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The High Court noted that the petitioner's objections against the satisfaction note were indeed considered and disposed of by the respondent on December 27, 2021, which occurred after the filing of the present petition. The Court observed that the essential prayer of the petition was to direct the authority to consider these objections. Since the objections were subsequently disposed of, the Court found that the petition, as originally framed, would not survive. However, the Court acknowledged the petitioner's request for time to reply to the final show cause notice dated December 27, 2021, issued after the disposal of objections, due to the apprehension of assessment being framed before December 31, 2021. The Court directed that the petitioner be at liberty to request reasonable time, at least one week, from the authority concerned for filing their reply, and that this request should be considered by the authority. The petition was disposed of without formal entertainment due to the developments during its pendency, but with the direction regarding the adjournment request.
The High Court held that the faceless assessment regime, while aiming for transparency, cannot become an 'earless' regime. The Court found that the assessee's request for adjournment, made on the Income Tax Department's e-filing portal on May 2, 2021, due to the prevailing pandemic situation, was a valid request that ought to have been considered. The Court noted that the non-reflection of this request on the auto-generated order sheet, despite being clearly visible on the portal and not disputed by the Revenue, was a technical glitch that caused prejudice to the assessee. The Court emphasized that the department must have a matching pace with technological advancements and adopt a fairer approach when glitches adversely impact assessees. The Court concluded that the assessment order was passed in complete breach of the principles of natural justice and the opportunity to furnish submissions in response to the final show cause notice was denied. Therefore, the assessment order dated May 10, 2021, and the demand notice under Section 156 were quashed. The matter was relegated to the stage where the final show cause notice was issued, with the assessee being given two weeks to respond. The Court also stated that if the petitioner chose to seek a personal hearing, it would be accorded in accordance with law. No findings or observations were made on the merits of the case.
The High Court held that the Tribunal had not committed any mistake apparent from the record under Section 254(2) of the Income Tax Act, 1961. The Court reasoned that the Tribunal's order dated 14.08.2019 was passed when CBDT Circular No. 23/2019 dated 06.09.2019 and Office Memorandum No. 279 dated 16.09.2019 were not in existence. Therefore, these subsequent circulars could not be considered a mistake apparent from the record at that time. Furthermore, the Court found no substance in the petitioner's submission that the Tribunal should have recalled the order based on these later circulars. The Court analyzed the Circular dated 06.09.2019 and the Office Memorandum dated 16.09.2019 and concluded that there was nothing to suggest they had retrospective effect. The language indicated that appeals could be filed on merits as an exception where the Board, by way of a special order, directed filing of appeals in cases of organized tax evasion. The Court found that the Tribunal rightly observed that the decision to file an appeal in such cases would require a special order from the Board. Therefore, the appeals disposed of on 14.08.2019 could not be considered as filed pursuant to a special order of the CBDT under these later circulars. The petition was dismissed.
The learned Senior Advocate for the petitioner, Mr. Hemani, did not press the petition. Consequently, the High Court did not delve into the merits of the case. The Court noted that it was open for the petitioner to pursue any other legal recourse available to them. The petition was disposed of without any decision on the substantive issues raised.
The High Court noted the communication from the assessee's counsel that the assessee had availed the benefit under the Direct Tax Vivad se Vishwas Act, 2020, and had made tax payments. Based on this, the Principal Commissioner of Income Tax-1, Ahmedabad, requested the withdrawal of the Tax Appeal. The Court heard both the learned senior advocate for the appellant (Revenue) and the learned advocate for the respondent (Assessee). Considering the request for withdrawal, the Tax Appeal was permitted to be withdrawn. The Court explicitly stated that the questions of law were kept open to be adjudicated in an appropriate matter at a future date. Therefore, no decision was made on the merits of the substantial questions of law.
The High Court allowed the petition, quashing and setting aside the impugned assessment order and the consequent demand notice. The Court found a clear admission in the affidavit-in-reply on behalf of the respondents that a final show cause notice, along with the draft assessment order, was not served upon the petitioner, and no date was fixed for furnishing a reply. The Court relied on its previous decision in Gandhi Realty (India) Private Limited Versus Assistant /Joint/ Deputy/ Assitant Commissioner Of Income Tax/ Income Tax Officer, which held that if there is any variation prejudicial to the assessee, a final notice with the draft assessment order must be served as per the mandate of the statute, failing which the order passed is non-est. The Court directed the respondent/revenue to proceed with the assessment process under Section 144B read with Section 144C of the Income Tax Act, 1961, after issuing the final notice-cum-draft assessment order and providing an opportunity to the petitioner to file a response and objections, including an opportunity for personal hearing. The final order was to be passed within twelve weeks from the receipt of the order.
