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539 orders · Page 7 of 11
The High Court directed the Principal Commissioner of Income Tax, Ahmedabad, to consider the representation filed by the writ applicants dated February 13, 2021, within 15 days from the date of the order. The Commissioner was instructed to provide an opportunity for a personal hearing, if necessary, and pass an appropriate order in accordance with the law by May 31, 2022. The Court noted that if the order is adverse to the writ applicants, they have the liberty to challenge it before the appropriate forum. Furthermore, the applicants were also permitted to question the legality and validity of the seizure itself before the Principal Commissioner. The Court did not decide on the merits of the seizure or the ownership of the jewellery but remanded the matter for a fresh decision by the concerned authority.
The High Court held that none of the questions of law proposed by the Revenue were substantial questions of law. The Tribunal, in its order, noted that the AO had made an addition on account of scrap sales, believing the assessee had sold scrap out of books. The CIT(A) had deleted this addition after the assessee demonstrated that scrap was melted and converted into sheets for manufacturing SS Washers, providing supporting documents. The ITAT had initially set aside the CIT(A)'s order to allow the AO to comment on the materials. However, upon re-examining the assessment order, the Tribunal found it to be lacking in analysis and investigation, merely reproducing documents. The CIT(A) had also noted that the AO had used harsh language without examining the submitted documents. The Tribunal, after considering the well-reasoned findings of the CIT(A), found no merit in the Revenue's appeal. The High Court agreed with the Tribunal's assessment that the proposed questions did not constitute substantial questions of law.
The Tribunal held that the assessee was entitled to the deduction under Section 80IB(10). Regarding the first issue, the Tribunal noted that the assessee had completed the entire project before March 31, 2012, and had applied for BU permission for all units. Although permission was not received for all units by the due date, subsequent permissions were granted after the jurisdictional dispute was resolved, and the AMC certified the project's completion before the due date. The Tribunal found that the CIT(A) had given flawless findings on this aspect, and the Revenue had not controverted this fact. For the second issue concerning the delay in filing the return, the Tribunal found that the assessee was required to obtain a Transfer Pricing report in Form 3CEB due to international transactions. Consequently, the assessee was eligible for the extended due date for filing its return of income under Section 92E. The High Court found no error in the Tribunal's affirmation of the CIT(A)'s order and dismissed the Revenue's appeal.
The High Court held that an order passed under Section 127 of the Income Tax Act, 1961, is primarily administrative in nature, not quasi-judicial. The assessee does not have a right to choose their Assessing Authority, and no prejudice is caused by the transfer. The court found that there was sufficient material on record to show a nexus between the writ applicant and the related entities, justifying the transfer for effective and coordinated investigation. The court observed that the decision to transfer rests with the Commissioner, and in this case, the Commissioner was satisfied that the transfer was warranted. The court found no patent error of law or error apparent on the face of the record, and the impugned order was not considered ex facie perverse. Therefore, the court declined to interfere with the transfer order.
The High Court held that the reopening of assessment initiated by issuing a notice under Section 148 of the Income Tax Act, 1961, to a deceased person is void-ab-initio. The Court reasoned that a valid notice under Section 148 is a condition precedent for the Assessing Officer (AO) to assume jurisdiction for assessment or reassessment under Section 147. Issuing a notice to a deceased person is equivalent to no valid notice in the eyes of law, rendering it a nullity that affects the AO's inherent jurisdiction. The Court distinguished this from curable procedural irregularities, stating that the absence of a valid notice makes the assessment invalid and without jurisdiction. Consequently, the impugned notice dated March 31, 2021, and all consequential proceedings and orders passed thereon were quashed and set aside. The writ application was allowed to this extent.
The High Court, while hearing the Special Civil Application, acknowledged that the Principal Commissioner of Income Tax had partially accepted the assessee's plea by reducing the demand from 20% to 10% of the total demand. The Court found no reason to interfere with this finding. However, regarding the second prayer for early disposal of the appeal, the Court found it to be meritorious. The Court noted that the assessee had pleaded before both the Assessing Authority and the Appellate Authority that their case was similar to another assessee who had received a similar benefit. Therefore, the appellate authority would need to examine this aspect on merits while adjudicating the appeal. The Court directed the 3rd respondent-appellate authority to hear, adjudicate, and dispose of the appeal expeditiously, at any rate, within three months from the date of the order. The petitioner was permitted direct service, and the Additional Solicitor General was directed to forward a copy of the order to the jurisdictional appellate authority for compliance.
