COMMISSIONER OF INCOME TAX I V. M/S R J TRADERS AMRITSAR

ITA/257/2012

AI Insights

The case involves the Commissioner of Income Tax-I, Amritsar, as the appellant, and M/s R.J. Traders, Amritsar, as the respondent. The core issue revolves around the reassessment of income following allegations of suppressed sales by the assessee under the Punjab Agricultural Produce Markets Act, 1961. Initially, the Assessing Officer added a significant amount to the assessee's income based on these allegations. However, both the CIT(A) and ITAT set aside this addition, leading to the present appeal. The High Court acknowledged the setting aside of the initial orders under the 1961 Act but recognized the need for a fresh assessment in light of new orders under the same Act, which implicated the assessee in additional market fee liabilities.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 718345 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 10-09-2013
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961, Punjab Agricultural Produce Markets Act, 1961
• Result in Favour of: Partly Allowed
• Court: HIGH COURT
• Department Lawyers: AJIT SIHAG; AVNEESH JHINGAN
• Assessee Lawyers: DENESH GOYAL
• Keywords: Appeal; Assessment; Income evasion; Income Tax; Market Fee; Sales suppression
• Section: 148; 143(1)

Judgement Text

"ITA No.257 of 2012 [1] IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITA No.257 of 2012 (O&M) Decided on: 10.09.2013 Commissioner of Income Tax-I, Amritsar ..... Appellant VERSUS M/s R.J.Traders, Amritsar ..... Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Mr.Denesh Goyal, Advocate, for the appellant. Mr.Ajit Sihag, Advocate, for Mr.Sandeep Khunger, Advocate, for the respondent. Mr.Avneesh Jhingan, Advocate, for the respondent. (in ITA No.270 of 2012). ******* RAJIVE BHALLA, J. (ORAL) By way of this order, we shall dispose of ITAs No.257, 258, 259 and 270 of 2012 as they involve adjudication of same questions of law and pertain to the same assessee, except ITA No.270 of 2012 which pertains to another assessee. For the sake of convenience, facts are being taken from ITA No.257 of 2012. The revenue lays challenge to orders dated 04.10.2010, passed by the Commissioner of Income Tax (Appeals), Amritsar (hereinafter referred to as the 'CIT(A)'), allowing an appeal filed by the assessee, and order 07.06.2012, passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as the 'ITAT'), dismissing its appeal. ITA No.257 of 2012 [2] The assessee is engaged in the business of marketing agricultural produce i.e. onions, within the notified area of Market Committee, Amritsar. The assessee filed a return of his income which was processed under Section 143(1) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'). Upon receipt of information that the Punjab Mandi Board has passed an order that the assessee has concealed its sales, approval was sought from the Joint Commissioner of Income Tax, Range-III, Amritsar, and a notice under Section 148 of the Act was served upon the assessee. The assessee filed returns on 15.04.2008. The Assessing Officer vide order dated 30.12.2008 ordered an addition of Rs.61,42,981/-. Aggrieved by this order, the assessee filed an appeal before the CIT (A) which was allowed on 04.10.2010 by holding that as order passed against the assessee by the Punjab Mandi Board has been set aside, the order passed by the Assessing Officer is not warranted. An appeal filed by the revenue against this order was dismissed by the ITAT. Counsel for the revenue admits that orders passed under the Punjab Agricultural Produce Markets Act, 1961 (hereinafter referred to as the '1961 Act') have been set aside, but submits that after remand the authority exercising power under the 1961 Act, has passed a fresh order that indicates suppression of quantum of sales and as a consequence, evasion of income. The matter may, therefore, ITA No.257 of 2012 [3] be remitted to the Assessing Officer to determine escaped income, afresh and in accordance with law on the basis of fresh orders passed under the 1961 Act. It is further submitted that though in ITA No.270 of 2012, no such order has been passed, Assessing Officer may be allowed to pass an appropriate order as and when and if an adverse order is passed under the 1961 Act. Counsel for the assessee is not in a position to deny that fresh orders have been passed under the 1961 Act but urges that as the assessment order has been set aside by the CIT(A) and the ITAT, the fresh order passed under the 1961 does not warrant restoring the matter to the Assessing Officer and if at all the revenue has any right, it would have to commence the process of reassessment afresh by seeking approval etc. in accordance with law, subject to the rights of the assessee to raise questions of limitation and jurisdiction etc. We have heard counsel for the parties, perused the impugned order as well as affidavits filed in each case, in Court today. The order passed under the 1961 Act which was foundation of order passed by the Assessing Officer has admittedly been set aside. We, therefore, find no reason to hold that orders passed by the CIT(A) or the ITAT setting aside order passed by the Assessing Officer, suffer from any error of law or jurisdiction as would require interference. However, as it is urged by counsel for the revenue and not denied by counsel for the assessee that fresh proceedings under ITA No.257 of 2012 [4] the 1961 Act have led to passing of a fresh order against assessees, arrayed as respondents, in ITAs No.257, 258 and 259 of 2012 holding them liable for payment of additional market fee, interest etc., the Assessing Officer would be required to reconsider these orders to ascertain whether any income has escaped assessment or the assessee is guilty of evasion of tax etc. We, therefore, restore the matter to the Assessing Officer to proceed afresh and in accordance with law after considering orders passed under the 1961 Act and if permissible, frame a fresh assessment against the assessee. As regards ITA No.270 of 2012, the Assessing Officer would be free to consider framing an assessment in accordance with law as and when and if any adverse order is passed against the assessee, under the 1961 Act. In view of what has been stated hereinabove, the impugned orders are affirmed. The order passed by the ITAT is modified in the aforementioned terms. The appeals are disposed of accordingly. [ RAJIVE BHALLA ] JUDGE 10.09.2013 [ DR. BHARAT BHUSHAN PARSOON ] shamsher JUDGE Singh Shemsher 2013.09.19 14:37 I attest to the accuracy and integrity of this document Chandigarh "