The High Court did not decide the merits of the case. The learned advocate for the petitioner stated that the petition was not pressed. Consequently, the petition was disposed of as not pressed. The Court explicitly noted that it had not chosen to enter into the merits of the case. The petitioner was granted liberty to take recourse to legal remedies available under the law. No specific finding was given on the validity of the notice, reasons, or objection order, nor on the compliance with Sections 148(2) and 151.
The High Court noted that the learned advocate for the petitioner, Mr. Soparkar, had chosen not to press the matter at that stage. Consequently, the Court decided not to go into the merits of the case. The disposal of the petition was made without prejudice to the petitioner's right to pursue other legal remedies. No specific finding was given on the validity of the reopening notice or the subsequent order. The operative direction was to dispose of the petition as not pressed.
The High Court noted that the learned advocate for the petitioner, Mr. Soparkar, had chosen not to press the matter at that stage. Consequently, the Court decided not to go into the merits of the case. The disposal of the petition was stated to not impede the petitioner from pursuing other legal remedies. No specific finding was reached on the validity of the reopening notice or the order under challenge, as the matter was not pressed. The operative direction was to dispose of the petition without prejudice to the assessee's right to pursue other remedies.
The Tribunal held that the petitioner's case was covered by the binding decisions of this Court in J.K. Cement Ltd. and Udaipur Cement Works Ltd., which were also confirmed by the Apex Court. The fact that M/s. IOCL had issued certificates and followed necessary procedures was noted. The Tribunal strongly disapproved of the respondent-State's failure to follow binding judicial precedents, citing E I DUPONT INDIA PRIVATE LIMITED & 1 vs UNION OF INDIA & 3. and Claris Lifesciences Ltd. The Tribunal directed the respondents to process the refund claim without delay and grant the refund of the tax amount collected and deposited by the seller, along with consequential reliefs, within twelve weeks. A token cost of Rs. 10,000/- was also awarded to the petitioner.
The High Court allowed the writ petition, directing the respondents to process the refund claim of Rs. 33,59,829/- along with appropriate interest. The Court found that the matter was covered by the binding decisions of J.K. Cement Ltd. and Udaipur Cement Works Ltd., which were confirmed by the Apex Court. The Court noted that IOCL had also issued the necessary certificates and fulfilled its obligations. The Court strongly disapproved of the respondent authorities' failure to follow binding judicial precedents, citing previous judgments like E I DUPONT INDIA PRIVATE LIMITED & 1 vs UNION OF INDIA & 3. and Claris Lifesciences Ltd. The Court directed the Central Board of Excise and Customs to issue a circular to all adjudicating authorities to prevent such occurrences in the future. The respondents were directed to grant the refund within twelve weeks from the receipt of the order, along with token costs of Rs. 10,000/-.
The High Court heard the learned advocate for the petitioner who argued that the reopening beyond four years was unsustainable in the absence of any allegation of failure to disclose material facts. The petitioner relied on *Parashuram Pottery Works Co. Ltd. vs. Income-tax Officer* and *Shree Bansidhar Spg. & Wvg. Mills (P.) Ltd. vs Income-tax Officer*. However, at the conclusion of the hearing, the learned advocate for the petitioner sought withdrawal of the petition. Consequently, the Court disposed of the petition as withdrawn. No decision was made on the merits of the case regarding the validity of the reopening notice or the grounds raised by the petitioner. The operative direction was to dispose of the petition as withdrawn.
The High Court held that the Tribunal committed no error. It rightly pointed out that since the original assessment order dated 16.03.2015 was set aside by the Tribunal in ITA No.1422/Ahd/2017, the proceedings under Section 263 of the Act could not be sustained. The Tribunal's finding that the Section 263 proceedings became infructuous was upheld. The assessment order dated 27.03.2017, passed under Section 143(3) read with Section 263, was based on the Section 263 order, which was no longer available. Therefore, the subsequent proceedings became redundant. The Court noted that the Tribunal had already directed a fresh assessment order by treating the assessee as a charitable institution, in line with the Gujarat High Court's decision in Ahmedabad Urban Development Authority vs. Asst. Commissioner of Income Tax (Exemptions), (2017) 396 ITR 323(Guj.). The Tax Appeals arising from the earlier decisions of this Court (Tax Appeal No.300 of 2018 and Tax Appeal No.214 of 2020), which were dismissed against the Revenue, were also noted. The substantial questions of law were answered in favor of the assessee, and since no stay was granted on the pending SLPs, this appeal met the same fate.
