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The High Court held that the tax appeal is not pressed by the Revenue in view of the low tax effect, as per Circular No. 17/2019 dated August 8, 2019. The circular specifies monetary limits for appeals, and the present appeal falls below the threshold for High Court appeals (Rs. 1,00,00,000). Consequently, the appeal is disposed of accordingly. The court reserved liberty for the Revenue to revive the tax appeal in case of any difficulty. No specific issue was decided on merits.
The High Court held that the Tax Appeal was not pressed by the Revenue in view of the low tax effect, as per Circular No. 17/2019 dated August 8, 2019. The Court noted the revised monetary limits for appeals before the High Court as Rs. 1,00,00,000. Since the appeal was not pressed, the Court disposed of the appeal accordingly. The reasoning was based on the administrative policy decision of the Central Board of Direct Taxes to streamline litigation and focus on cases with significant tax implications. The Court explicitly reserved the liberty for the Revenue to revive the tax appeal in case of any difficulty. No specific issue regarding the merits of the original assessment or the order under challenge was decided.
The High Court of Gujarat at Ahmedabad held that the Tax Appeal was not pressed by the Revenue in view of the low tax effect, as per Circular No. 17/2019 dated August 8, 2019. The Court noted the revised monetary limits for appeals before the High Court, which is Rs. 1,00,00,000. Consequently, the appeal was disposed of accordingly. The Court also reserved the liberty for the Revenue to revive the tax appeal in case of any difficulty. No specific finding was given on the merits of the original dispute, as the appeal was not pressed.
The High Court held that the tax appeal is not pressed by the Revenue due to the low tax effect, in accordance with Circular No. 17/2019 dated August 8, 2019. The circular specifies that appeals before the High Court should have a monetary limit of Rs. 1,00,00,000. The court observed that the present appeal falls within the category of low tax effect as per the new policy. Consequently, the appeal was disposed of. The court also granted liberty to the Revenue to revive the tax appeal in case of any difficulty. No specific finding was made on the merits of the original dispute, as the appeal was withdrawn by the Revenue on procedural grounds.
The High Court held that the ITAT was justified in dismissing the Revenue's appeal. The Tribunal had relied on its co-ordinate bench's decision in the assessee's own case, which in turn followed the Gujarat High Court's decision in General Motors India Pvt. Ltd. vs. DCIT. The Tribunal also noted that the Gujarat High Court in CIT vs. Gujarat Themis Biosyn Ltd., after considering General Motors India Pvt. Ltd., held that unabsorbed depreciation concerning impugned assessment years could be set off in subsequent years without any time limit. The High Court further noted that the Revenue's appeal against the ITAT's order in the assessee's own case (Tax Appeal No.1042 of 2018) was dismissed by the High Court itself. Therefore, no case was made out for interference, and the appeal was dismissed.
The High Court held that both tax appeals are disposed of as not pressed. The reasoning is based on the revenue's decision not to press the appeals in light of CBDT Circular No. 17/2019, which sets revised monetary limits for appeals. The circular establishes a monetary limit of Rs. 1,00,00,000 for appeals before the High Court. Consequently, the appeals were dismissed on this ground. The court also reserved the liberty for the Revenue to revive the tax appeal in case of any difficulty. No specific issue was left undecided; the appeals were disposed of based on the revenue's submission.
The High Court held that the appeal is not pressed in view of the low tax effect, as per Circular No. 17/2019. The court noted the new policy reflected in the circular, which establishes monetary limits for appeals. For appeals before the High Court, the monetary limit is Rs. 1,00,00,000. Consequently, the appeal was disposed of accordingly. The court reserved the liberty for the Revenue to revive the tax appeal in case of any difficulty. No specific finding was made on the merits of the original dispute, as the appeal was withdrawn by the appellant.
The High Court held that the appeal was not pressed by the Revenue due to the low tax effect, in accordance with Circular No. 17/2019. The circular establishes monetary limits for appeals, with appeals before the High Court having a monetary limit of Rs. 1,00,00,000. Since the tax effect in this case was below this threshold, the Revenue chose not to press the appeal. The court disposed of the appeal accordingly. The court also reserved the liberty for the Revenue to revive the tax appeal in case of any difficulty. No specific findings were made on the merits of the original dispute.
The High Court held that all the captioned tax appeals were not pressed by the Revenue in view of the low tax effect, as per Circular No. 17/2019 dated August 8, 2019. The Court noted the revised monetary limits for appeals. Consequently, all the appeals were disposed of accordingly. The Court reserved liberty for the Revenue to revive the tax appeals in case of any difficulty. The specific tax effect or the assessment years were not recorded in the judgment. No specific issue was left undecided, as the appeals were disposed of based on the Revenue's decision not to press them.