The High Court held that the issuance of a show cause notice along with the draft assessment order is a mandatory prerequisite before passing an order under Section 144B of the Income Tax Act, 1961. It was undisputed that in this case, no show cause notice was issued along with the draft assessment order. Consequently, the final assessment order was deemed to be passed without jurisdiction. The Court found that the matter should be remitted to the Assessing Officer for de novo proceedings. The impugned assessment order dated 30.07.2021 for AY 2018-19 was quashed and set aside. The Assessing Officer was directed to issue a show cause notice along with the draft assessment order, allowing the writ applicant to respond. A fresh assessment order was to be passed after giving due opportunity of hearing. No issue was expressly left undecided.
The High Court held that the notice dated March 27, 2018, issued under Section 148 of the Income Tax Act, 1961, for AY 2011-12, was legal and valid. The Court found that the reopening was based on tangible material that was not in the possession of the Assessing Officer during the original assessment proceedings. This material, discovered during survey proceedings under Section 133A, indicated potential escapement of income. The Court emphasized that at the stage of validity of the notice under Section 148, the inquiry is limited to whether there were reasonable grounds for the Assessing Officer to believe that income had escaped assessment, not whether the escapement was definitively established. The Court found no non-application of mind by the Assessing Officer and that there was a live link between the material and the alleged escaped income. The Court rejected the assessee's submission that the reopening was based on a mere change of opinion. The application was dismissed.
The High Court held that the notice issued under Section 148 was valid. The Court reasoned that the original assessment was finalized on March 28, 2016, while the survey action and the recording of Shri Bijal Ashok Shah's statement, admitting to providing accommodation entries and naming the assessee as a recipient, occurred on January 14, 2017. This new information, which was not before the Assessing Officer during the original assessment, constituted tangible material. The Court emphasized that at the stage of validity of a notice under Section 148, the inquiry is limited to whether there were reasonable grounds for the Assessing Officer to believe that income had escaped assessment, not whether the escapement was definitively established. The Court found that there was no total non-application of mind by the Assessing Officer and that his belief was based on tangible material with a live link to the escaped income. Therefore, the writ application was rejected.
The High Court held that the notice issued under Section 148 for reopening the assessment for AY 2011-12 was valid. The Court found that the Assessing Officer had not applied his mind in a arbitrary manner. The CIT(A)'s order for AY 2012-13 provided tangible material, directing reallocation of profits from KKP Township Project (Rs. 6,99,23,438/-), Global City Project (Rs. 4,04,57,442/-), and unexplained investment in Plot No. 409 (Rs. 24,33,308/-) to AY 2011-12. These facts were not before the AO during the original assessment under Section 153A. The Court reiterated that at the stage of validity of a notice under Section 148, the inquiry is limited to whether there were reasonable grounds for the AO to believe that income had escaped assessment, not whether the escapement was established. The AO's belief was based on sufficient material and had a live link to the escaped income, thus rejecting the argument of a mere change of opinion.
The High Court held that none of the questions proposed by the Revenue could be considered substantial questions of law. The Court noted that the Tribunal had recorded findings of fact on both issues: the deletion of unaccounted brokerage of Rs. 68 Lakh and the addition of Rs. 3 Crore based on the assessee's retracted statement under Section 131. The Court reviewed the Tribunal's reasoning from paragraph 4.4 to 11.9 concerning the Rs. 68 Lakh addition and from paragraph 17 onwards regarding the Section 131 statement. Finding no substantial question of law arising from the Tribunal's order, the Court dismissed the appeals. No specific issue was left undecided; the Court found no merit in the proposed questions.
The High Court held that all the questions proposed by the Revenue were essentially questions of fact and not substantial questions of law. Therefore, the Court found no grounds to interfere with the ITAT's order. The reasoning was that the ITAT's observations indicated that the disputes revolved around factual appreciation of evidence, such as the nexus of expenses with withdrawals, admissions made during statements, the identity of individuals mentioned on bills, and the interpretation of seized documents. Since the proposed questions did not raise any significant legal principle or interpretation of law, they did not qualify as substantial questions of law required for an appeal under Section 260A. Consequently, the appeal was dismissed without delving into the merits of each addition. No specific issue was left undecided; rather, the entire appeal was disposed of on the preliminary ground of it not raising substantial questions of law.
The Tribunal held that the seized document, which was signed by all partners and three witnesses, clearly indicated withdrawals from the partnership firm. While withdrawals generally represent capital contributions or profits/remuneration/interest due to partners, these transactions were not reflected in the firm's financial statements or the partners' capital accounts. The Tribunal relied on Section 292C of the Act, which presumes the contents of seized documents to be true, and stated that the onus was on the assessee to rebut this presumption with documentary evidence. Since the assessee failed to provide evidence that these withdrawals were personal settlements and not unaccounted income of the firm, and also failed to show them reflected in individual partner accounts, the Tribunal confirmed the addition. The High Court found that the ITAT's findings were based on material on record and did not raise substantial questions of law, thus dismissing the appeal.
