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539 orders · Page 4 of 11
The High Court held that the impugned notice dated 31.03.2018, issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for AY 2011-2012, is illegal and quashed and set aside. The Court reasoned that the reopening was sought beyond the period of four years from the end of the relevant assessment year. Furthermore, the reasons recorded for reopening did not demonstrate that the assessee had failed to disclose truly and fully all material facts relevant for the assessment. The Court noted that the issue of apportionment of common expenses between the exempted and non-exempted units, which formed the basis for reopening, was already considered during the scrutiny assessment under Section 143(3). The Court found that the reopening was merely a change of opinion by the AO, which is not a valid ground for reopening an assessment, especially when the original assessment had accepted the assessee's claim based on separate books of accounts and audit reports. The Supreme Court's decision in CIT v. Kelvinator of India Ltd. was cited to emphasize that a mere change of opinion cannot be a reason to reopen an assessment.
The High Court allowed the petition and quashed the impugned notice. The Court found that the facts enumerated in the reasons for reopening were derived solely from the examination of the case records. There was no tangible material available with the Assessing Officer (AO) to form an independent opinion or a reasonable belief that income chargeable to tax had escaped assessment. The assessee had provided all requested materials, including balance sheets, profit and loss accounts, and partners' capital accounts, during the original scrutiny assessment under Section 143(3). Therefore, it could not be said that the petitioner failed to disclose fully and truly all material facts. Consequently, as per the proviso to Section 147, reopening beyond four years is not permissible in the absence of such failure. The Court held that the AO cannot invoke jurisdiction for reassessment under Section 147 based on a mere change of opinion, citing the Supreme Court's decision in Commissioner Of Income Tax, Delhi vs M/S. Kelvinator Of India Ltd. The AO's belief must be based on tangible material and have a live link to the escapement of income, not on a review of the same material considered during the original assessment.
The High Court held that the impugned notice dated 30th March, 2018, issued under section 148 of the Act, was unjustified and illegal and therefore set aside. The Court reasoned that the reopening was based on an alleged mistake in the computation of tax, specifically that the assessed income was taken at Rs. 5,06,45,370/- instead of Rs. 9,63,11,400/-, resulting in an under-assessment of Rs. 4,56,66,030/-. The Court found that this was a clear error of computation, not an escapement of income. For such errors, the appropriate recourse for the AO would have been to invoke the provisions of section 154 of the Act for rectification. The Court relied on the Bombay High Court's decision in Hindustan Unilever Ltd. vs. Deputy Commissioner of Income-Tax, which held that section 154 is adequate for rectifying mistakes in assessment orders, and reopening under section 147 is not justified in such cases. Additionally, the Court noted that an appeal against the assessment order, specifically concerning the addition of Rs. 4,55,56,032/-, was pending before the CIT(A). Citing the Third Proviso to section 147 and the principle of merger, the Court held that the AO cannot reopen an assessment on a matter that is already the subject of an appeal. The Court's ratio is that reopening under section 147 is impermissible for mere computation errors, which should be addressed under section 154, and also impermissible for issues already pending in appeal due to the principle of merger.
The Tribunal held that the Assessing Officer lacked jurisdiction to issue the notice under Section 148 of the Income Tax Act, 1961, for reopening the assessment for AY 2011-2012. The Court found that the notice was issued beyond a period of four years from the end of the relevant assessment year, and crucially, there was no failure on the part of the assessee to truly and fully disclose all material facts during the original assessment. The petitioner had provided all necessary details regarding its claim for additional depreciation under Section 32(1)(iia), including statements, bills, and justifications, which were considered by the AO during the regular assessment. The alleged excess depreciation was already examined and accepted. The Court reasoned that since all material facts were disclosed and the original assessment was made after due scrutiny, the AO could not form a belief that income had escaped assessment based on the same material, thus vitiating the reopening beyond the statutory period. The consequential assessment order was also quashed.
The High Court held that the notice issued under Section 148 for reopening the assessment for AY 2013-14 was unsustainable. The Court found that the primary condition for invoking Section 147, which is the escapement of income chargeable to tax in the hands of the assessee, was not met. It was undisputed that the petitioner did not receive any amount upon the surrender of the pension policy. The policy had been assigned in a previous financial year, and the assignee, Pragnaben Parekh, had received the surrender value. Therefore, no income had accrued or been received by the petitioner that could be taxed. Furthermore, the Court noted that Section 80CCC(2) of the Act, which deems the surrender value as income, is applicable only when a deduction under Section 80CCC(1) has been claimed by the assessee in respect of the pension policy. The petitioner had not claimed any such deduction, nor was it the case of the revenue that such a deduction was claimed. Consequently, the basis for reopening the assessment was found to be without foundation in law. The impugned notice was set aside, and the petition was allowed.