The High Court held that the tax appeal is not pressed by the Revenue in view of the low tax effect, as per Circular No. 17/2019 dated August 8, 2019. The reasoning is based on the revised monetary limits for filing appeals, where the appeal falls below the threshold for High Court appeals. The ratio decidendi is that appeals with a low tax effect, as defined by CBDT circulars, should be disposed of without a detailed examination of merits. The operative direction is that the appeal is disposed of accordingly. The Court also reserved liberty for the Revenue to revive the tax appeal in case of any difficulty.
The High Court held that the appeal is not pressed in view of the low tax effect, as per Circular No. 17/2019 dated August 8, 2019. The Court noted the revised monetary limits for appeals, including Rs. 1,00,00,000 for appeals before the High Court. Consequently, the appeal was disposed of accordingly. The Court also granted liberty to the Revenue to revive the tax appeal in case of any difficulty. The specific tax effect or the original assessment year(s) were not recorded in the judgment.
The High Court held that all the captioned tax appeals were not pressed by the Revenue in view of the low tax effect, as per Circular No. 17/2019 dated August 8, 2019. The Court noted the revised monetary limits for appeals. Consequently, all the appeals were disposed of accordingly. The Court reserved liberty for the Revenue to revive the tax appeals in case of any difficulty. The specific tax effect or the assessment years were not recorded in the judgment. No specific issue was left undecided, as the appeals were disposed of based on the Revenue's decision not to press them.
The High Court dismissed the appeal filed by the Insurance Company and the cross-objection filed by the claimant. Regarding the contributory negligence, the Court found that the Tribunal's assessment of 25% negligence on the claimant was not wrong, illegal, or perverse, especially considering the claimant's admission of a head-on collision on a sufficiently wide road. The claimant's prayer to remove this liability was rejected. Concerning the driver's license, the Court relied on the Supreme Court's judgment in Jagdish Kumar Sood v. United India Insurance Company Limited and ors. (2018) 3 SCC 697, which referred to Mukund Dewangan v. Oriental Insurance Company Limited (2017) 14 SCC 663. The Court held that a license to drive a 'light motor vehicle' includes a transport vehicle if its gross vehicle weight does not exceed 7500 kg, and no separate endorsement is required. The judgment noted that an endorsement of 'T.V.A.' was found on the driver's license, authorizing him to drive a transport vehicle. Therefore, the appellant's argument regarding the invalidity of the license was not accepted. The Court also found no error in the Tribunal's assessment of the claimant's income and disability, noting that the 15% permanent partial disability for the body as a whole was agreed upon by both parties. The appeal and cross-objection were dismissed.
The High Court dismissed the appeal filed by the New India Assurance Co. Ltd. and the cross-objection filed by the claimant. Regarding the contributory negligence, the Court found that the Tribunal's assessment of 25% negligence on the claimant's part was not wrong, illegal, or perverse, especially considering the claimant's admission about the road width and the head-on collision. The cross-objection seeking to remove this liability was rejected. Concerning the driving license, the Court relied on the Supreme Court's judgment in Jagdish Kumar Sood v. United India Insurance Company Limited, which, referring to Mukund Dewangan v. Oriental Insurance Company Limited, held that a license to drive a light motor vehicle is sufficient to drive a transport vehicle of a certain gross weight, and no separate endorsement is required. The Court noted that the driver had an endorsement for driving a transport vehicle (T.V.A.) on his license, thus rejecting the appellant's argument. The Court also found no error in the Tribunal's assessment of compensation, considering the income tax returns, income certificates, medical treatment papers, and the agreed-upon 15% permanent partial disability for the body as a whole. Therefore, the appeal and cross-objection were dismissed.
The High Court held that it was in agreement with the view adopted by the Debts Recovery Appellate Tribunal (DRAT) and found no legal infirmity in the impugned order. The Court noted that the Debts Recovery Tribunal (DRT) had held that the proposed issues III to XII were not purely legal issues but involved mixed questions of law and fact. Consequently, the DRT concluded that such issues could not be treated as preliminary issues and observed that the petitioners had essentially put their entire defence into the preliminary issues. The DRAT had also held that even under the Code of Civil Procedure, only issues relating to jurisdiction and the issue relating to the bar of suit are to be decided as preliminary issues, and the objections raised in the present case did not pertain to these two points. The DRAT found all the issues raised by the petitioners to be mixed questions of law and facts, not attracting jurisdiction or bar under any statute. The High Court concurred with this reasoning, dismissing the petition.