The High Court held that none of the questions proposed by the Revenue could be termed as substantial questions of law. The Court noted that the Tribunal had recorded findings of fact on both issues: the deletion of unaccounted brokerage of Rs. 68 Lakh and the addition of Rs. 3 Crore based on the assessee's statement under Section 131 of the Income Tax Act, 1961, which was later retracted. The Court reviewed the reasoning adopted by the Tribunal in its impugned order. Since the Court found no substantial question of law arising from the Tribunal's order, it dismissed the appeals. The operative direction was the dismissal of the appeals.
The High Court held that the assessment order dated 17.09.2021, and the penalty notice dated 17.09.2021, were quashed and set aside. The Court found that the provisions envisioned for transparency and accountability in the faceless assessment regime were not observed as contemplated by law. The Court noted that while the petitioner requested a video conference hearing, the process was flawed, with the petitioner unable to activate the necessary hyperlinks and the conducted hearing being abruptly terminated. The Court emphasized that an opportunity for hearing, once provided, must be given in its true spirit and cannot be a mere formality. The Court declined to enter into the merits of the case, reserving those for adjudication by the Income Tax Authorities. The matter was to proceed from the stage of availing the opportunity of hearing through video conference, with the entire process to be completed within a stipulated timeframe. The Court directed that any fixed deposits maturing before the passing of the order should not be withdrawn by the respondents.
The High Court held that the impugned orders in Form GST-DRC-07 dated December 18, 2021, and December 27, 2021, passed by the Assistant Commissioner of State Tax, Division-3, Gandhinagar, were indeed non-speaking orders. The court noted the fair submission by the learned AGP for the respondents acknowledging this fact. Consequently, the High Court quashed and set aside both impugned orders. The matter was remitted back to the Assistant Commissioner of State Tax, Division-3, Gandhinagar, for a fresh hearing. The Assistant Commissioner was directed to ensure that a reasoned order is passed, addressing each and every submission made by the writ applicants, including oral and written submissions. The writ applicants were also permitted to question the legality and validity of the show cause notices themselves during the fresh hearing. The entire exercise was to be completed within three months from the date of the order. The interim relief granted earlier stood vacated.
The High Court held that the seized gold jewellery weighing 524.500 grams should be released in favour of the writ applicant. The Court noted that the CIT(A) had found that the applicant had purchased the gold from M/s. Parv Kundan and Diamonds Private Limited, made payment through banking channels, and duly accounted for the purchase in his books of accounts. This finding of fact by the CIT(A) had attained finality as the Revenue did not challenge it before the appellate Tribunal. The Court further observed that even if M/s. Parv Kundan and Diamonds Private Limited denied the transaction, it would not affect the applicant's case as the purchase was recorded in his books and payment was made through banking channels, thus not being an unaccounted transaction. Consequently, the Revenue could not withhold the seized gold jewellery. The writ application was allowed, and the respondent was directed to accord approval for the release of the seized gold jewellery.
The High Court disposed of the writ application by issuing a direction to Respondent No. 1, the Principal Chief Commissioner of Income Tax. The direction was to take up the application filed by the writ applicant dated 16.02.2022 and dispose of the same in accordance with law. This disposal was mandated to be completed on or before 10.03.2022. The Court found merit in the assessee's plea due to the imminent deadline for filing the income tax return for Assessment Year 2021-22. The principle established is that statutory authorities should act expeditiously on applications when their delay could prejudice the assessee's ability to comply with statutory obligations, especially when such applications are filed under provisions like Section 119(2)(b) which deal with condonation of delays or extension of time. No issue was left undecided; the Court granted the primary relief sought by the assessee.
The High Court declined to grant any relief to the writ-applicant and rejected the writ-application. The Court found no fault with the department for refusing to release the seized amount or the subsequent refund. The Court reasoned that declaring the income in the case of the writ-applicant as not taxable would not automatically result in the refund of seized cash, which had been realized from the searched person. The Court emphasized that prerogative writs under Article 226 are discretionary and should only be issued in grave cases of jurisdictional error, violation of natural justice, or manifest injustice. Citing precedents like Sangram Singh and M. Padmanabha Iyengar, the Court stated that it would not act as a court of appeal to set right mere errors of law that do not occasion substantial injustice. The Court found no irregularity or illegality in the Assessing Officer's order treating the seized cash as 'unaccounted income' in the hands of Bhuraram Patel, nor in the penalty order or the adjustment of seized cash towards it. Therefore, the Court held that the writ-applicant was not entitled to the refund.