The High Court held that the ITAT did not commit any mistake apparent from the record under Section 254(2) of the Income Tax Act, 1961. The Court reasoned that the CBDT Circular dated 06.09.2019 and the Office Memorandum dated 16.09.2019 did not have retrospective effect. The Circular stated that appeals could be filed on merits as an exception to monetary limits if the Board passed a special order in cases of organized tax evasion. The Court found nothing in the language of these documents to suggest retrospective application; they spoke of appeals to be filed in the future pursuant to special orders. Therefore, the appeals disposed of on 14.08.2019 could not be considered as filed pursuant to these subsequent circulars. The ITAT's observation that a special order from the CBDT was a prerequisite for filing appeals under these provisions was deemed correct. Consequently, the Miscellaneous Application filed by the petitioner before the ITAT was rightly dismissed.
The High Court allowed the petition, directing the respondent authority to permit the withdrawal of the remaining amount deposited in the Capital Gain Account Scheme. The Court reasoned that the petitioner had paid advance tax of Rs. 1.25 Crores, which was more than the amount due. The Court noted that the petitioner, a practicing advocate, had a consistent record of tax compliance. The Court found no reason for the authority to deny the NOC, especially given the advance tax payment and the petitioner's undertaking to provide a physical copy of the return to the Assessing Officer. The Court emphasized that the Capital Gains Accounts Scheme, 1988, provides for withdrawal and closure of accounts with the approval of the Assessing Officer. In this case, the petitioner's inability to fulfill Section 54F conditions and his desire to utilize the funds for other legally permissible purposes after paying tax warranted the NOC. The Court directed the issuance of the NOC within one week. The petitioner was also directed to file an undertaking before the concerned Assessing Officer.
The Tribunal noted that the learned senior advocate for the petitioner, Mr. Tushar Hemani, assisted by Ms. Vaibhavi Parikh, argued the matter for some time. Subsequently, the petitioner chose to withdraw the Special Civil Application. The Court explicitly stated that it had not entered into the merits of the matter. The withdrawal of the petition was accepted, and the matter was disposed of as withdrawn. The Court also clarified that this withdrawal would not preclude the petitioner from pursuing other legal recourses available under the law. No specific finding on the merits of the reassessment notice was made.
The High Court of Gujarat noted that the petitioner, after arguing the matter for some time, chose to withdraw the petition. Consequently, the petition was disposed of as withdrawn. The Court explicitly stated that it had not entered into the merits of the matter. The withdrawal was without prejudice to the petitioner's right to pursue other legal recourses available under the law. No specific finding was made on the validity of the Section 148 notice, as the case was decided on the withdrawal by the petitioner.
The High Court held that the observations made by the Tribunal were by way of justification for the assumption of jurisdiction by the PCIT. The Court found no fault with the Tribunal supporting the PCIT's order. The Court noted that the Tribunal, being conscious of the appellate authority potentially being influenced by its observations, had aptly cautioned the authority to specifically direct not to be so influenced. The Court considered these sufficient safeguards and saw no need for interference. The Court clarified that directions for de novo adjudication inherently mean looking at the matter afresh without any influence or being clouded by past observations. The Court reiterated that the concerned authority, while exercising revisional jurisdiction, shall decide the matter afresh and in accordance with law, strictly bearing in mind legal principles and affording reasonable opportunities. The Court found no substantial question of law and therefore did not entertain the Tax Appeal.
The High Court held that the petitioner's contention that he is not maintaining books of account, and therefore Section 142(2A) cannot be invoked, is not tenable. The Court noted that the petitioner, in his statement recorded under Section 132(4) of the Act, had referred to maintaining books of account in TALLY and reflected cash transactions in them. This contradicted his subsequent stand of not maintaining books of account. The Court observed that the amendment to Section 142(2A) was made to give it a wider meaning, overcoming restrictive interpretations by courts. Therefore, the legislature intended a broader application of the provision. The Court found that the Assessing Officer had considered relevant factors justifying the special audit. The petition was dismissed, with the petitioner directed to cooperate with the special auditor, and the time for submitting the report was extended. No costs were awarded.
