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The High Court held that the reasons recorded for reopening the assessment were communicated to the petitioner, and the petitioner's objections were properly dealt with. It was not a case of mere suspicion, but the competent authority had reason to believe that income had escaped assessment, supported by specific information. The Court noted that the Assessing Officer had taken note of transactions involving Rs. 27 lakhs constituting fresh information regarding the assessee as a beneficiary of bogus accommodation entries, representing undisclosed income. The Court referred to various precedents, including Phool Chand Bajrang Lal, Bombay Pharma Products, and Anant Kumar Saharia, stating that in exercise of jurisdiction under Article 226, the sufficiency of reasons for forming the belief cannot be interfered with at that stage. The Court distinguished cases like SFIL Stock Broking Ltd. and Sarthak Securities Co. Pvt. Ltd. on factual grounds. The Court concluded that the petitioner was seeking an adjudication on the merits of the controversy, which is beyond the scope of Article 226. It is open for the assessee to participate in the reassessment proceedings and present its case. Therefore, the Court found no reason to interfere with the notice or the order passed by the respondents. The writ petition was dismissed.
The Tribunal noted that the learned standing counsel for the Revenue did not dispute that the tax liability involved was less than Rs. 50 Lakhs. This was corroborated by the perusal of the record. In view of Circular F.No. 390/Misc/116/2017-JC dated 11/07/2018, issued by the Ministry of Finance, Department of Revenue, Central Board of Indirect Taxes & Customs, which enhanced the tax limit for challenging appeals to Rs. 50 Lacs and made it applicable to existing appeals, the learned standing counsel for the appellant Revenue sought and was permitted to withdraw the appeal. Accordingly, the appeal was dismissed as withdrawn.
The High Court held that the Income Tax Officer – 3 (1), Indore, had jurisdiction. The Court noted that the assessee had been filing e-returns from inception with Ward 3(1), Indore, and the assessment for the prior year (Assessment Year 2010-11) was also completed by the Indore authorities, with a demand of Rs.5,93,14,060/- raised. The cases for Assessment Years 2011-12 and 2012-13 were selected for scrutiny through CASS. The Court found that the assessee had accepted the jurisdiction of the Assessing Officer at Indore in respect of previous years. The judgments relied upon by the petitioner were distinguished. The Court found no violation of principles of natural justice as notices were issued and the assessee had opportunities to participate. The Court concluded that the Chief Commissioner was justified in passing the impugned order based on the earlier returns and assessments at Indore. The writ petition was dismissed.
The Tribunal upheld the deletion of Rs. 17,29,426/- on account of subsidy on interest to farmers, noting that a settlement was reached through Lok Adalat and the assessee was directed to write off this amount. The Tribunal found that the Commissioner (Appeals) was correct in allowing this as business expenditure. Regarding the deletion of Rs. 2,05,14,510/-, the Tribunal held it to be a business expenditure required in the course of business. The Tribunal's reasoning, as detailed in paragraph 29 of its order, explained that this amount represented a liability for interest subsidy provided to rural cooperative societies, financed by NABARD funds. The assessee passed on government subsidies and also contributed from its own funds. This was treated as an expenditure and an ascertained liability, even if estimated and paid subsequently. The Tribunal found no infirmity in the order of the CIT(A) and upheld it. The Revenue failed to point out any specific provision of the Act to disallow this deletion. Consequently, no substantial question of law was found to be involved, and the appeal was dismissed.
The High Court held that the learned ITAT had not committed any legal error in dismissing the appeal filed by the Revenue. The Court found that the issue involved was fully covered by its earlier order dated March 22, 2017, passed in ITA No.99/Ind/2016 for Assessment Year 2011-12. The Court also referred to its detailed order passed on the same day in ITA No.210/2017, stating that the reasoning in that order would apply mutatis mutandis to the present appeal. Consequently, the Court concluded that no substantial question of law was involved in the appeal. The appeal was dismissed in limine.
The Tribunal held that the penalty levied under Section 271(1)(c) was not justified. The reasoning was that the assessee filed a revised return showing additional income much prior to the issuance of the notice under Section 153-C of the Act. Furthermore, no documentary evidence was found during the survey or search proceedings that related to the capital gains declared in the revised return. The Tribunal also noted that the Assessing Officer had not recorded any satisfaction regarding the concealment of income or furnishing of inaccurate particulars. The High Court agreed with the Tribunal's view, stating that the Assessing Officer had not recorded his satisfaction and that the revised return was filed before the Section 153-C notice. The Court found no illegality in the ITAT's order and no substantial question of law arising. The ratio is that penalty under Section 271(1)(c) cannot be levied solely on the basis of a revised return filed before a Section 153-C notice, especially in the absence of incriminating material found during search and without the Assessing Officer recording satisfaction of concealment. The appeal was dismissed.