The High Court held that the income-tax return for Assessment Year 2009-2010, showing a gross income of Rs. 1,90,276/- (net Rs. 1,88,276/- per annum), accurately reflects the deceased's total income, including overtime and special duties, and should be the basis for calculation, rather than just the pay-slips. This resulted in a monthly income of Rs. 15,690/-. Applying a 30% increase for prospective income and a multiplier of 14, the compensation for loss of dependency was recalculated. The court agreed with the claimants that compensation under conventional heads should be enhanced to Rs. 70,000/- as per the Pranay Sethi judgment. However, the court upheld the Tribunal's finding of 10% negligence on the part of the deceased, finding no error in the assessment based on the panchnama. The interest rate of 7.5% was also deemed appropriate. The appeal was partly allowed, with an additional amount of Rs. 3,11,508/- awarded with 7.5% interest.
The High Court held that it should not interfere in the matter and found no palpable error or gross illegality in the issuance of the Warrant of Authorization under Section 132A(1) of the Income Tax Act. The Court noted the principles deducible from various Supreme Court decisions regarding the formation of belief by an authorized official, emphasizing that the authority must have information leading to a reasonable belief that the person is in possession of undisclosed income or property, and there must be an application of mind to the material. The Court found the respondent's affidavit-in-reply convincing, highlighting the writ applicant's inconsistent statements and failure to provide satisfactory documentation regarding the cash. The applicant's counsel emphasized the need to pay farmers and the applicant's goodwill, but the Court was not inclined to delve into goodwill. The Court inquired about the applicant's willingness to furnish a bank guarantee for the seized amount, which the applicant found difficult. Consequently, the Court rejected the writ application.
The High Court, following a coordinate bench's decision, held that the writ applications were maintainable. Regarding the applicability of amended Section 153C, it was held that the amended provisions, effective from June 1, 2015, were prospective and not applicable to searches initiated before that date, as applying them retrospectively would affect substantive rights. On the issue of limitation, the Court found that if the statute provides an alternative period of limitation, the notices are not barred merely because the initial period has elapsed. Critically, concerning the relevant assessment years under Section 153A, the Court held that the six assessment years preceding the assessment year relevant to the previous year of search are the only ones that can be covered. For a search on September 4, 2013, the relevant AY was 2014-15, making the six preceding AYs 2013-14 to 2008-09. For searches on December 4, 2014, and March 13, 2015, the relevant AY was 2015-16, making the six preceding AYs 2014-15 to 2009-10. Notices issued for assessment years beyond these six years were held to be without jurisdiction. Consequently, the impugned notices and any assessment orders passed under Section 153C were quashed and set aside.
The High Court held that there was no total non-application of mind by the Assessing Officer (AO) while recording the reasons for reopening the assessment. The court found that the AO's conclusion was not merely based on observations and information from the Investigation Wing but indicated an application of mind. The court examined the AO's belief to the limited extent of determining whether sufficient material was available to form a reasonable belief and whether a live link existed between the material and the escaped income. The court found that the AO had not initiated reassessment proceedings based on vague or unspecific information without forming his own belief. Therefore, the court concluded that no case was made out for interference with the reopening proceedings. The writ application was rejected.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, dated March 28, 2018, is invalid and liable to be quashed. The Court reasoned that issuing a notice to a deceased person is a fundamental defect, akin to passing a decree against a dead person, rendering it a nullity. Unlike cases where a legal heir actively participates in the proceedings after receiving a notice (even if issued to a deceased person) and thereby submits to the Assessing Officer's jurisdiction, in this case, the petitioner merely informed the respondent about the death and objected to the notice. The Court distinguished the present case from the precedents cited by the revenue ('Travels', 'Smt. Kaushalyabai', 'Sri Durga Enterprises'), noting that in those cases, there was either participation in proceedings or the defect was a mere irregularity curable under Section 292B, which is not applicable to a notice issued to a dead person. The Court concluded that the proceedings were not tenable in law. The impugned notice was quashed, and all consequential proceedings were terminated.
The High Court held that the Revenue had accepted the assessee's entitlement to the refund and acknowledged the delay. The Court referred to its decision in Nima Specific Family Trust vs. Assistant Commissioner of Income Tax, which discussed the scope of Section 244A of the Act. The Court also analyzed Supreme Court judgments in Sandvik Asia Limited and Gujarat Flourochemicals Limited concerning compensation for delayed refunds and interest on interest. The Court concluded that statutory provisions like Section 244A govern the payment of interest on delayed refunds, and no further direction for interest beyond statutory prescriptions can be made. The Court directed the respondent to release the refund for AY 2004-05 in accordance with Section 244A(1) of the Act within six weeks from the receipt of the order. The Court expressed hope that the assessee would not have to approach the court again.