The High Court dismissed the petition. The Court observed that while the petitioner claimed not to maintain books of account, her statement recorded under Section 132(4) of the Act indicated otherwise. In that statement, she referred to maintaining books of account in TALLY program and reflected cash found during the search in her books of account. The Court found a contradiction in her subsequent stand of not maintaining books of account. The Court reasoned that the amendment to Section 142(2A) was intended to give a wider meaning to the provision, and the intention of the legislature could not be that the provision cannot be invoked merely because an assessee claims not to maintain books of account. The Court noted that the petitioner's claim of not maintaining books of account was contrary to her own statement during the search. Therefore, the Assessing Officer was justified in invoking Section 142(2A). The Court modified its earlier stay order to allow the Special Auditor to confine himself to the scope of Section 142(2A) read with Rule 14(A) and Form 6(B), and directed the petitioner to cooperate. The time for submitting the report was extended.
The High Court held that the petitioner's contention that the absence of statutorily mandated books of account precludes the invocation of Section 142(2A) is incorrect. The Court noted that the petitioner, in their statement recorded under Section 132(4), had referred to maintaining books of account in a TALLY program and reflected cash transactions therein. This contradicted their subsequent stand of not maintaining books of account. The Court reasoned that the legislature, by amending Section 142(2A), intended to give it a wider meaning to overcome restrictive judicial interpretations. Therefore, even if an individual is not statutorily mandated to maintain books of account, the provision can still be invoked if the circumstances, such as the volume and complexity of seized data, warrant it. The Court found that the petitioner's own statement indicated the existence of accounts. Consequently, the petition was dismissed, with the direction that the petitioner cooperate with the Special Auditor and an extension granted for the submission of the report.
The High Court of Gujarat, while hearing the Special Civil Application, noted that after arguing the matter for some time, the learned advocate for the petitioner, on instructions, sought to withdraw the petition. The Court explicitly stated that it had not gone into the merits of the case. Consequently, the petition was disposed of as withdrawn. The Court clarified that all issues agitated before it were kept open and the order would not come in the way of the petitioner in any manner. No specific findings were made on the validity of the Section 148 notice or the order dismissing objections, as the matter was withdrawn before any adjudication on merits.
The High Court of Gujarat, after hearing the arguments for some time, noted that the learned advocate for the petitioner, on instructions, sought to withdraw the petition. The Court explicitly stated that it had not gone into the merits of the case. Consequently, the petition was disposed of as withdrawn. The Court clarified that the withdrawal would not prejudice the petitioner in any manner and all issues agitated before the Court were kept open. No specific finding was given on the validity of the Section 148 notice or the order dismissing objections, as the matter was not decided on merits.
The High Court dismissed the appeal, holding that the ITAT's order dated 14.08.2019 was passed before the existence of Circular No. 23 of 2019 (dated 06.09.2019) and the Office Memorandum dated 16.09.2019. Therefore, these circulars could not have been considered by the Tribunal at that time. The Court further held that the said circulars and OM did not have retrospective effect. The language of the circular indicated that appeals could be filed on merits as an exception to other circulars where the Board, by way of a special order, directs filing of appeals in cases of organized tax evasion. The Court found no substance in the argument that the Tribunal should have recalled its order based on these subsequent circulars. The Tribunal had rightly observed that a special order from the CBDT was a prerequisite for applying these exceptions. Consequently, the Tribunal's dismissal of the Miscellaneous Application filed by the Revenue was upheld, and the appeal was dismissed.
The High Court held that the appeal deserved no entertainment, finding no merit in the Revenue's contentions. The Court noted the concurrent findings of the CIT(A) and the ITAT. The CIT(A) had deleted the addition, primarily because the documents relied upon were seized from the premises of Venus Group, not the assessee, and the AO failed to produce independent clinching evidence. The CIT(A) also observed that the AO had not brought on record any statement from the main persons of Venus Group admitting to accommodation entry transactions. Furthermore, the assessee's books showed that the Rs. 4 Crores in question was a repayment by Sunderdeep Builders against an outstanding liability, reflected in the assessee's bank account via an account payee cheque. The High Court also considered the statement of Mr. Deepak Gajjar, an accountant from Venus Group, who, during cross-examination, admitted to having no personal knowledge of the source of cash and denied receiving the Rs. 4 Crores in cash from Ganesh Plantations or its directors. The Court concluded that the additions were made without legally supported documents and lacked rational basis, affirming the decisions of the lower appellate authorities.
