Madhya Pradesh High Court Judgments — 2023

The High Court held that the ITAT's order was passed in accordance with law and did not give rise to any substantial question of law. The Court found that the AO's assessment order dated December 26, 2019, was indeed non-speaking, as it lacked discussion of material and evidence regarding the cash deposit and agricultural income. The PCIT, Jabalpur, rightly exercised its powers under Section 263 of the Income Tax Act by setting aside the AO's order, deeming it prejudicial to the interest of revenue due to the lack of inquiry and verification. The ITAT, by not interfering with the PCIT's order, acted correctly. Therefore, the appeal was dismissed in limine for not involving any substantial question of law.

The High Court held that the findings of the Assessing Officer and the Tribunal were based on facts and did not give rise to any substantial question of law. Therefore, the appeal under Section 260A could not be entertained. The Tribunal's reasoning, as summarized in the judgment, included that the CIT(A) failed to consider the glaring difference between shares purchased at Rs. 25 and sold to the Director at Rs. 2, especially without any change in the company's valuation. The Tribunal found these off-market transactions not to be honest tax planning. It rejected the assessee's objection that the AO's assumption lacked proof, stating the difference in share value was so significant that it allowed a presumption of the transaction not being genuine, particularly in the absence of any material to deny it or evidence of distress. The Tribunal held that the onus was on the assessee to prove the genuineness of the share sale transactions, and since this onus was not discharged, the burden did not shift to the Revenue. The ITAT reversed the CIT(A)'s order and dismissed the assessee's cross-objection. The High Court dismissed the appeal in limine.

The High Court held that the findings of the ITAT were purely factual and did not raise any substantial question of law. Therefore, the appeal was not admitted. The ITAT, in its order, had confirmed the addition of Rs. 14,60,000/- as deemed dividend, while deleting an addition of Rs. 7,99,969/-. The Tribunal had found that the provisions of deemed dividend were attracted, but the dispute pertained to the quantum. It also noted that certain advances shown as payments for license fees were not in the nature of deemed dividend payments made directly to a third party on behalf of the assessee. The High Court's decision implies that the ITAT's factual determination regarding the quantum of deemed dividend and the inclusion or exclusion of specific amounts was considered conclusive and not amenable to further appeal on a question of law.

The High Court framed a new substantial question of law: 'Whether the Tribunal fell in grave error of law in failing to record reasons and findings in regard to assessment year 2004-05.' The Court answered this question in the affirmative. It observed that the ITAT's order, particularly concerning assessment year 2004-05, was non-speaking. The Tribunal had merely reproduced the findings of the CIT(A) and offered very brief, generalized affirmations without providing independent reasoning. The Court held that a non-speaking order violates principles of natural justice as it prevents the affected party from understanding the basis of the decision and hinders their ability to pursue further remedies. Relying on a previous order in ITA No.10/2021 where a similar issue of a non-speaking order led to remand, the Court found consensus between the parties that the ITAT's findings for assessment year 2004-05 were indeed non-speaking. Consequently, the appeal was allowed to the extent that the impugned ITAT order was set aside for assessment year 2004-05, and the matter was remanded to the ITAT for passing a speaking order. The Court directed that if the Tribunal's composition had changed, the speaking order should be passed after hearing both parties. The Revenue was granted liberty to raise all undecided contentions after the remand proceedings.

The High Court held that all contentions raised by the petitioner, including the one regarding the surrendered PAN, are available to be raised before the Assessing Officer. The Court expressed no doubt that the Assessing Officer would consider all these contentions, including the one concerning the surrendered PAN No. AABAG4517E, before taking a considered decision. Without commenting on the merits of the case, the Court declined to entertain the petition and dismissed it in limine. The operative direction is that the Assessing Officer shall consider the petitioner's contentions.

The High Court held that the mandate of Section 254(1) of the Act of 1961 is to dispose of an appeal on merits, even in the absence of the assessee, citing CIT vs. S. Cheniappa Mudaliar. The Court found that the appellant would be left remediless if the right to file an appeal was extinguished. Consequently, the impugned orders dated 26.09.2022 (passed in M.A. No. 13/Ind/2021) and 13.07.2015 (passed in ITA No. 206/Ind/2013) were set aside. The present appeal was allowed, and the matter was remanded back to the ITAT to decide the appeal bearing ITA No. 206/Ind/2013 on merits after hearing all concerned, preferably within three months. The issue of whether the Covid-19 period should be excluded for limitation was not expressly decided, but the overall relief granted implies consideration of the delay in a broader context of ensuring a hearing on merits.

The High Court held that the writ petition was not maintainable before the Indore Bench. The Court noted that the return of income for assessment year 2018-19, the notice under Section 148A(b), the order under Section 148A(d), and the notice under Section 148 were all issued by the DCIT/ACIT, Bhopal. The Court found that merely receiving one or two notices at the petitioner's Indore address did not confer jurisdiction on the Indore Bench, especially when the petitioner was consistently assessed to tax in Bhopal and held a PAN card issued from Bhopal. The Court distinguished the case of *Red Chilli International Sales* relied upon by the petitioner, stating that it dealt with the question of alternative remedy, whereas the present case concerned territorial jurisdiction. Consequently, the Court declined to entertain the writ petition and relegated the petitioner to file an appropriate writ petition before the Principal Seat at Jabalpur, granting liberty to do so.