The High Court held that assessment proceedings cannot be initiated against a dead person. The Court referred to its own Division Bench decision in Urmilaben Anirudhhasinji Jadeja vs. Income Tax Officer, Ward 7(1)(3) and a co-ordinate Bench decision in Chandreshbhai Jayantibhai Patel vs. Income Tax Officer. These decisions established that a notice issued to a dead assessee under Section 148 is a nullity. The Court clarified that while proceedings may be continued if legal representatives actively participate, mere intimation of the assessee's death to the assessing officer does not constitute participation. The Court specifically addressed Section 292BB of the Act, holding that it does not apply to cases where notices are issued to dead assessees, as such notices are fundamentally invalid and contrary to the intent and purpose of the Act. The Court found no facts suggesting the petitioner participated in the proceedings. Therefore, the impugned notice dated March 26, 2018, issued in the name of the deceased assessee was held to be illegal and unsustainable. The assessment order passed pursuant to it was also rendered invalid. The petition was allowed, and the notice was set aside.
The High Court held that the impugned notice dated March 28, 2018, issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for AY 2011-2012, was liable to be quashed and set aside. The Court found that the primary premise for reopening, which was that the petitioner had not filed a return of income for the relevant year, was factually incorrect. The petitioner had indeed filed a return on January 17, 2012, which was processed under Section 143(1). Furthermore, the Court noted that the AO failed to establish a live nexus between the material relied upon (information seized from M/s. K. Star Corporation) and the assessee. The petitioner had clearly stated that M/s. K. Star Corporation was an unknown entity to him and that he had no transactions with them. The AO's reliance on this information to reopen the assessment was therefore considered invalid. The Court also took note of the fact that similar reopening proceedings against a co-owner of the same property had been quashed. Consequently, the order dated November 24, 2018, of the Assessing Officer disposing of the petitioner's objections was also quashed and set aside. The petition was allowed.
The High Court held that the impugned notice dated 31.03.2018 issued under Section 148 of the Income Tax Act, 1961, for reopening the assessment for AY 2011-2012 was not tenable in law and was accordingly quashed and set aside. The Court reasoned that the issue regarding the provision for remuneration and interest to partners had already been considered during the earlier assessment proceedings. Therefore, the reopening was based on a 'change of opinion' by the Assessing Officer, which, especially beyond a period of four years, does not confer jurisdiction to reopen the assessment. The Court relied on the Supreme Court's decision in Commissioner of Income tax v. Kelvinator of India Ltd., which emphasizes that reopening after April 1, 1989, requires tangible material and cannot be based on a mere change of opinion. The Court also noted that the CIT(Appeals) had the power to address the issue of deduction under Section 10AA, including the portion related to interest and remuneration, during the earlier appeal proceedings, and nothing of that sort was done. The Court found no failure on the part of the assessee to disclose fully and truly all material necessary for assessment.
The High Court held that no substantial question of law arose in the appeal. The Court noted that the assessee had submitted crucial documents like the PAN card, ledger confirmation, its bank statement, and the bank statement of M/s. Rachna Finlease Pvt. Ltd. to prove the transaction was through banking channels. Furthermore, the assessee had demonstrated that M/s. Rachna Finlease Pvt. Ltd. had received funds from Smt. Hansaben H. Patel and Shri Rameshbhai Thakore, which was corroborated by the creditor's bank statement. The Assessing Officer's finding that the identity and creditworthiness of M/s. Rachna Finlease Pvt. Ltd. were not proved was found to be devoid of basis, as the facts established by the assessee suggested otherwise. The Appellate Tribunal had correctly observed that M/s. Rachna Finlease Pvt. Ltd. had filed its income tax return and its assessment was completed, and that once the source of funds in the hands of the creditor was explained, the amount received by the assessee from that company could not be held as unexplained under Section 68 in the absence of contrary information. The Tribunal also rightly pointed out that there cannot be an addition of one item in the hands of two different persons. The Appellate Authority and the ITAT had concurrently reversed the AO's findings, and the High Court found no merit in the Revenue's appeal.
The High Court noted that by an order of even date, passed in Tax Appeal No. 318 of 2022, the appeal filed by the Revenue on merits had been summarily dismissed. Consequently, the High Court held that the substantial question of law raised in the present appeal, concerning the reopening of assessment, was not required to be answered as it would be an academic exercise. Therefore, the appeal was disposed of by not answering the proposed question. No finding was given on the merits of whether the proceedings under Section 147 were initiated without application of mind.
The High Court decided to dispose of the appeal. The court noted that the appellant's counsel had filed a note for withdrawal of appearance, and the appellant had been intimated of the hearing but failed to appear. The court also took into consideration the order dated March 8, 2021, passed by the National Company Law Tribunal (NCLT) under Section 14 of the Insolvency and Bankruptcy Code, 2016, which declared a moratorium and prohibited the continuation of pending suits or proceedings. Given the appellant's non-representation and the statutory bar imposed by the NCLT order, the court found no purpose in keeping the appeal pending. Therefore, the appeal was disposed of.