The High Court held that the ITAT's dismissal of the Revenue's appeal on 14.08.2019 was based on the monetary limits then in force. The Court noted that Circular No. 23 of 2019 and the OM dated 16.09.2019 were not in existence at the time the ITAT passed its order. The Court found no substance in the Revenue's submission that the ITAT should have recalled its order in view of these circulars, as they did not have retrospective effect. The Court observed that the circulars provided for exceptions to monetary limits where the Board, by way of a special order, directs filing of appeals in cases of organized tax evasion. The Court concluded that the appeals disposed of on 14.08.2019 were not filed pursuant to any special order under these circulars, and therefore, the ITAT had not committed any mistake apparent from the record requiring rectification. Consequently, the ITAT's dismissal of the Miscellaneous Application was upheld.
The High Court disposed of the Tax Appeal as withdrawn, without entering into the merits of the case or expressing any opinion on the questions of law. This decision was made to allow the appellant the opportunity to avail the benefits under the Vivad Se Vishwas Scheme. The Court noted that it would be open for the applicant to take legal recourse if they were unable to avail the benefit under the scheme. The Civil Application for withdrawal was also disposed of as it did not survive. The operative direction was to dispose of the Tax Appeal as withdrawn.
The High Court allowed the petition, holding that the department is precluded from denying the benefit of the tax deducted at source to the petitioner. The Court relied on its own previous decision in Devarsh Pravinbhai Patel vs. Assistant Commissioner of Income Tax and the Bombay High Court's decision in Assistant Commissioner of Income Tax vs. Om Prakash Gattani. The reasoning was that Section 205 of the Income Tax Act provides that an assessee shall not be called upon to pay tax himself to the extent to which tax has been deducted from that income. The Court emphasized that while credit for TDS is given when deducted and paid to the government (Section 199), Section 205's applicability is not dependent on credit being given under Section 199, but on the fact that the amount has been deducted from the income. The Court noted that Section 201 of the Act adequately addresses the scenario where the deductor fails to deposit the tax, making the deductor liable as an assessee in default, thus protecting the employee from double payment or arduous recovery proceedings. The department was directed to give credit for the TDS to the petitioner and refund any amount recovered or adjusted with statutory interest.
The High Court held that the detention and confiscation of goods and conveyance were not tenable. It was noted that the goods were in transit with proper documents (invoice and e-way bill), and a physical verification report (Form GST MOV 4) found no discrepancies. The sole ground for seizure was the alleged past wrongful availment of input tax credit by the buyer. The Court referenced Section 68 of the GST Act, which empowers interception for verification of documents. However, it emphasized that the documents produced were in order. Citing the CBIT Circular No. 41/2018 and the High Court's decision in Shri Anant Jignesh Shah, the Court reiterated that confiscation is not permissible based on assumptions about the buyer's past transactions. Therefore, the goods and conveyance were ordered to be released. The Court clarified that its order did not interfere with any show-cause notice or inquiry that might be contemplated against the buyer or the petitioner regarding the buyer's transactions.
The High Court, acceding to the request of the assessee's advocate, disposed of the Tax Appeal as not pressed. The Court explicitly stated that it did not enter into the merits of the case nor expressed any opinion on the substantial question of law. The operative direction was to permit the withdrawal of the appeal. The Court also noted that if the appellant were unable to avail the benefit of the Vivad Se Vishwas Scheme for any reason, it would be open for them to take recourse to legal remedies available under the law. No specific finding was given on the penalty or the addition under Section 68.
The High Court, acceding to the request of the appellant's advocate, disposed of the Tax Appeal as not pressed. The Court explicitly stated that it was not entering into the merits of the case and was not expressing any opinion on the substantial questions of law. The operative direction was to allow the withdrawal of the appeal. The judgment also noted that if the appellant is unable to avail the benefit of the Vivad Se Vishwas Scheme for some reason, it would be open for them to take legal recourse available under the law. No specific finding was given on the penalty or the addition of investment.