The High Court held that the findings of fact recorded by the ITAT were not perverse or contrary to the evidence on record. The Court noted that the ITAT considered voluminous documentary evidence, including email correspondence, indicating the rendition of services. The Tribunal was correct in its view that the assessee is the best judge of whether services are required, and such decisions should be left to the commercial wisdom of the assessee. The crucial aspect is whether the services were rendered and if the cost allocation was fair and reasonable. The rendition of services was not disputed. The Court found that the ITAT had well-discussed the issue of Arm's Length Price (ALP) in respect of management fees. The Court concluded that the appeal filed by the Revenue fails and is dismissed. The substantial questions of law were answered in the affirmative, in favour of the assessee and against the Revenue.
The High Court, following a coordinate bench's decision, held that the writ applications were maintainable. Regarding the applicability of amended Section 153C, the court affirmed that the amended provisions, effective from June 1, 2015, were prospective and not applicable to searches conducted prior to that date, as applying them retrospectively would affect substantive rights. On the issue of limitation, the court found that the notices were not barred if an alternative period of limitation was provided by the statute. Crucially, concerning the relevant assessment years under Section 153A, the court held that the six assessment years preceding the assessment year relevant to the previous year of search were the only ones that could be covered. For searches conducted on September 4, 2013, the relevant AY was 2014-15, making AYs 2013-14 to 2008-09 the covered period. For searches on December 4, 2014, and March 13, 2015, the relevant AY was 2015-16, covering AYs 2014-15 to 2009-10. Notices issued for assessment years beyond these six years were deemed to be without jurisdiction. Consequently, the impugned notices and any consequent assessment orders were quashed and set aside.
The High Court held that the substantial questions of law proposed by the Revenue were no longer debatable. For questions 1 and 3, the Court referred to its prior decision in Principal Commissioner of Income Tax vs. M/s. Gujarat Narmada Valley Fertilizer and Chemicals Ltd. in Tax Appeal No. 1360 of 2018. For question 2, the Court referred to its decision in Principal Commissioner of Income Tax vs. M/s. Gujarat Narmada Valley Fertilizer and Chemicals Ltd. in Tax Appeal No. 146 of 2019. As none of the proposed questions were considered debatable, the Tax Appeal was dismissed. The specific reasoning for each of the ITAT's deletions is not elaborated upon in this judgment, as the High Court relied on its previous pronouncements on similar issues involving the same assessee.
The High Court held that both questions of law raised by the Revenue were no longer res integra. For the first issue concerning unabsorbed depreciation, the Court relied on its prior decision in General Motors India Private Limited Vs. Deputy Commissioner of Income Tax reported in 354 ITR 244. For the second issue regarding the fresh claim of business expenses, the Court referred to its decision in Commissioner of Income-tax Vs. Mitesh Implex reported in 367 ITR 85. As both proposed questions of law were squarely covered by these precedents, the High Court found no merit in the appeal. The appeal was dismissed, and consequently, the connected tax appeal was also dismissed.
The High Court held that the first question of law, concerning the carry forward of unabsorbed depreciation, was squarely covered by its own previous decision in the case of General Motors India Private Limited Vs. Deputy Commissioner of Income-tax reported in 354 ITR 244. Regarding the second question, concerning the claim of deferred revenue expenditure, the revenue's counsel pointed to an observation in the order of the Commissioner of Income-tax (Appeals) which stated that the ground for allowing 1/10th of amortized expenses for AY 2008-09 to 2012-13 would stand dismissed. In light of this, the revenue's counsel conceded that the second proposed question would not survive. Consequently, the appeal was dismissed.
The High Court held that both questions of law raised by the Revenue were no longer res integra. For the first issue concerning the carry forward of unabsorbed depreciation, the Court relied on its prior decision in the case of General Motors India Private Limited Vs. Deputy Commissioner of Income-Tax, reported in 354 ITR 244. For the second issue regarding the allowance of fresh business expenses, the Court cited its judgment in Commissioner of Income-tax Vs. Mitesh Implex, reported in 367 ITR 85. As both proposed questions of law were squarely covered by these precedents, the Court found no merit in the appeal. The operative direction was to dismiss the appeal.
The Gujarat High Court held that the subject application, filed by Vodafone India Services Private Limited (VISPL) on May 18, 2017, under Section 127(2) of the Income Tax Act, 1961, for the transfer of its tax assessment jurisdiction from Ahmedabad to Mumbai, had been pending for an inordinate period of nearly two years. The Court noted the multiple reminders filed by the assessee. Consequently, the Court directed the Principal Commissioner of Income Tax – 4, Ahmedabad (Respondent No.2), to immediately consider the said application and pass an appropriate speaking order in accordance with the law, after providing a hearing to the writ-applicant. This exercise was to be completed within a period of four weeks from the date of receipt of the order. The writ-application was disposed of with this direction.
