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The High Court held that the ITAT was legally justified in not remanding the case back to the assessing officer for fresh assessment because the order of initiation of reassessment was declared void. The Court noted that the limitation period for framing the reassessment order under Section 147/143(3) had lapsed on March 31, 1997, as per Section 153 of the Act. Citing Supreme Court judgments in Popat Bahiru Govardhane v. Land Acquisition Officer and CIT v. U.K. Paints (Overseas) Ltd., the Court emphasized that courts cannot extend the period of limitation on equitable grounds and must enforce statutory provisions. The Court observed that the Revenue could initiate reassessment proceedings in accordance with law if permissible. Consequently, the appeals preferred by the Revenue were dismissed, and the cross-appeals filed by the assessee were allowed. The question of law regarding the AO's order being passed on the dictates of superior authorities was held in favor of the assessee.
The High Court held that the question of whether the assessment order was passed on the dictates of superior authorities is answered in favour of the assessee. The Court emphasized that statutory authorities must function within the four corners of the law and cannot allow their decisions to be influenced by dictation from superiors, as this amounts to surrendering discretion and creates a real danger of bias from the viewpoint of a fair-minded observer. Regarding the second issue, the Court held that since the order of initiation was declared void, the question of remanding the case for fresh assessment did not arise. Furthermore, the Court noted that the limitation period for framing the reassessment order under Section 147/143(3) had lapsed on March 31, 1997, as per Section 153 of the Act. The Court cited Supreme Court decisions in Popat Bahiru Govardhane and CIT v. U.K. Paints (Overseas) Ltd. to support the principle that limitation periods must be strictly applied and that the Revenue can initiate reassessment proceedings in accordance with law if permissible. Consequently, the appeals preferred by the Revenue were dismissed, and the cross-appeals filed by the assessee were allowed.
The High Court held that the writ petition challenging the order under Section 148A(d) and the notice under Section 148 is not maintainable at this intermediate stage. The Court reasoned that the scheme of Section 148A of the Income Tax Act, 1961, introduced by the Finance Act, 2021, provides for an inquiry and an opportunity to the assessee before issuing a notice under Section 148. The consideration at the stage of passing an order under Section 148A(d) is limited to ascertaining the existence of information that suggests income has escaped assessment. A detailed adjudication on the merits or correctness of this information is not contemplated at this stage, as it is to be determined during the reassessment proceedings under Section 147. The Court found that the petitioner's grounds constituted their defense, which could not be examined at the issuance stage of the notice. Since the Assessing Authority had furnished information and recorded a finding that it was a fit case for issuing notice under Section 148, and the petitioner could not demonstrate that the findings were contrary to the material or that the authority had not applied its mind, the writ petition was dismissed. The Court clarified that it had not examined the contentions on merit and that the Assessing Authority should proceed without being influenced by the observations made.
The High Court held that the writ petition, in its current form, was not maintainable. The Court observed that the petitioner was neither the seller nor the purchaser of the land. The petitioner's grievance was that co-owned property was sold by some co-owners, and he had not been paid his share of the sale consideration. The Court opined that if the petitioner had a dispute regarding his share in the property or the sale consideration, he had other remedies available by filing appropriate proceedings before the appropriate forum. Therefore, the writ petition was dismissed. No specific finding was made on the benami transaction aspect as the petition was dismissed on maintainability grounds.
The High Court held that the appeal is dismissed. The primary onus under Section 68 of the Income Tax Act, 1961, lies on the assessee to establish the proof of identity of the creditors, their capacity to advance money, and the genuineness of the transaction. The Court, relying on the Supreme Court's decision in *Principal Commissioner of Income Tax (Central-1) vs. NRA Iron and Steel Private Limited*, reiterated that the assessee must satisfy the AO on these three aspects. In this case, the intermediary companies, M/s Eagle Commotrade Pvt. Ltd. and M/s Krishnakali Distributors Pvt Ltd, were found to be non-existent. Therefore, the assessee failed to discharge the initial burden of proof. The submission that Rashi Steels was the ultimate beneficiary did not impress the Court, as the practice of converting unaccounted money through share capital requires careful scrutiny, especially when the intermediary entities are found to be fake. The Court found that no question of law arose for consideration.