The High Court of Gujarat at Ahmedabad, after hearing the arguments for some time, acceded to the request of the learned advocate for the petitioner to withdraw the petition. The Court explicitly clarified that it had not entered into the merits of the matter. Therefore, no finding was given on the validity of the order passed by the Principal Chief Commissioner of Income Tax-1, Ahmedabad, nor were any directions issued regarding the waiver or reduction of interest. The petition was disposed of as withdrawn, with no decision on the substantive issues raised.
The High Court, without entering into the merits of the case or quashing the notice on the ground of limitation in light of the M.H. Khansuiya judgment, remanded the matter back to the Assessing Officer. The Court noted that the learned AGP had no input from the department regarding the payment of tax at 12.5% in Rajasthan. While acknowledging that non-filing of a return permits the initiation of proceedings, the payment of tax in Rajasthan was to be considered. The Court directed that if the petitioner could gather the substantive documents even now, the order of assessment would be quashed, and the matter would be remanded. The State Tax Officer Unit-II, Ahmedabad, was directed to decide the matter within six weeks from the receipt of the order, examining all documents carefully and addressing the issues in accordance with the law, without being influenced by the disposal of the petition. The issue of unconstitutionality under Article 304(A) and breach of natural justice were not explicitly decided but would be considered during the fresh assessment.
The High Court, while not quashing the notice on the ground of limitation in light of the decision in M.H.Khansuriya (supra), remanded the matter back to the Assessing Officer. The Court noted that the learned AGP had no input from the department regarding the factum of tax payment at 12.5% in Rajasthan. However, it acknowledged that non-filing of a return would permit the respondent authority to initiate proceedings. The Court emphasized that the tax liability under the VAT Act in Rajasthan would need consideration by the respondent. The Court directed the State Tax Officer Unit-II, Ahmedabad, to decide the matter within six weeks from the receipt of the order, after examining all documents and addressing the issues in accordance with law, without being influenced by the disposal of the petition. The Court did not explicitly decide on the unconstitutionality or violation of Article 304(A) or the breach of natural justice, but rather remanded the case for fresh consideration.
The High Court, without entering into the merits of the case, disposed of the petition at the admission stage. The Court noted that the petitioner had made three requests to the respondent authority on 24.03.2021, 31.03.2021, and 15.09.2021, none of which had been responded to. Consequently, the Court directed the respondent authority to respond to the petitioner's requests within four weeks from the date of receipt of the order. The Court emphasized that the authority should decide the matter in accordance with the law without being influenced by the disposal of the petition. The decision to direct a response was solely due to the lack of any response from the authority. The merits of the petitioner's claim for re-issuance of Form 3 or the refund were expressly left undecided by the Court.
The High Court of Gujarat at Ahmedabad, after hearing the learned advocate for the petitioner for some time, noted that Mr. Patel, on instructions, sought to withdraw the petition. Consequently, the Court disposed of the Special Civil Application as withdrawn. No decision was rendered on the merits of the challenge to the Section 148 notice or the preliminary order. The operative direction was solely to dismiss the petition as withdrawn. No specific issue was expressly left undecided, as the petition itself was withdrawn before any substantive adjudication.
The High Court of Gujarat at Ahmedabad, after hearing the parties for some time, noted that the learned advocate for the petitioner, on instructions, sought to withdraw the present petition. Consequently, the Court ordered that the petition stands disposed of as withdrawn. No decision was made on the merits of the challenge to the Section 148 notice or the preliminary order. The operative direction was to dispose of the petition as withdrawn, without granting any of the substantive reliefs sought by the petitioner.
The High Court dismissed the appeal, finding no substantial questions of law arising for consideration. Regarding the first issue concerning disallowance under Section 40(a)(ia) for freight payments, the Court noted that this issue was covered by its prior decision in CIT vs. Valibhai Khanbhai Mankad. In that case, the Court had held that if the assessee obtained PAN details from transporters and furnished them with the TDS return, the claim could not be denied for non-deduction of TDS. The Tribunal's finding that the assessee had obtained PANs and furnished them with the TDS return was accepted. For the second issue regarding additional discount as godown rent and Section 194-I, the Court found the Tribunal's reasoning to be correct, stating that the assessee is required to manage its own business affairs and the manner of conducting business is for the assessee to decide. The Tribunal's rational on the discount and its holding that it did not attract Section 194-I were found to require no interference. Concerning the third issue of depreciation on a car purchased in the director's name, the Court upheld the ITAT's decision. The ITAT had held that even if the assessee was not the legal owner, it was the beneficial owner as it made the payment for acquisition and used the car for business. The ITAT drew support from decisions like ITO vs. Electro Ferro Alloys Ltd. and CIT (Appeals) vs. Mohd. Bux Shokat Ali (no.2), which allowed depreciation to the beneficial owner. The Tribunal rightly distinguished the concept of dominion ownership.