The High Court allowed the petition. It held that the District Education Officer (DEO) had disregarded previous High Court directions to process the petitioner's pension by treating his service notionally. The Division Bench, in the LPA, had already affirmed this notional service concept, stating that the objection based on Rule 47 and 48 of the Gujarat Civil Services (Pension Rules, 2002) was devoid of merit when service was treated notionally. The court noted that the DEO had subsequently filed an affidavit confirming the approval and sanction of the petitioner's pension, with an amount of Rs. 13,04,826/- sanctioned. Therefore, the impugned orders of the DEO were set aside, and the petitioner was declared entitled to receive pension. Any remaining unpaid amount was to be paid with arrears within three weeks, carrying interest at 8% from the LPA order date (16.4.2018) if not paid.
The High Court held that while the petitioner is a bonafide purchaser, the respondent authority cannot sell the property without obtaining a declaration from the civil court that the transaction of purchase by the petitioner was fraudulent and intended to defraud the State revenue. The Court applied the ratio of decisions, including the Supreme Court's in TRO v. Gangadhar Vishwanath Ranade, which established that Tax Recovery Officers (TROs) and similar revenue authorities do not have the power to declare a transfer void under Section 281 of the Income-tax Act. Such a declaration requires a civil suit. Therefore, the impugned order creating a charge over the property does not warrant interference, and the attachment and charge shall continue until the respondent obtains a declaration from the competent Civil Court that the purchase was fraudulent. The Court explicitly restrained the respondent authority from selling, disposing of, or parting with the property without such a declaration.
The High Court held that the petitioners had made out a strong prima facie case. The Tribunal and the first appellate authority were not justified in demanding huge pre-deposit amounts for admitting the appeals and staying recovery. The Court noted that the Assessing Officer relied on Section 11(7A) of the GVAT Act, which envisages disallowance of tax credit only if it exceeds the tax paid on the same goods. It was reasoned that ITC cannot be disallowed by merely calculating a percentage of purchases from a dealer whose registration is cancelled, without first establishing that tax was not paid on the specific goods purchased. The Court also considered the financial hardship of the petitioners and their offer to provide residential premises as security. Therefore, the impugned orders of the Tribunal demanding pre-deposit were quashed and set aside. The matters were remanded to the first appellate authority to decide the appeals afresh on merits, treating the residential property of a partner as security for the pre-deposit amount and staying recovery until the final disposal of the appeals by the first appellate authority.
The High Court held that the petitioners had made out a strong prima facie case. The Tribunal and the first appellate authority were not justified in demanding huge pre-deposits for admitting the appeals and staying recovery. The Court noted that at the time of assessment, the petitioners did not have copies of the assessment orders against the vendors, thus lacking an opportunity to prove the genuineness of transactions. The Court also referred to Section 11(7A) of the GVAT Act, stating that ITC disallowance requires establishing that tax was not paid on the specific goods purchased, not merely working out a percentage of purchases from a dealer with cancelled registration. Considering the financial hardship and the offer to provide residential premises as security, the Court quashed the impugned Tribunal orders. The matters were remanded to the first appellate authority to decide afresh on merits, treating the residential property of a partner as security for the pre-deposit amount and granting a stay against recovery until the appeals are finally decided.
The High Court held that the appeals did not give rise to any substantial question of law. Regarding the deletion of additions under Section 36(1)(ii) for commission paid to directors, the Court noted the assessee's argument of consistency, supported by Supreme Court decisions, and found no reason to interfere. For the issue of bogus purchases, the Court concurred with the concurrent findings of the Commissioner (Appeals) and the ITAT that the estimation of the difference at 3% was a matter of estimate and not a question of law, citing Sanjay Oilcake Industries v. Commissioner of Income-tax. Concerning gratuity expenses, the Revenue fairly conceded that the controversy was concluded by the Supreme Court's decision in CIT v. Textool Co. Ltd. For the insurance expense, the Tribunal held that insurance premium paid on a car is revenue in nature and allowable in the year incurred, citing Section 31(ii) of the Act. The High Court agreed with this view. Consequently, all appeals were dismissed.
