified in issuing the notice under Section 263 and directing the Assessing Officer to pass a fresh order after considering all materials. The Court emphasized that truth must be found out and that the shell companies would have an opportunity to present their case before the Assessing Officer.

The High Court dismissed all the tax appeals at the admission stage, holding that no substantial question of law arises. The Court found that the Assessing Officer's order was a non-speaking order, failing to decide crucial questions regarding the source of funds for the shell companies. The Court agreed with the Commissioner of Income Tax that the Assessing Officer's acceptance of the shell companies' declared income was erroneous and prejudicial to the interest of the revenue. The Court noted the startling facts, including the discovery of 232 bank passbooks belonging to individuals, all pertaining to only two bank branches, and the fact that many shell companies had their registered offices with the Chartered Accountant. The Court concluded that there was ample material to suggest potential benami transactions and that an inquiry was necessary. Therefore, the Commissioner was justified in issuing the notice under Section 263 and directing the Assessing Officer to pass a fresh order after considering all materials. The Court emphasized that truth must be found out and that the shell companies would have an opportunity to present their case before the Assessing Officer.

The High Court dismissed all the tax appeals at the admission stage, holding that no substantial question of law arises. The Court found that the Assessing Officer's order was a non-speaking order, failing to decide crucial questions regarding the source of funds for the shell companies. The Court agreed with the Commissioner of Income Tax that the Assessing Officer's acceptance of the shell companies' declared income was erroneous and prejudicial to the interest of the revenue. The Court noted the startling facts, including the discovery of 232 bank passbooks belonging to individuals, all pertaining to only two bank branches, and the fact that many shell companies had their registered offices with the Chartered Accountant. The Court concluded that there was ample material to suggest potential benami transactions and that an inquiry was necessary. Therefore, the Commissioner was justified in issuing the notice under Section 263 and directing the Assessing Officer to pass a fresh order after considering all materials. The Court emphasized that truth must be found out and that the shell companies would have an opportunity to present their case before the Assessing Officer.

The High Court dismissed all the tax appeals at the admission stage, holding that no substantial question of law arises. The Court found that the Assessing Officer's order was a non-speaking order, failing to decide crucial questions regarding the source of funds for the shell companies. The Court agreed with the Commissioner of Income Tax that the Assessing Officer's acceptance of the shell companies' declared income was erroneous and prejudicial to the interest of the revenue. The Court noted the startling facts, including the discovery of 232 bank passbooks belonging to individuals, all pertaining to only two bank branches, and the fact that many shell companies had their registered offices with the Chartered Accountant. The Court concluded that there was ample material to suggest potential benami transactions and that an inquiry was necessary. Therefore, the Commissioner was justified in issuing the notice under Section 263 and directing the Assessing Officer to pass a fresh order after considering all materials. The Court emphasized that truth must be found out and that the shell companies would have an opportunity to present their case before the Assessing Officer.

The High Court dismissed all the tax appeals at the admission stage, holding that no substantial question of law arises. The Court found that the Assessing Officer's order was a non-speaking order, failing to decide crucial questions regarding the source of funds for the shell companies. The Court agreed with the Commissioner of Income Tax that the Assessing Officer's acceptance of the shell companies' declared income was erroneous and prejudicial to the interest of the revenue. The Court noted the startling facts, including the discovery of 232 bank passbooks belonging to individuals, all pertaining to only two bank branches, and the fact that many shell companies had their registered offices with the Chartered Accountant. The Court concluded that there was ample material to suggest potential benami transactions and that an inquiry was necessary. Therefore, the Commissioner was justified in issuing the notice under Section 263 and directing the Assessing Officer to pass a fresh order after considering all materials. The Court emphasized that truth must be found out and that the shell companies would have an opportunity to present their case before the Assessing Officer.

The High Court dismissed all the tax appeals at the admission stage, holding that no substantial question of law arises. The Court found that the Assessing Officer's order was a non-speaking order, failing to decide crucial questions regarding the source of funds for the shell companies. The Court agreed with the Commissioner of Income Tax that the Assessing Officer's acceptance of the shell companies' declared income was erroneous and prejudicial to the interest of the revenue. The Court noted the startling facts, including the discovery of 232 bank passbooks belonging to individuals, all pertaining to only two bank branches, and the fact that many shell companies had their registered offices with the Chartered Accountant. The Court concluded that there was ample material to suggest potential benami transactions and that an inquiry was necessary. Therefore, the Commissioner was justified in issuing the notice under Section 263 and directing the Assessing Officer to pass a fresh order after considering all materials. The Court emphasized that truth must be found out and that the shell companies would have an opportunity to present their case before the Assessing Officer.

The High Court disposed of the writ petition. It directed the Commissioner of Income Tax (Appeals) to decide the pending appeal of the petitioner within a further period of four weeks. The Court further observed that until the appeal is decided, the respondents shall not take any coercive steps against the petitioner for the recovery of the disputed demand, keeping the demand notice in abeyance. The reasoning was based on the submissions of both parties, particularly the revenue's assurance not to take coercive steps and the petitioner's pending appeal. The principle established is that in such circumstances, the appellate authority should expedite the decision of the appeal, and coercive recovery should be deferred.

The High Court disposed of the writ petition. It directed the Commissioner of Income Tax (Appeals) (respondent No. 1) to decide the petitioner's pending appeal within a further period of four weeks. The Court further observed that until the decision on the appeal, the respondents (including the assessing officer) shall not take any coercive steps against the petitioner for the recovery of the disputed demand, keeping the demand notice in abeyance. The Court did not decide on the merits of the assessment itself but focused on the procedural aspect of expediting the appeal and staying recovery. The ratio decidendi is that in cases where an appeal is pending against a high-pitched assessment, the appellate authority should be directed to decide the appeal expeditiously, and coercive recovery should be stayed pending that decision.

The High Court held that the appeal raised no substantial question of law for determination under Section 260A of the Income Tax Act, 1961. The Tribunal's interpretation of Section 40A(3) and Rule 6DD(g) was supported by judicial precedents and had not been assailed by the revenue. The Tribunal had correctly noted that the payments were made to identified sellers under registered deeds, and the assessee's contention that villagers insisted on cash payments due to lack of bank accounts was not disputed. The Tribunal's finding that the cash payment was out of business compulsion and not optional, and that the conditions prescribed in Rule 6DD were fulfilled, was accepted. The Court also quoted a CBDT circular emphasizing that appeals should not be filed merely because the tax effect exceeds monetary limits, but should be decided on merits. Consequently, the appeal was dismissed as having no merit.

The High Court held that it was bound by the decision of a coordinate bench in CIT v. Godavari Power and Ispat Ltd. (Tax Case No. 31 of 2012, 34 of 2012 and Tax Case No. 32 of 2012 dated 2.8.2013). As the present appeal was before a coordinate bench, there was no occasion to re-examine the matter or arrive at a different determination. The fact that a Special Leave Petition might have been preferred against the cited order, without any interim order, did not persuade the Court to entertain the present appeal. Therefore, the appeal was disposed of in terms of the order dated 2.8.2013. The specific findings on the disallowance of deduction under Section 80IA and the rate for sold power are not elaborated upon, as the decision rests on precedent. The operative direction was to dispose of the appeal in terms of the earlier order.