The High Court held that the appeal is not maintainable. The reasoning was based on the submission that the tax amount involved in the appeal was below the monetary limit fixed for preferring an appeal. The Court specifically referred to Circular No. 17/2019 and Section 260-A of the Income Tax Act, 1961, stating that if the tax effect is below Rs. 10 lakhs (though the circular mentions Rs. 1 crore, the judgment mentions Rs. 10 lakhs in point 4, indicating a potential discrepancy or specific applicability), the appeal is liable to be dismissed. The operative direction was to dismiss the appeal as not maintainable. No issues were left undecided.
The High Court held that the mandate of Section 153D of the Income Tax Act, 1961, requiring prior approval of the Joint Commissioner, was complied with as approval was obtained. The Court found that the approval order (Annexure-4) indicated the Joint Commissioner was satisfied based on the documents on record that the approval was justified. It was not to be presumed that there was no application of mind, as the approval need not be a detailed assessment order. The Court invoked the presumption under Section 114 of the Evidence Act, assuming due diligence was followed in an official act. Furthermore, the Court noted that the ITAT had remanded the case back to the Assessing Officer for fresh adjudication and granted the assessee liberty to raise all issues and furnish necessary evidence. Therefore, no prejudice was caused to the assessee, and the ITAT had advanced the rules of natural justice. Consequently, no substantial question of law arose for consideration.
The High Court held that the mandate of Section 153(D) of the Income Tax Act, 1961, was complied with as prior approval of the Joint Commissioner was obtained. The approval order (Annexure - 4) reflected the Joint Commissioner's satisfaction based on the documents on record, indicating that the approval was justified. The Court stated that it cannot be presumed that there was no application of mind, as the approval need not be a detailed assessment order. Relying on the presumption under Section 114 of the Evidence Act, the Court assumed that the official act was done in accordance with official procedure, implying due diligence. Furthermore, the Court noted that the ITAT had remanded the case back to the Assessing Officer for fresh adjudication and granted the assessee liberty to raise all issues and furnish necessary information. Since the assessee's right to raise grounds was reserved and no prejudice was caused, the High Court found no substantial question of law arising for consideration. The appeal was disposed of without any observation on merits.
The High Court noted that the Assessment Officer is empowered to consider prayers for stay of demand notice or recovery of disputed tax amounts upon payment of 20% of the disputed demand, as per the CBDT Circular dated July 31, 2017. If the assessee remains aggrieved, they have the liberty to approach the jurisdictional administrative Principal Commissioner or Commissioner for a review of the Assessing Officer's decision. The Court found that sufficient safeguards exist for the assessee to seek a stay of recovery. Consequently, the writ petition was disposed of by granting liberty to the petitioner to move an application for stay and for the release of the frozen bank account before the Assessment Officer within 15 days. The Assessment Officer was directed to decide the stay application within four weeks of its submission. The Court also expected the appellate authority to decide the petitioner's pending appeal within eight weeks from the date of the order.
The High Court held that sufficient cause was shown by Hitesh Agrawal, the new Karta, for condoning the delay in filing the appeal before the ITAT. The Court considered the continuous and frequent medical treatment of the original Karta, Murli Kumar Agrawal, his hospitalization, and eventual death, which significantly impacted the ability to file the appeal within the stipulated time. The Court also noted that after the death of the original Karta, the new Karta, Hitesh Kumar Agrawal, resumed business activities and then filed the appeal. The Court found this sequence of events to be reasonable and logical. Therefore, the question of law was answered in favor of the appellant. The order of the ITAT dated 18.10.2023 was set aside, and the appeal was remanded back to the ITAT to be decided afresh on its merits. No issue was expressly left undecided.