The High Court held that the notice issued under Section 148 of the Income Tax Act, 1961, and all consequent steps and orders were liable to be set aside. The Court found that the very foundation of facts alleged for arriving at the opinion to reopen the assessment was absent. Specifically, the Court noted that on perusal of the bank statements for AY 2011-12, it was clear that there was no single entry or sum of entries indicating a credit of Rs. 10,01,500/-. Furthermore, the Court found the second reason for reopening to be factually incorrect, as the gross total receipts in the Dena Bank account were Rs. 71,93,134/-, not Rs. 71,39,134/-. The Court also observed that withdrawals and redeposits, as well as advancements and refunds of loans, were duly accounted for and offered to tax. The Court reiterated its previous decisions in Gujarat Eco Textile Park Ltd. and Inductotherm (India) P. Ltd., stating that the power to reopen assessment cannot be exercised on factually wrong premises or for mere verification of facts. The Court concluded that reopening a concluded assessment without a factual foundation is illegal and an abuse of power. Therefore, the petition was allowed, and the rule was made absolute.
The High Court noted that the appellant's counsel had filed a note for withdrawal of appearance due to the demise of the senior counsel and the need to make alternate arrangements. The court observed that the appellant was intimated of this and was also called out in open court, but there was no representation. Furthermore, the court took cognizance of the order dated 08.03.2021 passed by the National Company Law Tribunal, which declared a moratorium under Section 13(1)(a) of the Insolvency and Bankruptcy Code, 2016, and issued directions under Section 14 prohibiting the continuation of pending suits or proceedings. Given these circumstances, the court was of the opinion that keeping the appeal pending would serve no purpose. Therefore, the appeal was disposed of.
The High Court noted that the appellant's counsel had filed a note for withdrawal of appearance due to the demise of the senior counsel and the appellant's intimation to make alternate arrangements. The court observed that despite notice and the appeal being called out, there was no representation from the appellant. Furthermore, the National Company Law Tribunal (NCLT) had, by an order dated 8.3.2021, declared a moratorium under Section 13(1)(a) of the I.B. Code and issued directions under Section 14, prohibiting the continuation of pending suits or proceedings due to a statutory bar. In light of these circumstances, the court was of the opinion that keeping the appeal pending would serve no purpose. Therefore, the appeal was disposed of.
The High Court allowed the petitions, quashing and setting aside the impugned orders of the ITAT passed in the respective miscellaneous applications. The Court allowed all the miscellaneous applications, restoring the Revenue's appeals to be heard on merits expeditiously. The reasoning was that the ITAT ought not to have rejected the Revenue's Miscellaneous Application when it had sought to recall its order for not considering the acceptance of audit objections by the Revenue, which fell within the exceptions of the circular. The Court noted that the ITAT had previously reserved liberty for the department to seek recall in such cases. The Court also observed that the original dismissal order dated 14.08.2019 was passed hurriedly, within two working days of a long weekend after the circular was issued on 08.08.2019, making it difficult for the Revenue to point out all exceptions. The Court found that indulgence was a must in such circumstances, especially since the assessee respondents had not objected to the proposal for restoration at the relevant time.
The High Court allowed the petitions, quashing and setting aside the impugned orders of the ITAT passed in the respective miscellaneous applications. The Court allowed all the miscellaneous applications, restoring the Revenue's appeals to be heard on merits expeditiously. The reasoning was that the ITAT ought not to have rejected the Revenue's Miscellaneous Application when it had sought to recall its order for not considering the acceptance of audit objections by the Revenue, which fell within the exceptions of the circular. The Court noted that the ITAT had previously reserved liberty for the department to seek recall in such cases. The Court also observed that the original dismissal order dated 14.08.2019 was passed hurriedly, within two working days of a long weekend after the circular was issued on 08.08.2019, making it difficult for the Revenue to point out all exceptions. The Court found that indulgence was a must in such circumstances, especially since the assessee respondents had not objected to the proposal for restoration at the relevant time.
The High Court allowed the petitions, quashing and setting aside the impugned orders of the ITAT passed in the respective miscellaneous applications. The Court allowed all the miscellaneous applications, restoring the Revenue's appeals to be heard on merits expeditiously. The reasoning was that the ITAT ought not to have rejected the Revenue's Miscellaneous Application when it had sought to recall its order for not considering the acceptance of audit objections by the Revenue, which fell within the exceptions of the circular. The Court noted that the ITAT had previously reserved liberty for the department to seek recall in such cases. The Court also observed that the original dismissal order dated 14.08.2019 was passed hurriedly, within two working days of a long weekend after the circular was issued on 08.08.2019, making it difficult for the Revenue to point out all exceptions. The Court found that indulgence was a must in such circumstances, especially since the assessee respondents had not objected to the proposal for restoration at the relevant time.
The High Court allowed the petitions, quashing and setting aside the impugned orders of the ITAT passed in the respective miscellaneous applications. The Court allowed all the miscellaneous applications, restoring the Revenue's appeals to be heard on merits expeditiously. The reasoning was that the ITAT ought not to have rejected the Revenue's Miscellaneous Application when it had sought to recall its order for not considering the acceptance of audit objections by the Revenue, which fell within the exceptions of the circular. The Court noted that the ITAT had previously reserved liberty for the department to seek recall in such cases. The Court also observed that the original dismissal order dated 14.08.2019 was passed hurriedly, within two working days of a long weekend after the circular was issued on 08.08.2019, making it difficult for the Revenue to point out all exceptions. The Court found that indulgence was a must in such circumstances, especially since the assessee respondents had not objected to the proposal for restoration at the relevant time.