The High Court dismissed the appeal. Regarding the first issue concerning disallowance under Section 40(a)(ia) for non-deduction of TDS on transporter payments, the Court noted that the issue was covered by its earlier decision in CIT-I vs. Valibhai Khanbhai Mankad, which dealt with payments to contractors and the requirement of TDS deduction. The Court found no substantial question of law arising on this point. Regarding the second issue concerning the disallowance of commission expenses, the Court held that the AO made the disallowance based on surmises and conjectures without conducting necessary inquiries. The Court emphasized that the wisdom of hiring a commission agent and the commercial expediency of such an arrangement are for the assessee to decide, not the revenue officer. The AO's doubt alone was not sufficient for disallowing the expenses without deeper inquiry. The Court drew support from its decision in Voltamp Transformers Pvt. Ltd. vs. CIT, which held that commercial expediency and business needs should be viewed from the perspective of the business itself. The Court found no substantial question of law arising on this issue either.
The High Court of Gujarat at Ahmedabad heard the Special Civil Application. After some arguments were made by the learned advocate for the petitioner, Mr. Patel, he sought permission to withdraw the petition on instructions from his client. Consequently, the Court disposed of the petition as withdrawn. No decision was made on the merits of the challenge to the Section 148 notice or the preliminary order. The operative direction was to record the withdrawal of the petition.
The High Court held that the Tribunal had rightly dismissed the Miscellaneous Application. The Court reasoned that the original appeal was dismissed on 14.08.2019, at which time the CBDT Circular No. 23/2019 dated 06.09.2019 and Office Memorandum No. 279 dated 16.09.2019 were not in existence. Therefore, these could not have been a mistake apparent from the record at the time of the original order. Furthermore, the Court found no substance in the petitioner's submission that these subsequent circulars and memorandum had retrospective effect. The Court interpreted the Circular dated 06.09.2019 as allowing appeals on merits as an exception where the Board, by special order, directs filing of appeals in cases of organized tax evasion. The language did not suggest retrospective application. The Court agreed with the Tribunal's observation that a special order from the Board was a prerequisite for filing appeals under these provisions, and such an order was not present for the appeals dismissed on 14.08.2019. Consequently, the Tribunal did not commit any mistake apparent from the record. The petition was dismissed.
The High Court decided to dispose of the appeal based on the low tax effect, in accordance with Circular No. 17/2019. The Court noted the monetary limits for appeals before different judicial forums as per the Circular, with appeals before the High Court having a monetary limit of Rs. 1,00,00,000/-. Since the penalty involved in this appeal was Rs. 30,76,080/-, which is below the prescribed limit, the appeal was disposed of accordingly. The Court reserved liberty for the Revenue to revive the tax appeal in case of any difficulty. No specific finding on the merits of the original dispute before the ITAT was made, as the appeal was not pressed on grounds of low tax effect.
The High Court decided that the appeal was not pressed in view of the low tax effect, as per Circular No. 17/2019. The monetary limit for appeals before the High Court is Rs. 1,00,00,000/-. Since the penalty involved was Rs. 34,40,000/-, which is below the stipulated limit, the appeal was disposed of accordingly. The court reserved the liberty for the Revenue to revive the tax appeal if any difficulty arose. The ratio is that appeals below the monetary threshold specified in CBDT circulars for the respective appellate forums will not be pressed by the Revenue.
The High Court permitted the assessee to withdraw the Special Civil Application without delving into the merits of the case. The Court acknowledged the assessee's earnest request for withdrawal and the revenue's objection. Citing the decision in Sarguja Transport Service Vs. State Transport Appellate Tribunal, M.P. Gwalior & others, the Court noted that permission for withdrawal is a matter of discretion. The Court exercised this discretion by allowing the withdrawal without further challenge or permission to re-approach under Article 226. The Court explicitly stated that it did not wish to opine on the serious questions concerning CCM and alleged manoeuvring, as any findings or observations, even in rejecting the petition, could prejudice the petitioner. Therefore, to avoid such prejudice, the petition was permitted to be withdrawn without giving any reasons.