The High Court noted that the respondents were ready to provide the petitioner with an opportunity of hearing. Consequently, the Court held that the impugned order dated September 20, 2023, had lost its significance, rendering further adjudication on the petition unnecessary at that stage. The Court directed the respondents to decide the petitioner's case after affording him an opportunity of hearing, without being influenced by any prior observations made by the transferring authority or by the Court itself. The petition was disposed of with this observation. No specific finding was given on the merits of the transfer order itself, as the matter was resolved procedurally.
The High Court held that the ACIT and PCIT had exercised their discretionary power judiciously. The ACIT granted an installment facility of Rs. 30,73,524/- per month, and the PCIT granted a reduced installment facility of Rs. 13,85,000/- per month for 20 months. The court found that these orders were not arbitrary or suffering from non-application of mind. The judgment noted that the petitioner had not filed an application for stay before the CIT(Appeals), who is empowered under Section 246 to waive the pre-deposit. The court also referred to the Supreme Court's decision in Principal Commissioner of Income Tax 5 and Others vs L.G. Electronics {(2018) 18 SCC 447}, clarifying that administrative circulars do not fetter the Commissioner's discretion to grant deposit orders of a lesser amount. The court emphasized that in matters of public revenue, interim orders should not be granted lightly, and the balance of convenience must favor the interim order, with no prejudice to public interest, citing Commissioner of Central Excise vs. Dunlop India Limited {(1985) 1 SCC 260}. The discretion exercised by the authorities was deemed proper and not arbitrary, warranting no interference under Article 226. The operative direction was to dismiss the writ petition.
The High Court, after hearing counsel for the parties and perusing the record, allowed the review petition. The Court found merit in the petitioners' submission that there was an apparent mistake in its previous order. Consequently, paragraph 5 of the order dated December 5, 2023, was deleted and modified to reflect that the Revenue authorities had already filed an application before the Settlement Commission. Similarly, paragraph 6 was deleted and modified to state that the notice issued by the Income Tax Officer had lost its efficacy because the Revenue had already moved an application under Section 245D(6) and 245D(7) of the Income Tax Act. Paragraph 7 was also deleted and replaced to reiterate that the Revenue had filed an application before the Settlement Commission under the aforementioned sections. The rest of the High Court's previous order was to remain intact. The review petition was accordingly disposed of.
The High Court allowed the Misc. Civil Case. It ordered that in the order dated 11.12.2023 in Writ Petition (T) No. 4639/2022, the phrase 'to avail the remedy available under the Chhattisgarh Settlement of Arrears of Tax, Interest and Penalty Act, 2023 for settlement' shall be read as 'to prefer an appeal under the provisions of Income Tax Act'. The Court directed that the rest of the order passed previously shall remain intact. The modification was made to accurately reflect the applicant's intended course of action under the Income Tax Act, 1961.
The High Court, after hearing the counsel for the parties and perusing the record, allowed the review petition. The Court found merit in the Revenue's submission regarding the mistaken recording of notice withdrawal. Consequently, the Court ordered the deletion and modification of specific paragraphs in its previous order dated December 5, 2023. Paragraph 5 was deleted and replaced to reflect that the Revenue had already filed an application before the Settlement Commission. Similarly, Paragraph 6 was modified to state that the notice issued by the Income Tax Officer had lost its efficacy because the Revenue had moved an application under Section 245D(6) and 245D(7) of the Income Tax Act before the Settlement Commission. Paragraph 7 was also deleted and replaced with the same clarification. The rest of the previous order was to remain intact. The operative direction was to dispose of the review petition accordingly.
The High Court held that since the respondents are ready to provide an opportunity of hearing to the petitioner, the impugned order dated September 20, 2023, transferring the petitioner's case, has lost its significance at this stage. Therefore, nothing further requires adjudication in the writ petition. The respondents are directed to decide the case of the petitioner after affording them an opportunity of hearing, without being influenced by any observations made by the authority while passing the earlier order or by the High Court. The petition was disposed of with this observation.