The High Court allowed the petitions, quashing and setting aside the impugned orders of the ITAT passed in the respective miscellaneous applications. The Court allowed all the miscellaneous applications, restoring the Revenue's appeals to be heard on merits expeditiously. The reasoning was that the ITAT ought not to have rejected the Revenue's Miscellaneous Application when it had sought to recall its order for not considering the acceptance of audit objections by the Revenue, which fell within the exceptions of the circular. The Court noted that the ITAT had previously reserved liberty for the department to seek recall in such cases. The Court also observed that the original dismissal order dated 14.08.2019 was passed hurriedly, within two working days of a long weekend after the circular was issued on 08.08.2019, making it difficult for the Revenue to point out all exceptions. The Court found that indulgence was a must in such circumstances, especially since the assessee respondents had not objected to the proposal for restoration at the relevant time.
The High Court allowed the petitions, quashing the ITAT's order dated 09.09.2020 that dismissed the Revenue's Miscellaneous Application. The Court held that the ITAT ought to have considered the Revenue's plea that the appeal was covered by an exception to the low tax effect circular, particularly concerning accepted audit objections. The Court noted that the ITAT's original order dismissing 628 appeals was passed hastily within two working days after the issuance of Circular No. 17/2019, making it difficult for the Revenue to identify and present all exceptions. The Court found that the Revenue had sought liberty to apply for recall in cases covered by exceptions, and this liberty was reserved in a subsequent order. Therefore, rejecting the Miscellaneous Application was improper. The Court restored the Revenue's appeals to the ITAT to be heard on merits. The ratio is that where a department raises a specific contention about an exception to a low tax effect circular before the Tribunal, and the Tribunal dismisses the appeal without dealing with that contention, the Tribunal's order can be recalled.
The High Court allowed the petitions, quashing the ITAT's order dated 09.09.2020 that dismissed the Revenue's Miscellaneous Application. The Court held that the ITAT ought to have considered the Revenue's plea that the appeal was covered by an exception to the low tax effect circular, particularly concerning accepted audit objections. The Court noted that the ITAT's original order dismissing 628 appeals was passed hastily within two working days after the issuance of Circular No. 17/2019, making it difficult for the Revenue to identify and present all exceptions. The Court found that the Revenue had sought liberty to apply for recall in cases covered by exceptions, and this liberty was reserved in a subsequent order. Therefore, rejecting the Miscellaneous Application was improper. The Court restored the Revenue's appeals to the ITAT to be heard on merits. The ratio is that where a department raises a specific contention about an exception to a low tax effect circular before the Tribunal, and the Tribunal dismisses the appeal without dealing with that contention, the Tribunal's order can be recalled.
The High Court allowed the petitions, quashing and setting aside the ITAT's impugned orders passed in the respective miscellaneous applications. The Court further allowed all the miscellaneous applications, restoring the Revenue's appeals to be heard on merits expeditiously. The reasoning was that the ITAT ought not to have rejected the Revenue's Miscellaneous Application when it had sought to recall its earlier order dated 14.08.2019. The Court noted that the ITAT's earlier order dismissing 628 appeals was passed very quickly after the issuance of CBDT Circular No. 17/2019, and it was understandable that the Revenue might not have been able to point out all exceptions in each case. The Court emphasized that the Revenue had obtained permission from the Tribunal to raise such objections, and the assessee had not objected to this proposal at the relevant time. Therefore, the ITAT should have considered the acceptance of audit objections by the Revenue and the matter falling within the exceptions of the circular, and indulgence was a must. The Court clarified that while the window is open for the Department to seek recall where objections were raised before the Tribunal and not dealt with, it is not for cases where the Department missed the bus.
The High Court allowed the petitions, quashing and setting aside the ITAT's impugned orders passed in the respective miscellaneous applications. The Court further allowed all the miscellaneous applications, restoring the Revenue's appeals to be heard on merits expeditiously. The reasoning was that the ITAT ought not to have rejected the Revenue's Miscellaneous Application when it had sought to recall its order for not considering the acceptance of audit objections, which fell within the exceptions of the circular. The Court noted that the ITAT's previous order dated 14.08.2019, dismissing 628 appeals, was passed hurriedly within two working days after the issuance of CBDT Circular No. 17/2019. The Court acknowledged that the Revenue had obtained specific permission from the Tribunal to raise such objections, and the assessee had not objected to this proposal. Therefore, indulgence was deemed necessary. The Court emphasized that while the ITAT's discretion to dismiss appeals based on monetary limits is recognized, it should consider objections regarding exceptions, especially when raised and not dealt with.