The High Court held that the writ application is rendered infructuous, nonest, and disposed of as abated due to the National Company Law Tribunal's order approving the resolution plan for the writ applicant company. The Court relied on the Supreme Court's decision in Ghanshyam Mishra & Sons Pvt. Ltd. vs. Edelweiss Asset Reconstruction Company Ltd., which clarified that the 2019 amendment to Section 31 of the Insolvency and Bankruptcy Code, 2016, is clarificatory and declaratory, having retrospective operation. Consequently, upon the approval of a resolution plan by the NCLT, claims not part of the plan are extinguished, and related proceedings are terminated. The Court explicitly stated that it had not expressed any opinion on the merits of the case. However, it reserved liberty in favour of the revenue department to file appropriate proceedings or an appeal under Section 61 of the Insolvency and Bankruptcy Code, 2016, before the National Company Law Appellate Tribunal, if dissatisfied with the sanctioning of the resolution plan.
The High Court held that the assessee's claim for deduction under Section 80IA(4) could not be accepted dehors the statutory provision of Section 80A(5) of the Act. The court found that Section 80A(5) mandates that if an assessee fails to make a claim for deduction in its return of income, it would not be granted. This restriction attaches to the assessee's claim and must be implemented by the Assessing Officer, PCIT, or Appellate Tribunal. The court rejected the argument that Section 80A(5) only restricts the Assessing Officer's power and not that of the Commissioner. The court stated that the width of the PCIT's powers under Section 264 would not permit him to ignore the requirement of Section 80A(5) or allow a claim in breach of its conditions. The court also noted that the assessee had given up the challenge to the constitutionality of Section 80A(5), thus it had to be enforced as it stands. The writ petition was dismissed.
The High Court disposed of the writ application by issuing directions. The Court directed the jurisdictional Assessing Officer to decide the assessee's application dated April 12, 2021, for releasing the pension account within two weeks of receiving the writ. The Court also permitted the assessee to file an appropriate application before the Commissioner of Income Tax (Appeals) [CIT(A)] for a stay of demand. The Court noted that the CIT(A) has inherent power to pass interim orders, including stay of recovery, pending appeal. If the CIT(A) grants relief subject to conditions, the attachment orders of the bank accounts would automatically cease to remain in operation. The Court did not decide the merits of the assessment or the attachment orders themselves but facilitated procedural remedies.
The High Court held that statements recorded under Section 108 of the Customs Act, 1962, are material pieces of evidence and can be considered substantive evidence to connect an individual with the contravention of the Act. The Court found that the Tribunal had not examined the Order in Original in the required manner and failed to look into the cogent evidence on record to justify the Commissioner's crucial findings. The High Court concluded that the Tribunal's findings of fact were in complete disregard to the evidence, making them perverse and unreasonable. Therefore, the High Court did not feel bound by the Tribunal's findings. The Court held that the Tribunal committed an error in disturbing the order passed by the adjudicating Commissioner. The substantial question of law was answered in favour of the Revenue. The impugned order of the Tribunal was quashed and set aside.
The High Court held that the impugned notices issued under Section 148 and the subsequent proceedings initiated under Section 142(1) against the deceased assessee are not tenable in law and are liable to be quashed and set aside. The court relied on its own decision in Chandreshbhai Jayantibhai Patel Vs. Income Tax Officer, which distinguished between clauses (a) and (b) of sub-section 2 of Section 159 of the Act. The court found that the present case did not fall under clause (a) as the notice was issued to the deceased, not the legal representative. Crucially, the petitioner had not submitted to the AO's jurisdiction by filing a return in response to the invalid notices, nor had the AO issued notices to the petitioner as the legal representative. Therefore, the notices were considered invalid, and the AO lacked the jurisdiction to proceed. The court noted that Section 292B of the Act would not be attracted as the legal representative had not waived their right to a valid notice and had objected to the proceedings. The impugned notices were quashed, and consequential proceedings terminated.
The High Court held that statements recorded under Section 108 of the Customs Act, 1962, are substantive evidence and can be used to connect an individual with the contravention of the Act. The Tribunal, as the fact-finding authority, had failed to properly examine the Order in Original and the cogent evidence on record. The Court found that the Tribunal's findings were in complete disregard of the evidence, making them perverse. Therefore, the High Court did not consider itself bound by the Tribunal's findings. The Court concluded that the Tribunal committed an error in disturbing the order of the adjudicating Commissioner. The substantial question of law was answered in favour of the Revenue.