The High Court held that there is no substantial question of law arising from the ITAT's order. The Court referred to an identical substantial question of law that came up before a Division Bench of the same High Court at Gwalior Bench in ITA No. 21/2019, ITA No. 31/2019, and ITA No. 32/2019 (Principal Commissioner of Income Tax Vs. Gahoi Foods Private Ltd). In that case, vide order dated 12.07.2019, the appeals were disposed of by holding that since no incriminating documents were found during the search, the order under appeal could not be considered illegal. Consequently, those appeals were dismissed. Following this precedent, the High Court found no reason to take a different view in the present appeal. Therefore, the appeal was dismissed for not raising a substantial question of law.

The High Court held that the substantial question of law raised by the appellant was identical to the question considered by a Division Bench of the same Court at the Gwalior Bench in ITA No. 21/2019, ITA No. 31/2019, and ITA No. 32/2019 (Principal Commissioner of Income Tax Vs. Gahoi Foods Private Ltd). In that case, by an order dated July 12, 2019, the appeals were disposed of holding that in the given facts, as no incriminating documents were found during the search, the order under appeal could not be considered to have suffered any illegality giving rise to the substantial question of law. Consequently, those appeals were dismissed. Following this precedent, the High Court found no substantial question of law in the present appeal and accordingly dismissed it. The operative direction was the dismissal of the appeal.

The High Court held that in the given facts of the case, as no incriminating documents were found during the course of the search, the order under appeal could not be said to suffer from any illegality that would give rise to the substantial question of law raised. The Court relied on a previous decision of its own Division Bench at the Gwalior Bench in ITA No. 21/2019, ITA No. 31/2019, and ITA No. 32/2019 (Principal Commissioner of Income Tax Vs. Gahoi Foods Private Ltd), decided on 12.07.2019. In that case, the appeals were disposed of by holding that in the absence of incriminating documents found during the search, the order under appeal was not illegal. Consequently, the appeals were dismissed. Therefore, finding no substantial question of law, the present appeal was dismissed.

The High Court held that an identical substantial question of law had been considered by a Division Bench of the same Court at the Gwalior Bench in ITA No. 21/2019, ITA No. 31/2019, and ITA No. 32/2019 (Principal Commissioner of Income Tax Vs. Gahoi Foods Private Ltd). In that case, vide order dated 12.07.2019, the appeals were disposed of holding that since no incriminating documents were found during the search, the order under appeal could not be considered illegal. Consequently, those appeals were dismissed. Following this precedent, the High Court found no substantial question of law in the present appeal and dismissed it. The operative direction is the dismissal of the appeal.

The High Court held that the substantial question of law raised by the appellant (revenue) was identical to one considered by a Division Bench of the same court at its Gwalior Bench in ITA No. 21/2019, ITA No. 31/2019, and ITA No. 32/2019 (Principal Commissioner of Income Tax Vs. Gahoi Foods Private Ltd). In that earlier case, decided on 12.07.2019, the Court had dismissed the appeals, holding that in the given facts where no incriminating documents were found during the search, the order under appeal could not be considered illegal. Therefore, following the precedent set by the Gwalior Bench, the High Court found no substantial question of law in the present appeal. The appeal was dismissed.

The High Court of Madhya Pradesh, at Jabalpur, allowed the petitioner's prayer to withdraw the writ petition. The court noted that the petitioner had already filed an appeal before the Commissioner of Income Tax (Appeals) on September 9, 2018, against the same assessment order that was the subject of the writ petition. Consequently, the writ petition was dismissed as withdrawn. The court granted the petitioner liberty to either pursue the pending appeal or avail any other remedy available in accordance with law. No specific findings were made on the merits of the assessment order itself, as the petition was withdrawn.

The High Court dismissed the appeal, holding that no substantial question of law arose. The Court found that the ITAT had examined the case from all angles and correctly concluded that the CIT should have enquired into the nature of the Trust. Since there was nothing substantive to doubt the Trust's charitable nature, the CIT was not justified in rejecting the application. The Court relied on the principle that factual findings of the ITAT are binding on the High Court unless perverse or against evidence. It also cited the judgment in Commissioner of Income Tax (Exemption) Vs. Maharashi World Peace Trust, holding that a Trust is not mandatorily required to be registered as a public charitable trust under local laws to seek registration under Section 12AA of the Income Tax Act. The Court further agreed with the ITAT that the genuineness of the Trust's objects should be examined at the assessment stage, not at the time of granting registration. Therefore, the appeal was dismissed as lacking merit.

The High Court held that there was no substantial question of law arising from the ITAT's order dated 4.10.2021. The Court found no reason to deviate from its previous decision in ITA No. 80/2022, which involved similar facts and grounds and was dismissed at the admission stage. Consequently, the present appeal was also dismissed in limine (at the threshold) due to the absence of a substantial question of law. The operative direction was the dismissal of the appeal. No specific issue was left undecided; the entire appeal was disposed of on the preliminary ground of lacking a substantial question of law.

The High Court dismissed the appeal in limine. The Court observed that the facts and grounds raised in the present appeal were nearly the same as those in ITA No. 80/2022, which had been previously dismissed by the High Court at the admission stage due to the absence of a substantial question of law. Having heard the learned counsel for the Revenue, the Court found no reason to deviate from its earlier decision. Therefore, the present appeal was also dismissed in limine for want of a substantial question of law. The operative direction was the dismissal of the appeal.

The High Court held that the present appeal, like the previously dismissed ITA No. 80/2022, does not involve a substantial question of law. The Court, after hearing the learned counsel for the Revenue, found no reason to deviate from its earlier decision in ITA No. 80/2022, which had dismissed the Revenue's appeal at the admission stage. Therefore, the present appeal is also dismissed in limine due to the absence of a substantial question of law. The operative direction is the dismissal of the appeal. No specific issues were decided on merits as the appeal was dismissed summarily.