The High Court, having heard the submissions of the learned counsel for the petitioner, was disinclined to entertain the petition. Consequently, the learned advocate for the petitioner sought and was granted permission to withdraw the petition. The Court did not decide on the merits of the issues raised regarding the invocation of Section 142(2A) or the principles of natural justice. The operative direction was to dismiss the petition as withdrawn.
The High Court dismissed the appeal filed by the Revenue. While not endorsing the ITAT's broad principle that a disallowance of depreciation claim cannot give rise to concealment of income, the Court found that in the given set of facts, the ITAT was right in holding so. The Court noted that the assessee had made a complete disclosure of its claim, which was certified by a Chartered Accountant, and all necessary declarations were made. Therefore, the non-allowance of a claim on merits did not make penalty proceedings sustainable. The Court referred to the Supreme Court's decision in CIT v. Reliance Petroproducts (P) Ltd., which held that making an incorrect claim would not amount to concealment of particulars. In the absence of any furnishing of inaccurate particulars or concealment by the assessee, penalty proceedings could not be initiated. The Court emphasized that for penalty under Section 271(1)(c) to apply, there must be concealment of particulars of income or furnishing of inaccurate particulars. The Court clarified that it was not concerned with mens rea in this case but with whether inaccurate particulars were given. The Court ultimately held that the appeal deserved to be dismissed.
The Court noted that the respondent had not disposed of the objections raised by the assessee against the satisfaction notes for initiating proceedings under Section 153C. Without expressing any opinion on the correctness of the initiation of proceedings, the Court granted the assessee's request for an opportunity of hearing. The respondent authority was directed to consider and decide the objections raised by the assessee within four weeks of receiving the order. If the decision on the objections went against the petitioner, the petitioner would be granted four weeks to pursue further legal recourse. The petition was disposed of, the notice discharged, and the ad-interim relief vacated.
The High Court held that the denial of a personal hearing to the petitioner was a serious breach of statutory procedure and a violation of the rules of natural justice. The Court noted that the petitioner's request for a personal hearing was denied, and while the respondent claimed the petitioner did not follow the correct procedure for video conferencing, the Court found that the petitioner had made a specific request. The Court referred to the Apex Court's decision in M/s. Escorts Farms (Ramgarh) Ltd. vs. Commissioner, Kumaon Division, Nainital, U.P. & Ors., emphasizing that the right of hearing is valuable and its denial is a serious breach. Consequently, the Court found that the petition merits allowance not only on the ground of prejudice due to the lack of opportunity but also due to the huge additions made in the assessment order. The impugned assessment order and the consequential demand of taxes and penalty were quashed and set aside. The matter was remanded back to the Assessing Officer to grant an opportunity of personal hearing via video conferencing and thereafter pass a reasoned order in accordance with law. The petition was allowed and disposed of with this direction.
The High Court did not decide on the merits of the case. After hearing arguments from both sides for some time, the learned advocate for the petitioner sought permission to withdraw the present petition. The Court granted this request, disposing of the petition as withdrawn. Any interim relief granted earlier was vacated. The Court explicitly stated that it had chosen not to enter into the merits of the matter. Therefore, no finding was reached on the validity of the Section 148 notice or the alleged violation of natural justice. The ratio decidendi is that a party can withdraw their petition to pursue alternative remedies.
The High Court held that the assessment order passed under Section 143(3) read with Section 144B of the Income Tax Act, 1961, was liable to be quashed and set aside due to statutory non-compliance. The Court found that the respondent's claim of serving the draft assessment order dated April 12, 2021, was not substantiated by any proof of virtual exchange or an authenticated copy of service on the assessee. The absence of this crucial document on the Income Tax Department's web portal, despite other documents being present, further weakened the revenue's contention. The Court emphasized that Section 144B mandates the service of a draft assessment order when additions are likely to be made to the prejudice of the assessee. The failure to provide this opportunity, coupled with the lack of a show cause notice, constituted a breach of principles of natural justice and a disregard for statutory provisions. The Court reasoned that opportunities granted earlier in the assessment process do not absolve the revenue from the requirement of serving the draft assessment order before finalizing a prejudicial assessment. Consequently, the impugned assessment order and the demand notice were quashed. However, the revenue was granted liberty to proceed with the assessment process afresh, strictly adhering to the provisions of Section 144B, including issuing a prior notice-cum-draft assessment order and providing the petitioner with an opportunity to respond and be heard.