The High Court noted that the writ application was filed when the assessee's objections to the reasons for reopening under Section 153C had not been considered by the Assessing Officer. A previous order had directed the AO to consider these objections. On the current date of hearing, both parties jointly stated that the AO had since considered the objections and passed an order disposing of them. In light of this development, the assessee's counsel sought to withdraw the writ application with liberty to file a fresh one after examining the AO's order. The Court disposed of the writ application as not pressed at this stage, granting the liberty sought. The interim order preventing the final assessment order was extended for two more weeks.
The High Court noted that the writ application was filed when the assessee's objections to the reasons for reopening under Section 153C had not been considered by the Assessing Officer. A previous order had directed the AO to consider these objections. On the present date, both parties jointly informed the Court that the AO had indeed considered the objections and passed an order disposing of them. Consequently, the assessee's counsel sought to withdraw the writ application with liberty to file a fresh one after examining the AO's order. The Court disposed of the writ application as not pressed at this stage, granting the liberty sought. An interim order preventing the passing of a final assessment order was extended for two more weeks. The specific findings on the merits of the objections or the reopening itself were not addressed as the matter was withdrawn.
The High Court held that the provisional attachment of the subject land under Section 281B of the Income Tax Act, 1961, was not sustainable in law. The Court emphasized that Section 281B explicitly provides for the provisional attachment of property belonging to the assessee. In this case, the property in question, Block No.142, was indisputably owned by the writ-applicant partnership firm, Raghunandan Enterprise, and not by the individual assessee, Arnav Savaliya. The Court clarified that even if Arnav Savaliya had an interest in the land as an assignee of profit share, this did not make the land his property for the purpose of attachment under Section 281B. The Court distinguished this situation from a sub-partnership, noting that Arnav Savaliya was an assignee entitled to receive profit share, not a sub-partner. Consequently, the writ-application was allowed, and the impugned order of provisional attachment was quashed and set aside to the extent it included the subject land. The attachment of other properties owned by Arnav Savaliya remained unaffected. Any mutations in revenue records resulting from the attachment were also to be corrected.
The High Court decided not to adjudicate the writ applications on merits. Instead, it disposed of all three writ applications with a direction to the Commissioner of Income Tax (Appeals) - CIT(A) - to take up all interim applications filed by the writ applicants and pass an appropriate order in accordance with the law. The Court emphasized that until the CIT(A) decides these applications, the interim order previously passed by the High Court would continue. The Court also noted that the CIT(A) should consider the principles of law explained in the case of Harsh Dipak Shah vs. Union of India, which held that the CIT(A) possesses inherent power to grant a stay against the recovery of disputed demand pending the final disposal of the appeal, as these powers are implied and necessary for the appellate authority to effectively exercise its jurisdiction under Section 251 of the Act. No specific issue was left undecided, but the primary relief sought (stay of demand) was deferred to the CIT(A).
The High Court decided not to adjudicate the writ applications on merits. Instead, it disposed of all three writ applications with a direction to the Commissioner of Income Tax (Appeals) - CIT(A) - to take up all interim applications filed by the writ applicants and pass an appropriate order in accordance with the law. The Court emphasized that until the CIT(A) decides these applications, the interim order previously passed by the High Court would continue. The Court also noted that the CIT(A) should consider the principles of law explained in the case of Harsh Dipak Shah vs. Union of India, which held that the CIT(A) possesses inherent power to grant a stay against the recovery of disputed demand pending the final disposal of the appeal, as these powers are implied and necessary for the appellate authority to effectively exercise its jurisdiction under Section 251 of the Act. No specific issue was left undecided, but the primary relief sought (stay of demand) was deferred to the CIT(A).
The High Court decided not to adjudicate the writ applications on merits. Instead, it disposed of all three writ applications with a direction to the Commissioner of Income Tax (Appeals) - CIT(A) - to take up all interim applications filed by the writ applicants and pass an appropriate order in accordance with the law. The Court emphasized that until the CIT(A) decides these applications, the interim order previously passed by the High Court would continue. The Court also noted that the CIT(A) should consider the principles of law explained in the case of Harsh Dipak Shah vs. Union of India, which held that the CIT(A) possesses inherent power to grant a stay against the recovery of disputed demand pending the final disposal of the appeal, as these powers are implied and necessary for the appellate authority to effectively exercise its jurisdiction under Section 251 of the Act. No specific issue was left undecided, but the primary relief sought (stay of demand) was deferred to the CIT(A).
The High Court held that it cannot entertain a writ petition under Article 226 of the Constitution of India when an efficacious alternative remedy by way of statutory appeal, as provided under the Income Tax Act, has not been availed and has become time-barred. The Court referred to Supreme Court decisions, including one that found premises in a larger bench decision of the Gujarat High Court to be fallacious. The Court reasoned that entertaining a writ petition beyond the statutory period of limitation would disregard the legislative intent and the mechanism prescribed by the statute. Therefore, the petition failed on the preliminary objection of maintainability due to delay and latches in pursuing the statutory remedy. The Court explicitly stated that it had not gone into the merits of the impugned order. It was open for the writ applicant to approach any other forum under the statute in accordance with law.
