Punjab & Haryana High Court Judgments — 2023

The High Court dismissed the appeal filed by the Principal Commissioner of Income Tax, Faridabad. The dismissal was based on the reasoning that the appeal did not involve a substantial question of law. This conclusion was drawn by the Court by referring to its own previous judgment dated 27.03.2019 in ITA No.495 of 2018. That judgment had interpreted Section 254(2A) of the Income Tax Act, 1961, and held that a combined period of stay exceeding 365 days would not constitute a substantial question of law. The High Court applied this precedent to the present case, implicitly finding that the circumstances of the appeal, as presented or understood in light of the cited precedent, did not meet the threshold for a substantial question of law required for an appeal under Section 260A. No specific findings were made on the merits of the ITAT's order dated 28.10.2020.

The High Court held that the benefit of deductions under Section 80-IC of the Income Tax Act cannot be given on interest income earned from fixed deposits kept as security, as this income is not part of the business of manufacturing. This finding is based on the Supreme Court judgment in Conventional Fastners Vs. Commissioner of Income Tax, Dehradun. Furthermore, the High Court upheld the ITAT's decision that interest or profit derived from deposits cannot be said to be flowing directly from an industrial undertaking, and therefore, deduction under Section 80HH could not be allowed. This reasoning is supported by the Supreme Court's judgment in Pandian Chemicals Ltd. Vs. CIT. The High Court found no interference required in the ITAT's order. The appeal was dismissed.

The High Court held that the petitioner has an alternate remedy to file an appeal before the Income Tax Tribunal against the Revision Order under Section 263 of the Income Tax Act, 1961, dated March 27, 2019. Since CWP-32201-2018, with which the present writ petition was to be heard, has already been disposed of, the present writ petition is also disposed of. The petitioner is granted liberty to file an appeal against the order dated March 27, 2019, before the Income Tax Tribunal. Furthermore, as interim proceedings were stayed, the petitioner can file an application for condonation of delay before the Tribunal. The court did not decide the merits of the revision order itself.

The Tribunal correctly affirmed the CIT(A)'s order, holding that the assessee's project completion method of accounting was consistent and valid. The Udyog Sahayak expenses were also correctly treated as revenue expenses.

The High Court held that the application CM-22657-CII-2019 was to be disposed of. The reasoning was that an order dated 30.09.2019, which the application sought to recall, had already been recalled by a subsequent order dated 06.12.2019. Therefore, the present application, which was filed to recall that already recalled order, was rendered infructuous. The Tribunal did not decide any substantive issue related to the income tax appeal itself, as the focus was on the procedural application. The operative direction was to dispose of the application. No issue was left undecided, as the application was dealt with.

The High Court allowed the appeal and set aside the ITAT's order. The Court noted that the Supreme Court in T.R.F. Limited Vs. Commissioner of Income Tax, Ranchi, had interpreted the amended Section 36(1)(vii) of the Income Tax Act, 1961, which states that a deduction for bad debt is allowable if it is written off as irrecoverable in the accounts of the assessee for the previous year. The Supreme Court held that it was not necessary to prove that the debt had actually become irrecoverable; writing it off in the accounts was sufficient. Since the revenue did not dispute the amendment, the High Court found that the ITAT's disallowance was not in line with the amended provision and the Supreme Court's ruling. The matter was remanded back to the assessing authority to pass a fresh speaking order, considering the amendment and examining the extent of the written-off amount.

The High Court allowed the petition and set aside the impugned notices and order. The Court held that the firm M/s Sandeep Theatre ceased to exist on 31.03.2006. The order dated 12.03.2013, which accepted the petitioner's explanation and set aside the penalty for assessment year 2006-2007, had attained finality. Therefore, there was no occasion for the respondents to issue a fresh notice under Section 147 of the Act for assessment year 2007-2008 on the ground of capital gains under Section 45(4) arising from the distribution of assets among partners after dissolution. The Court further found that the proceedings under Section 149 were issued after the expiry of six years from the end of the relevant assessment year, making them liable to be set aside on grounds of limitation. The Court noted that the partnership deed only mentioned management of the theatre, and the land was leased to and purchased by Raja Ram HUF, which had a separate identity. The partnership firm had come to an end, and the HUF was filing separate returns. The Court concluded that the department was bound by the earlier order which accepted the dissolution of the firm.

The High Court dismissed the present appeal. The decision was based on the reasoning that a similar appeal, ITA No. 65 of 2006 (Commissioner of Income Tax, Faridabad Vs. Gian Chand Mittal), decided on 27.01.2016, was dismissed as not pressed. This dismissal was in view of Circular No. 21/2015 issued by the Government of India via a letter dated 10.12.2015. Consequently, the present appeal was also dismissed on the same grounds. The operative direction is the dismissal of the appeal. No specific issue was left undecided; the appeal was disposed of procedurally.

The High Court, considering the submissions made by the learned counsel for the appellant (Revenue), dismissed the instant appeal. The dismissal was based on the concession made by the Revenue that the issue involved had already been decided against them by the Hon'ble Supreme Court in the case of Deputy Commissioner of Income Tax and another vs. M/s. Pepsi Foods Ltd. (Civil Appeal No. 1106 of 2021) on 06.04.2021. The Court also took note of a previous order dated 13.07.2022, where an appeal with an identical issue (ITA No. 84 of 2020) was dismissed. The ratio decidendi is that if a legal issue has been authoritatively decided by the Supreme Court, subsequent appeals on the same issue by the Revenue should follow that precedent. No specific issue was left undecided; the appeal was disposed of on the basis of the conceded position.

The High Court held that the Assessing Officer cannot reopen an assessment under Section 147 after four years from the end of the assessment year unless there was a failure on the part of the assessee to disclose material facts. Since no such failure was established, the reopening was invalid.

The High Court held that the appeal had become infructuous. This decision was based on the submission made by the learned counsel for the respondent (revenue). The revenue informed the Court that the order passed by the Income Tax Appellate Tribunal (ITAT) on 29.04.2002, which had remanded the matter back to the assessing authority, had been complied with. Subsequently, the assessing authority had passed a final order on 30.03.2004. Therefore, the High Court, keeping in view these submissions, disposed of the present appeal as having been rendered infructuous. No specific findings on the merits of the original dispute were made, as the appeal was decided on a procedural development.