The High Court allowed the petitions, quashing and setting aside the impugned orders of the ITAT passed in the respective miscellaneous applications. The Court further allowed all the miscellaneous applications, restoring the department's appeals to be heard on merits expeditiously. The reasoning was that the ITAT ought not to have rejected the Revenue's Miscellaneous Application when it had sought to recall its order for not considering the acceptance of audit objections, which fell within the exceptions of the circular. The Court noted that the ITAT had previously clarified and permitted the Revenue to point out such cases. The Court also observed that the original dismissal order dated 14.08.2019 was passed hurriedly, within two working days of a long weekend after the circular was issued on 08.08.2019, making it difficult for the Revenue to identify all such exceptions in time. The Court found that indulgence was a must in such circumstances.
The High Court allowed the petitions, quashing and setting aside the impugned orders of the ITAT passed in the respective miscellaneous applications. The Court allowed all the miscellaneous applications, restoring the Revenue's appeals to be heard on merits expeditiously. The reasoning was that the ITAT ought not to have rejected the Revenue's Miscellaneous Application when it had sought to recall its order for not considering the acceptance of audit objections by the Revenue, which fell within the exceptions of the circular. The Court noted that the ITAT had previously reserved liberty for the department to seek recall in such cases. The Court also observed that the original dismissal order dated 14.08.2019 was passed hurriedly, within two working days of a long weekend after the circular was issued on 08.08.2019, making it difficult for the Revenue to point out all exceptions. The Court found that indulgence was a must in such circumstances, especially since the assessee respondents had not objected to the proposal for restoration at the relevant time.
The High Court allowed the petitions, quashing and setting aside the impugned orders of the ITAT passed in the respective miscellaneous applications. The Court further allowed all the miscellaneous applications, restoring the appeals of the department to be heard on merits expeditiously. The reasoning was that the ITAT ought not to have rejected the Miscellaneous Application when the Revenue had sought liberty to point out cases covered by exceptions, and this liberty was reserved in a subsequent order. The Court noted that the ITAT's initial dismissal of 628 appeals was done hurriedly within two working days of a long weekend after the circular was issued, making it difficult for the Revenue to identify and present all exceptions. The Court emphasized that since the Revenue had obtained specific permission to raise such objections and the respondents had not objected at the relevant time, indulgence was necessary. The principle is that if objections regarding exceptions to monetary limit circulars are raised and not dealt with by the Tribunal, the appeal should be restored for a decision on merits.
The High Court held that no substantial question of law arises from the order of the Appellate Tribunal. The Court found that the Tribunal had rightly confirmed the findings of the CIT(A). The Tribunal had noted that the assessee had furnished necessary documentary evidence, including ledger accounts, bank statements, income tax returns, and balance sheets. Furthermore, the loan creditors had responded to notices issued under Section 133(6) of the Income Tax Act, thereby establishing their identity. The Court also considered the fact that the loans were repaid by account payee cheques and that the assessee was not the beneficiary of the loans, which supported the genuineness and creditworthiness of the transactions. The Tribunal's reliance on the principle that once repayment is established, credit entries cannot be viewed in isolation, especially when debit entries are carried out in later years, was deemed appropriate. The Court concluded that the impugned transactions were business transactions and their genuineness could not be doubted. Therefore, the appeal was dismissed as meritless.
The High Court held that the appeal was meritless and dismissed it. The Court found that the Assessing Officer made the addition solely based on information from the Maharashtra Sales Tax Department without conducting further inquiry to ascertain if the purchases were genuine or if the assessee benefited from bogus billing. The CIT(Appeals) and the Tribunal, in concurrent findings, did not rule out the possibility of the suppliers being engaged in bogus billing. Considering the documentary evidence produced by the assessee to establish the genuineness of purchases and the Gross Profit Ratio of 3.98% for the year, they restricted the addition to 10% of the alleged bogus purchases. The Court distinguished the case of M/s N. K. Industries Ltd. by noting that in that case, material was available during a search that exposed the falsity of entries, whereas here, there was no dependable material for the AO to conclude bogus purchases warranting addition of the entire amount. Therefore, no substantial question of law arose.
The High Court held that the appeal is meritless and liable to be dismissed. The Court found that the Assessing Officer made the addition solely based on information from the Maharashtra Sales Tax Department without conducting further inquiry to ascertain the genuineness of the purchases or if the assessee was a beneficiary of bogus billing. The CIT(Appeals) and the Tribunal, considering the documentary evidence produced by the assessee to establish the genuineness of purchases, did not rule out the possibility of the three parties being engaged in bogus billing. They restricted the addition to 10% of the alleged bogus purchases (Rs. 6,45,676/-), considering the assessee's Gross Profit Ratio of 3.98%. The Court distinguished the N. K. Industries Ltd. case, stating that in that case, material found during a search exposed the falsity of entries, and the High Court had held that the entire purchase should have been added, not just 25%. In the present case, there was no dependable material for the AO to conclude that the assessee's purchases were entirely bogus. Therefore, the concurrent findings of fact by the CIT(Appeals) and the Tribunal were not found to be erroneous, and no substantial question of law arose.