The High Court declined to answer the substantial questions of law framed at the time of admission. The Court noted that the assessee had already filed an application before the ITAT invoking the proviso to Rule 24 of the Income Tax (Appellate Tribunal) Rules, 1963, seeking to set aside the ex parte order due to sufficient cause for non-appearance. The Court directed the ITAT to take up this application for hearing and pass an appropriate order in accordance with law at the earliest. The Court stated that it should not interfere with the impugned order solely on the ground that this application is pending. If the application is rejected by the ITAT for good reason, the assessee may then avail appropriate legal remedies. The ITAT's order was effectively left to be decided based on the pending application under Rule 24.
The High Court held that the ITAT was justified in deleting the penalty under Section 271(1)(c). The Tribunal had noted that the survey was conducted before the financial year ended, and there was ample time for filing the return. The assessee subsequently incorporated the admitted income during the survey into its computation of income. Crucially, the AO accepted the returned income while finalizing the assessment under Section 143(3), meaning there was no addition or disallowance to the assessee's total income during assessment proceedings. The Tribunal reasoned that the AO was not justified in invoking penalty proceedings for concealment or furnishing inaccurate particulars when the income was disclosed and accepted. The presumption that the assessee might not disclose income in the future was considered mere suspicion without basis. The High Court, in view of the ITAT's findings and referencing its own prior decisions in similar fact patterns (Principal Commissioner of Income Tax-3 Vs. R. Umedbhai Jewellers Pvt. Ltd. and Deepak Construction Co.), found no reason to disturb the ITAT's order. The appeal was dismissed.
The High Court held that the appeal did not involve any substantial question of law. Regarding the ISO certification expenditure, the Court agreed with the CIT(A) and ITAT that it was revenue expenditure. The reasoning was that such expenditure facilitates the carrying on of business more efficiently and profitably without touching the fixed capital, even if it creates a positive image. The Court found that the payment for ISO certificates did not add to the fixed capital. Concerning the subsidy of Rs. 3.87 crore, the Court found that the CIT(A) and ITAT had rightly treated it as capital in nature. The Court noted that documentary evidence, including a letter from the Government of India, indicated the subsidy was for administrative expenses incurred during the execution of a project for upgrading infrastructure facilities. The Court found no error in the ITAT's and CIT(A)'s concurrent findings and saw no contravention of Section 43(1) or its Explanation 10. Therefore, the appeal was dismissed.
The High Court held that the substantial questions of law raised in the appeal were no longer res integra. This was in view of the Court's own decision in the case of Ahmedabad Urban Development Authority Vs. ACIT (Exemption) reported in (2017) 396 ITR 323 (Gujarat). The Court found that the issues had already been decided by it. Consequently, the appeal filed by the Revenue was dismissed. The judgment does not provide specific findings on each of the proposed questions of law individually, but rather disposes of the entire appeal based on the precedent established by the Court in the cited case. The operative direction is the dismissal of the appeal.
The High Court held that the Appellate Tribunal did not err in law or fact. Regarding the first issue, the Court agreed with the Tribunal that the reassessment proceedings under Section 147 read with Section 148 were initiated without jurisdiction, as the reasons for reopening were already examined during the original assessment, and no new tangible material was brought on record. The Court found no perversity in the Tribunal's finding that it was a case of 'change of opinion'. Concerning the second issue, the Court found that the CIT(A) and the Appellate Tribunal had elaborately discussed the supporting evidence for the share transactions, including applications, share certificates, ROC filings, PAN cards, and banking transactions. The Court agreed that these documents clearly established the genuineness of the transactions. The Revenue failed to produce any contrary evidence to discard the documentary evidence presented by the assessee. The Court also noted that the AO had been satisfied with the genuineness of these transactions during the original assessment. Furthermore, the Court observed that even if the transactions were considered, amendments to Sections 50CA and 56(2)(x) (applicable from April 1, 2018, and April 1, 2017, respectively) indicate that tax liability, if any, would arise in the hands of the recipient, not the transferor. Therefore, the appeal was dismissed.
The High Court held that the issuance of fully paid-up shares to ICICI Ltd. in lieu of accumulated interest of Rs. 2,70,00,000 effectively extinguished the liability. The Court agreed with the concurrent findings of the CIT(A) and ITAT that this was not a case of converting outstanding interest into a loan, which would necessitate actual payment. Instead, the Court found that the liability was discharged in the year under consideration by offering shares, as acknowledged by ICICI Ltd. through a receipt. Therefore, Section 43B was held to be attracted. The Court concluded that the question of law raised by the department did not involve a substantial question of law, as the issue was no longer res integra and the concurrent findings of the lower authorities were based on facts. Consequently, the appeal was dismissed.