The High Court held that the learned ITAT had not committed any legal error in dismissing the Revenue's appeal. The Court found that no substantial question of law was involved. The reasoning applied by the High Court in a related case, ITA No.210/2017, decided on the same day, was deemed applicable mutatis mutandis to this appeal. The Court affirmed the ITAT's decision to uphold the Commissioner (Appeal)'s order, which had deleted the additions made by the Assessing Officer on account of interest subsidy. The principle is that if the ITAT's order is based on a correct interpretation of law and facts, and no substantial question of law arises, the High Court will not interfere. The appeal was dismissed in limine.
The High Court held that no substantial question of law arose for consideration. The Court observed that the entire case turned on facts. It noted that no material was presented to dispel the AO's findings regarding the defective, unidentified, and unverified method of accounting adopted by the assessee. The Court cited the Supreme Court judgment in M/s. Kachwala Gems, Jaipur Vs. Joint Commissioner of Income Tax, Jaipur, which held that findings on facts, like bogus purchases or rejection of books of accounts with cogent reasons, cannot be interfered with in an appeal under Section 260A. The Court also referred to M. Janardhana Rao Vs. Joint Commissioner of Income Tax, which reiterated that an appeal under Section 260A is only for substantial questions of law, and interference is not warranted when findings are based on facts. Since the assessee failed to establish a verifiable accounting method, the AO's conclusion was deemed inevitable, and the appeal was dismissed.
The High Court held that it was not justified in upsetting a finding of fact arrived at by the Tribunal, especially when no substantial question of law was framed. The Court relied on the Supreme Court's decision in K. Ravindranathan Nair v. Commissioner of Income Tax, emphasizing that the Tribunal is the final fact-finding authority and the High Court can only examine findings of fact if a question of perversity is raised. The Court also referred to the tests laid down by the Supreme Court in Sir Chunilal V. Mehta & Sons Ltd. and Hero Vinoth v. Seshammal to define a substantial question of law. Since no substantial question of law arose from the ITAT's order, the High Court dismissed the appeal. The operative direction was to set aside the High Court's conclusion and restore the view of the Tribunal, answering the question in favour of the assessee and against the Revenue.
The High Court held that it was not justified in upsetting a finding of fact arrived at by the Tribunal, especially when no substantial question of law was framed. The Court relied on the Supreme Court's decision in K. Ravindranathan Nair v. Commissioner of Income Tax, emphasizing that the Tribunal is the final fact-finding authority and the High Court can only examine findings of fact if a question of perversity is raised. The Court also referred to the tests laid down by the Supreme Court in Sir Chunilal V. Mehta & Sons Ltd. and Hero Vinoth v. Seshammal to define a substantial question of law. Since no substantial question of law arose from the ITAT's order, the High Court dismissed the appeal. The operative direction was to set aside the High Court's conclusion and restore the view of the Tribunal, answering the question in favour of the assessee and against the Revenue.
The High Court held that it was not justified in upsetting a finding of fact arrived at by the Tribunal, especially when no substantial question of law was framed. The Court relied on the Supreme Court's decision in K. Ravindranathan Nair v. Commissioner of Income Tax, emphasizing that the Tribunal is the final fact-finding authority and the High Court can only examine findings of fact if a question of perversity is raised. The Court also referred to the tests laid down by the Supreme Court in Sir Chunilal V. Mehta & Sons Ltd. and Hero Vinoth v. Seshammal to define a substantial question of law. Since no substantial question of law arose from the ITAT's order, the High Court dismissed the appeal. The operative direction was to set aside the High Court's conclusion and restore the view of the Tribunal, answering the question in favour of the assessee and against the Revenue.
The High Court held that the requirement of pre-decisional hearing for a special audit under Section 142(2A) was met. It noted that the Principal Commissioner of Income-tax (Central), Bhopal, had granted the petitioner an opportunity before deciding on the approval for the special audit, citing show cause notices dated 30.11.2017 and a letter dated 11.12.2017. The court found sufficient compliance with the proviso to Section 142(2A). The court was unable to agree with the assessee's proposition. Furthermore, considering that an assessment order had been passed and the assessee had a statutory remedy of appeal, the writ petitions were considered to have no merit and were dismissed. The court applied the reasoning from a previous order in W.P. No.7999/2018.
The High Court held that the requirement of pre-decisional hearing for a special audit under Section 142(2A) was met. It noted that the Principal Commissioner of Income-tax (Central), Bhopal, had granted the petitioner an opportunity before deciding on the approval for the special audit, citing show cause notices dated 30.11.2017 and a letter dated 11.12.2017. The court found sufficient compliance with the proviso to Section 142(2A). The court was unable to agree with the assessee's proposition. Furthermore, considering that an assessment order had been passed and the assessee had a statutory remedy of appeal, the writ petitions were considered to have no merit and were dismissed. The court applied the reasoning from a previous order in W.P. No.7999/2018.