COMMISSIONER OF INCOME TAX-I V. M/S AMIT CORPORATION

TAX APPEAL No. 2583 of 2010

AI Insights

The case revolves around a dispute between the Commissioner of Income Tax-I and M/S Amit Corporation concerning the assessment for the Assessment Year 2005-06. The Assessing Officer had initially completed the assessment under Section 143(3) of the Income Tax Act, 1961. However, the Commissioner, exercising powers under Section 263, found the assessment order to be erroneous and prejudicial to the interest of the Revenue, as he believed proper inquiries were not conducted. The matter was then appealed to the Tribunal by the assessee, which ruled in favor of the assessee, leading to the present appeal by the Revenue in the Gujarat High Court.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 361520 (HC-GUJARAT)
• Appeal Type: High Court cases
• Pronouncement Date: 01-02-2012
• Appeal Filed By: Department
• Assessment Year: 2005-2006
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Assessee Lawyers: MAUNA BHATT
• Keywords: Assessment; Erroneous order; Income Tax; Prejudicial to the interest of the Revenue; Revision
• Section: 143(3); 263

Judgement Text

"TAXAP/2583/2010 1/5 ORDER IN THE HIGH COURT OF GUJARAT AT AHMEDABAD TAX APPEAL No. 2583 of 2010 ========================================================= COMMISSIONER OF INCOME TAX-I - Appellant(s) Versus M/S AMIT CORPORATION - Opponent(s) ========================================================= Appearance : Mrs MAUNA M BHATT for Appellant None for Opponent ========================================================= CORAM : HONOURABLE MR.JUSTICE AKIL KURESHI and HONOURABLE MS JUSTICE SONIA GOKANI 1st February 2012 ORAL ORDER (Per : HONOURABLE Mr..JUSTICE AKIL KURESHI) Revenue is in appeal against the judgment of the Tribunal dated 19th July 2010, raising following question for our consideration :- “Whether Appellate Tribunal is right in law and on facts in setting aside the order passed by the CIT u/s. 263 of the Act ?” Assessing Officer finalized assessment of the respondent- assessee for the A.Y 2005-06 under Section 143 (3) of the Income T ax Act, 1961 {“Act” for short}. Commissioner of Income-tax, however, in exercise of power under Section 263 of Downloaded on : Tue Jun 03 15:12:47 IST 2025 Uploaded by P.B.TALREJA(HC00154) on Fri Feb 03 2012 2012:GUJHC:5176-DB NEUTRAL CITATION TAXAP/2583/2010 2/5 ORDER the Act, took the order of the Assessing Officer in revision. After hearing the assessee, the Commissioner passed his order dated 30th March 2010. C.I.T was of the opinion that the order passed by the Assessing Officer was erroneous and was prejudicial to the interest of the Revenue. The Commissioner was of the opinion that the Assessing Officer did not carry out proper inquiries. There was nothing on the record to show that the books of account, bills, vouchers, cash book, etc., were produced by the assessee before the Assessing Officer at the time of assessment proceedings. In view of these observations, the Commissioner set-aside the order of Assessing Officer and placed the matter back before the Assessing Officer to frame assessment de novo after making proper inquiry and verifying the books of account of the assessee. Assessee carried the matter in appeal before the Tribunal. Tribunal, by the impugned order dated 19th July 2000, allowed the assessee's appeal. Thereupon, Revenue has approached this Court by way of the present T ax Appeal. Tribunal was of the opinion that while framing the original assessment, the Assessing Officer had carried out full inquiries and thereafter framed the assessment. Tribunal, therefore, was of the opinion that the order of the Assessing Officer could not have been categorized as erroneous on the Downloaded on : Tue Jun 03 15:12:47 IST 2025 Uploaded by P.B.TALREJA(HC00154) on Fri Feb 03 2012 2012:GUJHC:5176-DB NEUTRAL CITATION TAXAP/2583/2010 3/5 ORDER grounds stated by the Commissioner of Income-tax. Tribunal held and observed as under :- “6. We have carefully considered the rival submissions and have also perused the material on record as also the paper book filed before us. We find from the assessment order itself that as stated in para (4) thereof the A.O has clearly stated that during the year there were sales of flats of Rs. 5,20,000/= on which a certain profit was declared. We find from the order that the assessee is a civil contractor and what is sold as flat is fixed assets of the firm. From the submissions to the I.T.O and to the CIT it is noted that no business activity was made during the year. We also find that the ITO has clearly stated in para (5) that subject to above remarks and based upon the information produced before the undersigned, the total income of the assessee is computed as under. It is further noted that several replies were filed both during assessment proceedings and during the inquiry by the A.O during revision proceedings. From the replies on issues referred to in the show cause notice, it is seen that in respect of the major item being cash credits, the required details in support thereof were furnished and the A.O is stated to have even issued summons u/s. 131 to the concerned parties for verification. In respect of current liabilities by way of sundry creditors Downloaded on : Tue Jun 03 15:12:47 IST 2025 Uploaded by P.B.TALREJA(HC00154) on Fri Feb 03 2012 2012:GUJHC:5176-DB NEUTRAL CITATION TAXAP/2583/2010 4/5 ORDER also, from the accounts filed it is seen that they are repayments of opening balances and not fresh credits. Even otherwise, considering the facts on record, we are not in agreement with the C.I.T that no inquiries were conducted by the A.O. The decisions of jurisdictional High Court cited before us support the ground of appeal. Hence, considering the same along side the material on record and the language of the assessment order, the assessment order cannot be said to be erroneous on grounds stated by the C.I.T. In view of above, we hold that only for the purpose of making re- enquiries, more so when inquiry report was also obtained by the CIT, the assessment cannot be set aside in the scheme of Section 263 of the Act.” We are of the opinion that the Tribunal committed no error. When, during the course of framing of the assessment, the Assessing Officer had access to all the records of the assessee, after pursuing such record the Assessing Officer framed the assessment, such assessment could not have been re-opened in exercise of revision power under Section 263 of the Act for making further inquiries. In the facts of the case, in our opinion, Tribunal rightly interfered with such order. No question of law arises. T ax Appeal is, therefore, dismissed. Downloaded on : Tue Jun 03 15:12:47 IST 2025 Uploaded by P.B.TALREJA(HC00154) on Fri Feb 03 2012 2012:GUJHC:5176-DB NEUTRAL CITATION TAXAP/2583/2010 5/5 ORDER {Akil Kureshi, J.} {Ms. Sonia Gokani, J.} Prakash* Downloaded on : Tue Jun 03 15:12:47 IST 2025 Uploaded by P.B.TALREJA(HC00154) on Fri Feb 03 2012 2012:GUJHC:5176-DB NEUTRAL CITATION "