The High Court, having considered the affidavit filed by the respondents and the assurances given by senior officials from the Income Tax Department, concluded that no further adjudication was required. The Court appreciated the efforts made by the CBDT to mitigate the hardships faced by assessees due to technical glitches. The Court noted the creation of a dedicated email ID for Tax Audit Report filing issues and suggested a similar mechanism for Income Tax Returns, which was accepted. The Court was convinced that the issues regarding technical glitches in the Income Tax Portal had been resolved through the cooperative efforts. However, the Court explicitly stated that it did not intend to look into the controversy regarding the levy of interest under Section 234A, as a separate writ application on this specific issue was already pending before the High Court. The Court closed and disposed of both writ applications based on the assurances and actions taken by the respondents.
The High Court disposed of the writ petition by directing the assessee to file an appropriate application in writing to the Chief Commissioner of Income Tax under Section 119(2)(b) of the Act. The Court advised the Chief Commissioner to consider the application expeditiously and exercise discretion in accordance with the law, particularly keeping in mind the object of Section 119(2)(b), which is to avoid genuine hardship. The Court also suggested that the Chief Commissioner should consider the hardship the assessee might face if not permitted to file Form 10-IC electronically. The Court noted that if recovery steps are initiated, the assessee can request the Assessing Officer to keep the demand in abeyance until the application under Section 119 is decided. The Court did not decide on the merits of the assessee's claim for Section 115BAA benefits but provided a procedural route for seeking condonation of delay.
The High Court held that a reopening notice issued in the name of a dead person is not a valid notice in the eyes of law. The Court relied on its prior decision in the case of Bharti Harendra Modi Vs. Income Tax Officer, Ward 3(1)(2), Vadodara, which established this legal position. Consequently, the writ application was allowed. The impugned notice dated March 30, 2021, and all subsequent consequential notices, along with the proceedings initiated pursuant thereto, were quashed and set aside. The Court also noted that a fresh notice issued against the deceased assessee on the previous day was also to be ignored as invalid. The ratio decidendi is that statutory notices under the Income Tax Act must be issued to living assessees or their legal representatives, and a notice to a deceased person without proper substitution is a nullity.
The High Court declined to exercise its extraordinary jurisdiction under Article 226 of the Constitution of India. The primary reason for this decision was that the order passed by the Principal Commissioner of Income Tax under Section 263 of the Income Tax Act, 1961, is an appealable order before the Income Tax Appellate Tribunal. The Court found this to be a sufficient ground to dismiss the writ application. The Court disposed of the writ application on this short point, reserving the liberty for the writ applicant to file an appeal before the Income Tax Appellate Tribunal. The Court also noted that if an appeal is filed, any delay caused by filing the writ petition first should be condoned. All questions of law were left open for both sides to raise before the Appellate Tribunal.
The High Court declined to interfere with the impugned communication dated 24.11.2020. However, it granted liberty to the Revenue to challenge the main order of the Settlement Commission dated 23.02.2018 by availing appropriate legal remedies. The Court clarified that it had not expressed any opinion on the merits of the case. If the main order is challenged, both parties would be free to raise all legal contentions. The reasoning was that while the communication itself might not be the subject of a writ, the underlying order of the Settlement Commission could be challenged through proper channels. The Court acknowledged the complexity of the issue and the arguments presented but chose not to adjudicate on the merits within the writ petition concerning the subsequent communication. The Settlement Commission's disbandment was also noted.
The High Court decided to relegate the writ applicant to submit its objections to the reasons for reopening. The Court noted that while the Revenue claimed reasons were uploaded on the ITBA portal on June 10, 2021, and the notice dated June 18, 2021, referred to issues as per reasons recorded, there was a controversy regarding the actual service of these reasons. To balance equity, the Court permitted the applicant to approach the respondent authority and submit objections against the reasons for reopening, along with necessary documents, within two weeks of receiving the order. The respondent authority was directed to consider these objections and decide in accordance with the law. The Court explicitly clarified that it had not gone into the merits of the legality or validity of the impugned notice. The petition was disposed of in these terms.