The High Court held that the impugned notice dated 30.03.2021 issued under Section 148 of the Income Tax Act, 1961, was bad in law and liable to be quashed. The Court found that the Assessing Officer had previously considered the very issue regarding the treatment of profit from the partnership firm and interest expenses during the original assessment proceedings under Section 143(3). The assessment order dated 28.11.2016 also reflected consideration of these aspects. The Court emphasized the trite principle that a mere change of opinion by the Assessing Officer cannot be a ground for reopening an assessment. Since there was no new material discovered by the AO to justify the reopening, the assumption of jurisdiction was without any factual or legal basis. Furthermore, the Court noted that the powers under Section 148 were invoked after four years from the end of the relevant assessment year (2014-2015). The Court concluded that there was nothing to suggest that the assessee had failed to disclose fully and truly all material facts necessary for the assessment. Therefore, the notice was rendered invalid on this count as well. The petition was allowed, and the notice was quashed.
The High Court held that all the proposed substantial questions of law (A to K) were based on findings of fact. The Court noted that the ITAT had considered the factual aspects, submissions, and materials, including seized documents and statements. In many instances, the Tribunal had upheld the findings of the CIT(Appeals), who had deleted the additions. For example, regarding Jeera sales, the Tribunal found that the assessee was a commission agent and had offered commission income, and the reconciliation provided was accepted. Similarly, for Isabgul and other commodities, the Tribunal found no inconsistency with the CIT(Appeals)'s findings based on facts. The Court concluded that no substantial question of law arose from the impugned order of the Tribunal, as the decisions were primarily on factual appreciation. Consequently, the appeal was dismissed.
The High Court held that no substantial question of law arises from the ITAT's order. The Assessing Officer had disallowed the exemption of Rs. 3,94,375/- on long-term capital gains from the sale of shares of Radhe Developers India Ltd., considering the transaction to be bogus. However, both the Commissioner of Income Tax (Appeals) and the ITAT concurred in deleting the disallowance. The appellate authorities found that the assessee had provided evidence, including a contract note from IFCI Financial Services Limited, demonstrating that the shares were purchased for genuine investment in financial years 2004-05 and 2005-06. The ITAT noted that the period of increase in share value did not coincide with the financial year of sale by the assessee, supporting the genuineness of the investment. The court found these findings to be reasonably arrived at and supported by pertinent material, thus dismissing the appeal.
The High Court held that no substantial question of law arises from the order of the Income Tax Appellate Tribunal. The Tribunal had confirmed the view of the appellate authority, which had re-examined the issue and found that the assessee had furnished evidence to show the shares were purchased as genuine investments in the year 2000-01. The Tribunal noted that the shares were retained for a long time (more than ten years) before being sold in 2010-11, which indicated that the investment was not bogus or made in penny stock for the purpose of frequent trading. The genuineness of the investment was substantiated by the assessee's transaction statement. The findings of the appellate authority and the Tribunal were based on material before them and were considered findings of fact. Therefore, the appeal was dismissed.
The High Court of Gujarat condoned the delay of 164 days in filing the Restoration Application. The Court found that the applicant's explanation for the delay, attributing it to an oversight and the delayed notice of the dismissal order, constituted a sufficient cause. The Court reasoned that the delay was not due to any deliberate omission by the Department. Consequently, the delay was condoned, and the Rule issued in the Civil Application was made absolute. The operative direction was to proceed with the Restoration Application, implying that the merits of the Review Application would now be considered.
The High Court held that sufficient cause has been made out for condoning the delay of 164 days in preferring the Restoration Application. The Court found that the explanation provided for the delay, stating it was due to oversight and the order coming to their notice late, was acceptable. The Court reasoned that the delay was not a deliberate omission. Consequently, the delay was condoned, and the Rule was made absolute. The operative direction was to condone the delay and proceed with the Restoration Application. No issues were expressly left undecided.
The High Court held that the Tribunal was correct in dismissing the grounds challenging the reopening of assessment. The Tribunal had noted that the reasons recorded clearly mentioned that M/s. R.K. Traders was the assessee's proprietary concern, dealing with M/s. Wonder Packaging Industries, and using its business premises. The Tribunal also found that the assessee had not disclosed this income in his original return, and had opted to treat the earlier return as is when issued the notice under Section 148. The Tribunal concluded that the reopening was done with prior approval, proper satisfaction, and legally viable reasons, thus dismissing the grounds. The High Court found no legal infirmity in the Tribunal's order, particularly in light of the reasons recorded by the AO, which indicated an opinion formed after considering information from the Central Excise Department and the assessee's return, where the transactions were not ascertainable. The court distinguished the cited precedents, stating that in this case, the AO had applied his mind to the collected information and the assessee's return to form the belief that income had escaped assessment. Consequently, the appeal was dismissed.
The High Court granted permission to withdraw the Special Civil Application. The court clarified that the time spent in prosecuting the present petition would be treated as bona fide litigation and would not be counted for the purpose of limitation in the proposed appeal against the order dated September 24, 2021. The court explicitly stated that it had not expressed any opinion or gone into any aspects on the merits of the petition. The petition was disposed of as withdrawn.
