The Commissioner of Income Tax IV V. Shri Raaj Kumar Jain

ITTA/147/2013

AI Insights

The case involves an appeal by the Commissioner of Income Tax-IV Hyderabad against the decision of the ITAT, which upheld the Assessing Officer's decision to drop penalty proceedings against Shri Raaj Kumar Jain. The background of the case includes a search and seizure operation against Sri Gopal Lal Badruka and M/s. Ahura Holdings, leading to a notice under Sec. 148 of the Income Tax Act issued to the respondent. After the respondent admitted additional income and the Assessing Officer reassessed this income, penalty proceedings were initially dropped but later reopened by the Commissioner of Income Tax (Appeals). The ITAT's decision, which was contested in this appeal, found that the Assessing Officer had validly dropped the penalty proceedings based on his satisfaction with the respondent's explanation, a view supported by precedents from the Supreme Court and Gujarat High Court.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 719118 (HC-ANDHRA_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 28-06-2013
• Assessment Year: misc
• Other Referred Cases: Shabbir T.Chass
• Laws Referred To: Income Tax Act
• Result in Favour of: Others
• Court: HIGH COURT
• Keywords: Assessing Officer; Erroneous and Prejudicial; Legal principle; Non-speaking order; Penalty proceedings; Satisfaction; Possible view
• Section: 148

Judgement Text

"IN THE HIGH COURT OF JUDICATURE, ANDHRA PRADESH AT HYDERABAD FRIDAY, THE TWENTY EIGHTH DAY OF JUNE TWO THOUSAND AND THIRTEEN PRESENT THE HON’BLE THE CHIEF JUSTICE SRI KALYAN JYOTI SEN GUPTA AND THE HON'BLE MS. JUSTICE G.ROHINI I.T.T.A. No. 147 OF 2013 Between: Commissioner of Income Tax-IV Hyderabad. ..... Appellant AND Shri Raaj Kumar Jain .....Respondent The Court made the following : JUDGMENT: (per the Hon’ble the Chief Justice Sri K.J. Sengupta) This appeal is sought to be admitted on the following suggested questions of law: a. Whether in the facts and circumstances of the case and in law, Hon’ble ITAT is justified in holding that the order passed by the AO is not erroneous and prejudicial to the interest of Revenue without appreciating that the Assessing Officer passed a non- speaking order? b. Whether in the facts and circumstances of the case and in law, Hon’ble ITAT has erred in not applying the decision of the coordinate Bench in the case of Shabbir T.Chass on the similar set of facts and thereby allowing the appeal of the Assessee? This appeal is preferred against the judgment and order of the learned Tribunal dated 7.9.2012 in relation to the assessment year 2004-2005. Shorn of details, facts of the case are that there was a search and seizure proceeding in case of one Sri Gopal Lal Badruka and M/s. Ahura Holdings and in sequel to that a notice under Sec. 148 of the Income Tax Act was issued to the respondent. The assessee admitted the additional income and thereafter, reassessment was made by the Assessing Officer. Then notice to initiate penalty proceedings was issued to the assessee. The assessee replied to the notice explaining his position that there was no business activity and income. Being satisfied with the explanation of the assessee, the Assessing Officer dropped the penalty proceedings and the Commissioner of Income Tax (Appeals) however, recording his dissatisfaction, reopened the penalty proceedings. When the assessee preferred appeal against the aforesaid order passed by the Commissioner, Income Tax (Appeals), the learned Tribunal correctly held that basing on the earlier judgment and order, when the Assessing Officer has reached satisfaction on a possible view, such views cannot be substituted by the Commissioner of Income Tax (Appeals). We are in full agreement with the finding of the learned Tribunal, which is based on legal principle laid sown by the Supreme Court as well as Gujarat High Court. If the pre-conditions for the initiation of penalty proceedings are factually not satisfied, such proceedings cannot be initiated. The Assessing Officer, in this case, after considering the explanation, found that the preconditions are not satisfied and thus dropped the proceedings. The Tribunal has correctly held that it is not open for the Commissioner of Income Tax (Appeals) to substitute another view. The finding of the Assessing Officer is not absurd one. We are of the opinion that the Tribunal has correctly held that when a possible view is taken, another possible view cannot be substituted. Therefore, we hold that the Tribunal has reached a correct conclusion and we do not see any grounds warranting interference. Accordingly, the appeal is dismissed. No order as to costs. ______________________ Kalyan Jyoti Sengupta, CJ. __________ G.Rohini, J. June 28, 2013 MAS "