The High Court allowed the writ application, quashing the notice dated 31.03.2018 under Section 148 and the final assessment order dated 25.09.2021. The Court relied on the ITAT's decision in the related appeal concerning the partnership firm. The ITAT had held that the partnership deed's clauses regarding remuneration and interest on capital were enabling and not mandatory. It found that the conduct of the partners suggested an agreement not to claim such remuneration/interest in the firm's profit and loss account. Consequently, the ITAT held that the CIT(A) erred in directing the AO to tax the remuneration and interest in the hands of the partners, setting aside the CIT(A)'s order and directing the AO to make additions in terms of the ITAT's findings. The High Court concluded that in view of the ITAT's findings, nothing survived in the present matter concerning the reopening of the partner's assessment. The Court also noted that a co-ordinate bench had directed that no coercive action would be taken, and since a final order of assessment was passed despite this, it also had to be quashed.
The Tribunal held that the assessment order dated 12.08.2021 was passed in clear violation of the statutory scheme under Section 144B of the Income Tax Act, 1961. The assessee had made specific requests for a personal hearing through video conference, which were not adhered to by the respondent authorities. The Court noted that Section 144B mandates faceless assessment and incorporates the principles of natural justice, including the opportunity for hearing. The judgment cited decisions from the Delhi High Court in Sanjay Agrawal vs. National Faceless Assessment Centre, Delhi, and the Bombay High Court in M/s. Parimal Enterprise Ltd. Vs, Addl. Commissioner of Income Tax, which were followed by this Court in Agrawal JMC Joint Venture Vs. Assistant/Joint/Deputy/Assistant Commissioner of Income Tax/Income Tax Officer. These precedents establish that any order passed in violation of the statutory procedure prescribed under Section 144B makes the order vulnerable as it violates the rules of natural justice. Consequently, the assessment order was held to be null and void and was quashed and set aside. The matter was remanded back to the Assessing Officer to grant an opportunity of personal hearing by way of video conference, with a direction to complete the assessment proceedings within 3 months.
The High Court dismissed the Revenue's appeal, primarily on the ground of consistency. The Court noted that the ITAT's decision was based on its earlier order in the case of Quality BPO Services Pvt. Ltd., which was upheld by the High Court itself in Tax Appeal No. 439 of 2016. In that prior case, the High Court had dismissed the Revenue's appeal because the Revenue had not questioned the STPI Director's certification in the initial year of the claim or subsequent years, and therefore, it was not open for them to pick one year for different treatment without explanation. The High Court clarified that the dismissal of the present appeal was based on this principle of consistency. The Court explicitly stated that it was not going into the question of whether the STPI Authority's approval could be deemed as approval under Section 10B, as the assessee's counsel indicated contrary views from other High Courts. The Court also noted that other proposed questions of law were kept open for consideration in an appropriate matter.
The High Court held that it should not disturb the order passed by the Appellate Tribunal dismissing the Revenue's appeal, thereby affirming the findings of the CIT(A). The CIT(A) had deleted the addition of Rs. 5,20,95,322/- made by the AO on account of estimated 'on money' receipts. The CIT(A) found no documentary evidence to support the 'on money' receipts and noted that no documents were recovered during search/survey. Crucially, the CIT(A) examined the statements of the two flat buyers and concluded that they did not state they had made 'on money' payments, but rather extra payments for extra work, which was supported by evidence of bank loans and extra work agreements. The Tribunal agreed with the CIT(A)'s reasoning that the adoption of a huge 'on money' amount without any concrete evidence was not justified. Consequently, the appeal filed by the Revenue was dismissed.
The High Court dismissed the writ application, upholding the ITAT's order. The Court noted that the ITAT had dismissed the Revenue's appeal on August 14, 2019, based on the low tax effect, and at that time, no circular providing for exceptions for penny stock cases was available. The Court found that the subsequent circulars (No. 23/2019 and the Office Memorandum dated September 16, 2019) did not contemplate retrospective application to orders passed prior to their issuance. Specifically, they did not suggest applicability from August 8, 2019, the date of Circular No. 17/2019. Therefore, the ITAT's original order did not suffer from an apparent error that could be rectified under Section 254(2) of the Income Tax Act. The Court relied on observations from its coordinate benches in similar matters, emphasizing that the subsequent circulars were not retrospective and that the ITAT had correctly held that the appeals dismissed on August 14, 2019, were not filed pursuant to any special order under the later circulars.
The High Court held that there were no good grounds to disturb the order passed by the ITAT. The ITAT had affirmed the CIT(A)'s finding that there was no evidence on record to establish that the assessee firm was involved in the plotting of the scheme. Crucially, both the CIT(A) and the ITAT noted that the firm was not in existence during the relevant period, having been formed by a partnership deed dated June 1, 2017. The Court found this factual finding to be decisive. Therefore, the appeal filed by the Revenue under Section 260A of the Income Tax Act, 1961, was dismissed. No issue was expressly left undecided.