The High Court allowed the petitions and quashed the impugned notices. The Court agreed with the submissions of the petitioner, finding that the ratio laid down by the Hon'ble Apex Court in Principal Commissioner of Income Tax vs. Maruti Suzuki India Ltd and by this Court in Gayatri Microns Ltd vs. Assistant Commissioner of Income Tax was applicable. The Court noted that it is an undisputed fact that Bilfinger Neo Structo Pvt Ltd merged with Neo Structo Construction Pvt. Ltd by order of the High Court of Bombay. The petitioner had specifically raised this objection. The Court further observed that a notice had already been issued to the present petitioner-company under Section 148 of the Income Tax Act for the assessment year involved. Therefore, the notice issued to the non-existent entity was quashed and set aside. The rule was made absolute to this extent.
The High Court allowed the petitions and quashed the impugned notices. The Court agreed with the submissions of the petitioner, finding that the ratio laid down by the Hon'ble Apex Court in Principal Commissioner of Income Tax vs. Maruti Suzuki India Ltd and by this Court in Gayatri Microns Ltd vs. Assistant Commissioner of Income Tax was applicable. The Court noted that it is an undisputed fact that Bilfinger Neo Structo Pvt Ltd merged with Neo Structo Construction Pvt. Ltd by order of the High Court of Bombay. The petitioner had specifically raised this objection. The Court further observed that a notice had already been issued to the present petitioner-company under Section 148 of the Income Tax Act for the assessment year involved. Therefore, the notice issued to the non-existent entity was quashed and set aside. The rule was made absolute to this extent.
The High Court allowed the petitions and quashed the impugned notices. The Court agreed with the submissions of the petitioner, finding that the ratio laid down by the Hon'ble Apex Court in Principal Commissioner of Income Tax vs. Maruti Suzuki India Ltd and by this Court in Gayatri Microns Ltd vs. Assistant Commissioner of Income Tax was applicable. The Court noted that it is an undisputed fact that Bilfinger Neo Structo Pvt Ltd merged with Neo Structo Construction Pvt. Ltd by order of the High Court of Bombay. The petitioner had specifically raised this objection. The Court further observed that a notice had already been issued to the present petitioner-company under Section 148 of the Income Tax Act for the assessment year involved. Therefore, the notice issued to the non-existent entity was quashed and set aside. The rule was made absolute to this extent.
The High Court held that the appeal was not pressed in view of the low tax effect, as per Circular No. 17/2019. The circular establishes a monetary limit of Rs. 1,00,00,000/- for appeals before the High Court. Since the amount in dispute of Rs. 88,00,000/- is below this limit, the appeal is disposed of accordingly. The court reserved the liberty for the Revenue to revive the tax appeal in case of any difficulty. The principle established is that appeals below the prescribed monetary threshold in the relevant circular are not to be pursued.
The High Court held that the impugned assessment order dated 18.08.2021 and the penalty notice dated 26.08.2021 were passed in violation of the principles of natural justice. The Court found that the respondent had not afforded the petitioner an opportunity for a personal hearing by not following the prescribed procedure laid down under Section 144B of the Act for faceless assessment. Specifically, the Court noted that the petitioner did not receive a draft assessment order along with a show cause notice as required by Section 144B(1) and Section 144B(7), which would have enabled them to provide explanations for proposed additions. The Court relied on the ratio laid down in the cited decisions of the Bombay High Court and its own previous judgments. Consequently, the petition was allowed, and the impugned order and notice were quashed and set aside. The Revenue was granted liberty to proceed with the assessment under Section 144B, ensuring an opportunity of hearing to the petitioner. The Court explicitly stated that it had not examined the merits of the case.
The High Court held that there was no legal infirmity in the impugned orders of the ITAT and CIT(Appeals). The Tribunal had arrived at a finding of fact that the assessee was required to pay excise duty of Rs. 6,51,16,385/- because in an earlier assessment year, it had wrongly availed CENVAT credit pertaining to input used for electricity generation sold to outside parties. This liability was settled during the year under consideration by utilizing CENVAT credit. The Tribunal found that the assessee followed an exclusive method of accounting, and the CENVAT credit receivable was shown in the balance sheet. Since the excise authority disallowed the CENVAT credit on fuel used for electricity supplied to outside entities, the assessee adjusted the CENVAT credit receivable against the CENVAT payable/excise duty. The Tribunal concluded that exercising the option to set off CENVAT credit against excise liability amounts to payment of excise duty. Therefore, the assessee was rightly entitled to deduction under Section 43B of the Act. The Tribunal relied on the record of CENVAT credit in the RG 23 register and the adjustment of CENVAT credit as a mode of payment under Excise Rules. Consequently, no substantial question of law arose, and the appeal was dismissed.