The High Court allowed the appeal, quashing and setting aside the order of the ITAT. The Court answered the substantial question of law in favour of the assessee. The Court held that the Assessing Officer solely relied on the report of the DVO, and there was no evidence or material to conclude that the assessee had paid extra consideration over and above what was stated in the sale deed. The Court reiterated the principle that the primary burden of proof to prove understatement or concealment of income lies with the Revenue. It was further held that the opinion of the Valuation Officer, per se, is not sufficient and cannot be relied upon without the books of accounts being rejected, which had not been done. The Court referred to Supreme Court judgments emphasizing that the DVO's opinion is not an information for reopening assessment and that the AO must apply his mind and form a belief based on collected information. The Court also noted that Section 50C applies to the seller and not the purchaser, and the addition under Section 69B cannot be made on the basis of presumed investment.
The High Court held that the appeals did not give rise to substantial questions of law. Regarding the commission paid to directors (Section 36(1)(ii)), the Court noted the assessee's argument of consistency, citing Supreme Court decisions. The Court found no error in the Tribunal's deletion of additions, implicitly agreeing with the Tribunal's reasoning that the payments were not hit by Section 36(1)(ii) or that consistency should be applied. For bogus purchases, the Court concurred with the Tribunal and Commissioner (Appeals) that estimating the difference at 3% was a matter of estimation and not a question of law, citing Sanjay Oilcake Industries v. Commissioner of Income-tax. For gratuity and insurance expenses, the Court agreed with the Tribunal's findings. Specifically, for insurance expense, the Tribunal held it to be revenue in nature and allowable under Section 31(ii), a view the High Court concurred with. The Court found no illegality or infirmity in the Tribunal's order.
The High Court held that the appeals did not give rise to substantial questions of law. Regarding the commission paid to directors (Section 36(1)(ii)), the Court noted the assessee's argument of consistency, citing Supreme Court decisions. The Court found no error in the Tribunal's deletion of additions, implicitly agreeing with the Tribunal's reasoning that the payments were not hit by Section 36(1)(ii) or that consistency should be applied. For bogus purchases, the Court concurred with the Tribunal and Commissioner (Appeals) that estimating the difference at 3% was a matter of estimation and not a question of law, citing Sanjay Oilcake Industries v. Commissioner of Income-tax. For gratuity and insurance expenses, the Court agreed with the Tribunal's findings. Specifically, for insurance expense, the Tribunal held it to be revenue in nature and allowable under Section 31(ii), a view the High Court concurred with. The Court found no illegality or infirmity in the Tribunal's order.
The High Court held that the Assessing Officer (AO) had not applied his mind in a manner that would indicate a total non-application of mind. The AO's conclusion for reopening the assessment was not solely based on observations and information from the Investigation Wing but indicated an application of his mind to the same. The court found that the AO had not merely concluded without verifying facts but had sufficient material on record to form a reasonable belief that income chargeable to tax had escaped assessment. The court examined the AO's belief to the limited extent of determining whether there was sufficient material to form a reasonable belief and whether a live link existed between the material and the escaped income. It was concluded that the AO did not initiate reassessment proceedings based on vague or unspecific information without forming his own belief. Therefore, the writ applicant had not made out a case for interference.
The High Court held that the reopening of the assessment under Section 147 was valid. The Court found that there was no total non-application of mind by the Assessing Officer (AO) while recording the reasons for reopening. The AO's conclusion was not solely based on observations or information from the Investigation Wing but indicated an application of mind. The Court examined the AO's belief to a limited extent, confirming that sufficient material was available to form a reasonable belief and that there was a live link between the material and the escaped income. The Court rejected the assessee's submission that the reasons recorded were merely an introduction to the investigation's findings. The Court concluded that the AO did not initiate reassessment proceedings based on vague or unspecific information without forming his own belief. Therefore, no case was made out for interference, and the writ applications were rejected.
The High Court allowed the writ petition and quashed the impugned notice. The Court found substance in two of the assessee's submissions: first, that the transaction, having occurred in AY 2007-08, could not be examined under AY 2011-12. Second, the re-opening appeared to be a case of change of opinion. The Court referred to the Supreme Court's decision in Commissioner of Income-Tax vs. Kelvinator of India Ltd., emphasizing that re-assessment must be based on tangible material and not a mere change of opinion. The Court noted that the original Assessing Officer had minutely scrutinized the Rs. 6 Crore transaction and the repayment thereof, and after due consideration of the details furnished, consciously chose not to make any addition. Therefore, the subsequent action of re-opening the case based on the same issue was considered untenable as it amounted to a change of opinion. Consequently, the impugned notice and all consequential proceedings were quashed.
The High Court allowed the petition, quashing and setting aside the impugned notice dated March 29, 2018, issued under Section 148 and the order dated October 12, 2018, disposing of objections. The Court reasoned that the reasons recorded for reopening merely indicated information received from the DGIT (Investigation) about suspicious transactions by a particular entity. However, this material was not sufficiently linked by any reasons to conclude that the assessee had indulged in activities giving rise to a belief that income chargeable to tax had escaped assessment. The Court emphasized that reopening is an extraordinary power requiring the AO to form a belief based on tangible material and a rational connection to the formation of that belief, not on "borrowed satisfaction" or a "fishing inquiry." The judgment cited the Bombay High Court's decision in M/s. Shodiman Investments Pvt. Ltd. and Supreme Court rulings in S. Narayanappa and ITO v/s. Lakhmani Merwal Bus to underscore that the reasons must indicate a "live link" between the material and the belief of escapement of income. The absence of a specific amount of escaped income in the reasons further evidenced a fishing inquiry rather than a reasonable belief.
The High Court held that the impugned notice for reopening the assessment is not sustainable in law. The Court found that the reasons recorded by the Assessing Officer to form the belief that income chargeable to tax had escaped assessment lacked validity. The Court's reasoning was based on the principle that if the return form in force at the relevant time does not provide a specific column for disclosing certain types of income or investments, the assessee cannot be deemed to have failed or omitted to disclose all material facts necessary for his assessment. The Court referred to the evolution of return forms and Supreme Court judgments, including V.D.M.RM.M.RM. Muthiah Chettiar v. CIT [1969] 74 ITR 183 and Kochammu Amma [1980] 125 ITR 624, which established that the absence of a specific column in the return form for disclosing income under Section 64 (and by extension, other investments) meant there was no omission or failure on the part of the assessee. Therefore, the notice under Section 148 was set aside.
The Court held that the petition had abated due to the death of the sole petitioner in 2016 and the subsequent failure to bring his legal heirs on record. The Court disagreed with the submission that filing a restoration application by legal heirs automatically brought them on record, stating that a specific court order was required. Furthermore, even if the legal heirs were deemed on record, the Court found no substance in the petition. It noted the petitioner's failure to disclose correct facts, including how he became the owner, and to produce crucial documents like the Collector's order and the disputed revenue entries (No. 118, 154, and 181). Citing K.D. Sharma v. Steel Authority of India Limited, the Court emphasized the duty of petitioners invoking writ jurisdiction to be truthful and disclose all material facts. On merits, the Court found the S.S.R.D.'s order to be just and proper, confirming the cancellation of entries due to a breach of allotment conditions while allowing the Collector to initiate separate proceedings under Section 79-A. The Court found no merit in the petitioner's reliance on the cited cases regarding Section 79-A proceedings.
The High Court held that none of the proposed questions of law are substantial questions of law. The Court found no good reason to disturb the impugned order of the ITAT. The ITAT had noted that there were no arguments to dislodge the findings of the CIT(A). While the assessee submitted that lenders confirmed giving loans and relied on contentions before lower authorities regarding alleged gift of Rs. 4,00,000 and accumulated past savings of Rs. 14,87,543, the Tribunal found these submissions unconvincing. The Tribunal approved the CIT(A)'s findings regarding alleged gift of Rs. 4,00,000 and borrowings of Rs. 1,53,100 from friends and relatives. However, regarding the claim of Rs. 14,87,543 as accumulated savings and agricultural income, the Tribunal was of the view that since the assessee had some agricultural income, an amount of Rs. 5,00,000 could be treated as explained, thus upholding the assessee's plea to that extent. Consequently, the ITAT upheld the addition to the extent of Rs. 13,26,730 and deleted the addition to the extent of Rs. 5,00,000. The High Court dismissed the appeal.
The High Court held that the issue raised by the Revenue was no longer res integra. This was in view of the Court's own decision in the case of General Motors Pvt Ltd vs. Deputy CIT [354 ITR 244]. The Court found that the ITAT's decision was in line with established legal precedent. Consequently, the Tax Appeal filed by the Revenue was dismissed. The specific reasoning from the cited precedent, General Motors Pvt Ltd, which likely addressed the prospective or retrospective nature of the Finance Act amendment and its impact on unabsorbed depreciation, formed the basis of this decision. The operative direction was the dismissal of the appeal.
The Tribunal held that the reopening of assessment under Section 148 was bad in law. It noted that the reopening occurred after the expiry of four years from the end of the relevant assessment year. Crucially, the reasons recorded for reopening did not indicate any new information coming into possession of the AO, nor did they allege any failure on the part of the assessee to disclose fully and truly all material facts necessary for the assessment. The Tribunal also observed that the assessee's objections filed on January 21, 2013, were not properly disposed of by the AO, contrary to the principles laid down by the Supreme Court and the Gujarat High Court. Applying the ratio of the Gujarat High Court in Sadbhav Engineering Ltd. vs. DCIT, the Tribunal concluded that in the absence of any averment of failure by the assessee to disclose material facts, the initiation of proceedings under Section 147 by issuing notice under Section 148 after four years was unsustainable. Consequently, the Tribunal quashed the reassessment proceedings, holding that the reopening amounted to a change of opinion and there was no failure on the part of the assessee. The other grounds related to disallowance of partner's remuneration became infructuous.