The High Court allowed the petition and quashed the impugned notice dated March 31, 2018, issued under Section 148 of the Income Tax Act, 1961. The Court noted that the reopening for AY 2011-2012 was based on the same grounds as for AY 2010-2011, for which the reopening notice had been quashed by a coordinate bench of the High Court, and the SLP filed by the revenue was also dismissed by the Supreme Court. The Court observed that the Assessing Officer had already examined the claim for deduction under Section 80IB(8A) in detail during the original scrutiny assessment, raising queries that were answered by the assessee. It was only after considering these documents and replies that the assessment order was framed. Therefore, issuing a notice under Section 148 after a period of four years, without any failure on the part of the assessee to disclose material facts, amounted to a mere change of opinion by the Assessing Officer. The Court found no tangible material to indicate that the Assessing Officer had any other information beyond what was already considered during the original assessment. Consequently, the reopening was held to be invalid.
The High Court of Gujarat, in its oral order, observed that it is an undisputed fact that the appeals are pending for final disposal. Based on this observation, the Court dismissed the Special Civil Application. The judgment does not delve into the merits of the petitioner's claim regarding the excess taxes paid or the maintainability of the revision petition. The dismissal is solely predicated on the pendency of appeals. Therefore, no specific finding was given on the issues raised by the petitioner. The operative direction was to dismiss the petition.
The High Court held that the impugned assessment order and demand notice were passed in violation of the principles of natural justice and without affording an opportunity of personal hearing by not following the prescribed procedure laid down in Section 144B of the Act, 1961 for Faceless assessment. It was noted that it is not in dispute that no draft assessment along with a show-cause notice, as required under Section 144B(1) and Section 144B(7), was given to the petitioner to enable her to provide an explanation for the proposed addition during a hearing before the National Faceless Assessment Centre. The Court referred to Section 144B(1)(xii), (xiv), and Section 144B(7) which mandate providing an opportunity for personal hearing, if requested and covered by the circumstances, through video conferencing. Consequently, the petition was allowed, and the impugned order and demand notice were quashed and set aside. The Revenue was granted liberty to proceed with the assessment under Section 144B after issuing a show-cause notice-cum-draft assessment order and providing an opportunity of hearing to the petitioner, to be completed within 12 weeks. The Court explicitly stated that the merits of the case were not examined.
The High Court allowed the petition and quashed the impugned notices and order. The Court held that the reopening of assessment under Section 147 was invalid as it amounted to a change of opinion. The Court noted that the Assessing Officer had issued a summons under Section 131(1A) and a notice under Section 142(1) during the original assessment, calling for details of cash deposits during the demonetisation period. The assessee had provided all required details, including bank statements, and explained the source of cash collected and deposited. The AO had considered these explanations and passed the assessment order under Section 143(3). Therefore, the reasons recorded for reopening, which relied on information already available and explained during the original assessment, were erroneous. The Court relied on its own precedents in Gujarat Power Corporation Ltd. and Swati Malove Divetia, stating that if the AO had all the material and the assessee made a full and true disclosure, reopening on the ground of escaped income due to non-disclosure is not permissible.
The Tribunal held that the Assessing Officer had examined the issue of cash payments totaling Rs. 1,82,18,581/- during the assessment proceedings. The assessee had provided a cash payment register and explained each item of proposed addition to the AO. Since the AO, after reviewing the register and explanations, did not make any addition, the Tribunal concluded that the AO had taken a possible view. Therefore, the order passed by the AO was neither erroneous nor prejudicial to the interest of the Revenue. Consequently, the Tribunal quashed the order passed by the PCIT under Section 263. The High Court, in its appeal, found no infirmity in the Tribunal's order and held that no substantial question of law arose. The operative direction was to dismiss the Revenue's appeal.
The High Court held that there was no infirmity in the impugned order passed by the Tribunal, and therefore, no substantial question of law arose. The Tribunal had allowed the assessee's appeal, finding that the Assessing Officer had made inquiries into the cash payments exceeding Rs. 20,000/-. The Tribunal noted that the assessee had furnished all necessary documents, including declarations and identity proofs of milk producers, and confirmed that these suppliers had cattle farms. The Tribunal observed that the payments were made to milk producers and that the exceptions provided in Rule 6DD(e)(ii) of the Income Tax Rules were applicable. The Tribunal concluded that the Assessing Officer's action in accepting the claim after detailed inquiry was a plausible view, and thus, the assessment order was neither erroneous nor prejudicial to the interest of the Revenue. The High Court agreed with the Tribunal's findings and the settled legal position regarding the invocation of Section 263.
The High Court held that the impugned assessment order was passed in violation of the principles of natural justice, as the prescribed procedure under section 144B of the Income Tax Act, 1961, for faceless assessment was not followed. Specifically, the Court found that no draft assessment order along with a show-cause notice, as required under section 144B(1) and section 144B(7), was provided to the petitioner to enable them to give explanations for the proposed additions during a hearing before the National Faceless Assessment Centre. The Court noted that section 144B(7) entitles the assessee to request a personal hearing in case of prejudicial variations proposed in the draft assessment order, which, if approved, must be conducted exclusively through video conferencing. The Court applied the ratio of the cited judgments from the Bombay High Court and its own previous decisions. Consequently, the impugned assessment order and demand notice were quashed and set aside. The Revenue was granted liberty to proceed with the assessment under section 144B after issuing a show-cause notice-cum-draft assessment order, providing an opportunity of hearing to the petitioner, to be completed within 12 weeks.