The Tribunal held that a notice issued under Section 148 of the Income Tax Act, 1961, to a deceased person is invalid, and Section 292B of the Act would not be attracted if the legal representative does not waive their right to a notice or submit to the Assessing Officer's jurisdiction. The Court distinguished the present case from others where legal representatives had participated in proceedings and then raised objections, deeming that as a waiver. In this case, the petitioner had objected to the validity of the notice from the outset and had not participated in the reassessment proceedings by filing a return. The Court found that issuing a notice to a dead person is not in conformity with the intent and purpose of the Act, which requires notice to the assessee for the Assessing Officer to assume jurisdiction under Section 147. Therefore, the notice was treated as invalid, and the Assessing Officer lacked the authority to proceed. The Court allowed the writ petition, quashing the impugned notice and all subsequent proceedings. The Assessing Officer was permitted to issue a fresh notice under Section 148 to the legal representative, provided it was not barred by limitation.
The High Court held that the impugned notice issued under Section 148 of the Income Tax Act, 1961, is not sustainable in law. The Court noted that the income sought to be reassessed was already assessed and was the subject matter of appeal before the CIT(Appeals), with the matter then pending before the ITAT. This situation triggers the principle of merger, meaning the original assessment order merges with the appellate order. The third proviso to Section 147 of the Act explicitly states that the Assessing Officer may assess or reassess income other than income involving matters that are the subject matter of any appeal, reference, or revision. Therefore, reopening the assessment on an issue that was already under appeal before the CIT(Appeals) is barred by this proviso. The Court relied on its own decisions in Radhawami Salt Works vs. Asst. Commissioner of Income Tax and Jhankit Chandulal Prajapati vs. Dy. Commissioner of Income Tax, which dealt with similar situations involving the principle of merger and the third proviso to Section 147. The petition was allowed, and the impugned notice was quashed and set aside.
The High Court held that the Income Tax Appellate Tribunal was correct in deleting the disallowance of additional depreciation. The Court relied on the Supreme Court's decision in State of Andhra Pradesh vs. NTPC Ltd., which established that electricity is 'goods' and its generation is akin to the production of an 'article or thing'. The Delhi High Court's decision in Principal Commissioner of Income-tax, New Delhi vs. NTPC Sail Power Co. (P.) Ltd. was also cited, which affirmed that electricity has the trappings of 'articles' or 'things' and the benefit of additional depreciation cannot be denied. The Court noted that the amendment by the Finance Act, 2012, which expressly included power generation entities, further supported the view that such activities were always considered manufacturing processes. Therefore, the assessee was rightly held entitled to additional depreciation. The appeal filed by the Revenue was dismissed.
The High Court dismissed the tax appeal. It held that the issue raised by the assessee was squarely covered by its earlier decision in M/s Checkmate Facility And Electronic Solutions Pvt. Ltd. The Court found no merit in the assessee's contention that the cited judgments were per incuriam. It observed that the Urmin Products Pvt. Limited case did not lay down any law but merely stated that if the Tribunal relied on the Delhi High Court's decision in CIT vs. P M Electronics Ltd., it did not commit an error. Therefore, the High Court concluded that the assessee failed to satisfy it on the issue, and no substantial question of law arose for consideration. The appeal was dismissed.
The Tribunal held that the first two issues concerning the disallowance of payments to the education fund and the members' welfare fund were covered against the Revenue by the decision of the Tribunal in ITA No. 3242/Ahd/2010, which allowed similar expenditure by holding that the assessee had to maintain good relations with members and such expenditure was towards their welfare. This was supported by the Gujarat High Court's decision in Karjan Co-operative Cotton Sales Ginning & Pressing Society Vs. CIT (199 ITR 17). For the third and fourth issues, relating to the Special Long Term Finance Fund and investment depreciation, the Tribunal affirmed the findings of the CIT(A). The CIT(A) had deleted the disallowance by relying on the Gujarat High Court's decision in Daskroi Taluka Co-operative & Sales Union Ltd. (126 ITR 413), which held that expenditure incurred for maintaining a good image and goodwill among members, ensuring business continuity, was for the purpose of business. The Tribunal found the facts of the assessee's case similar to the relied-upon precedents. Therefore, the Tribunal dismissed the Revenue's grounds of appeal.