THE COMMISSIONER OF INCOME TAX V. M/S ESCORTS EMPLOYEES

ITA/214/1999

AI Insights

The case involves the Commissioner of Income Tax, Rohtak as the appellant and M/s Escorts Employees Ancillaries Ltd., Faridabad as the respondent. The appeal challenges the order dated 31.05.1999 by the Income Tax Appellate Tribunal, Delhi Bench 'C', which dismissed the revenue's appeals for the assessment years 1989-90 and 1990-91. The primary legal issue was whether the Tribunal was justified in deleting the additional tax and confirming the CIT(A)'s order, which allegedly ignored the amended provisions for charging additional tax effective from 01.04.1989. The revenue also contested the CIT(A)'s decision to set aside the order under Section 154 of the Income Tax Act, which the ITAT failed to address in their judgment.

• Counselvise Citation: [2013] 140 COUNSELVISE.COM (IT) 733851 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 10-12-2013
• Assessment Year: misc
• Other Referred Cases: Assistant Commissioner of Income-tax v. J.K.Synthetics Ltd., (2001) 251 ITR0200
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: AKSHAY BHAN; SUPRIYA GARG
• Assessee Lawyers: TEJENDER JOSHI
• Keywords: Additional tax; Assessment years; Income Tax; Jurisdiction error; Retrospective effect; Finance Act 1993
• Section: 154; 153(1)(a)

Judgement Text

"Income Tax Appeal No.214 of 1999 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income Tax Appeal No.214 of 1999 Date of Order: 10.12.2013. The Commissioner of Income Tax, Rohtak ...Appellant Versus M/s Escorts Employees Ancillaries Ltd., Faridabad. ..Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present: Mr. Tejender K. Joshi, Advocate for the appellant Mr. Akshay Bhan, Advocate and Ms. Supriya Garg, Advocate, for the respondent. RAJIVE BHALLA, J (Oral) The revenue is before us, challenging order dated 31.05.1999, passed by the Income Tax Appellate Tribunal, Delhi Bench “C”, Delhi, dismissing appeals filed by the revenue pertaining to assessment years 1989-90 and 1990-91, raising the following substantial question of law:- “Whether on the facts and in the circumstances of the case, the Hon'ble Tribunal was justified in deleting the additional tax and confirming the order of Ld. CIT(A) even ignoring the provisions relating to charging of additional tax which were amended by the Finance Act, 1993 with retrospective effect from 01.04.1989 i.e., after delivery of the Hon'ble High Court judgments relied upon by the Hon'ble ITAT?” Counsel for the revenue fairly concedes that the revenue has failed to frame a significant question, namely, that the Tribunal has failed to Kumar Naresh N 2013.12.17 10:51 I attest to the accuracy and integrity of this document High Court Chandigarh Income Tax Appeal No.214 of 1999 -2- consider an argument raised as to the illegality of order passed by the CIT (A), setting aside the order passed under Section 154 of the Income Tax Act (hereinafter referred to as 'the Act'). Counsel for the revenue prays that a substantial question of law may be framed accordingly. Counsel for the assessee, on the other hand, submits that as the revenue has not framed this question of law, it should not be allowed, at this belated stage, to frame an additional question of law as such a course would necessarily cause prejudice to the assessee. We have heard counsel for the parties on this preliminary issue, perused order passed by the CIT(A) as well as the order passed by the ITAT and are satisfied that the revenue did indeed raise an argument that the order passed by the CIT(A), setting aside the order passed under Section 154 of the Act, is contrary to law. The learned Tribunal, however, failed to deal with this argument. We, therefore, proceed to frame a substantial question of law in the following term:- “Whether the Income Tax Appellate Tribunal has committed an error of jurisdiction in failing to deal with the argument raised by the revenue that the Commissioner of Income Tax (Appeals) was not justified in setting aside the order passed under Section 154 of the Act?” A perusal of the order passed by the ITAT reveals that, though, arguments were addressed on the question of legality of order passed by the CIT(A), setting aside order passed by the Assessing Officer, invoking Section 154 of the Income Tax Act, the ITAT has not recorded any opinion thereon. The order passed by the ITAT, therefore, suffers from an error of jurisdiction and must necessarily be rectified. As regards the second substantial question of law, the CIT(A) Kumar Naresh N 2013.12.17 10:51 I attest to the accuracy and integrity of this document High Court Chandigarh Income Tax Appeal No.214 of 1999 -3- and the ITAT have apparently ignored Section 153(1)(a) as well as judgment of the Hon'ble Supreme Court of India in Assistant Commissioner of Income-tax v. J.K.Synthetics Ltd., (2001) 251 ITR0200, which, in our considered opinion, have a significant bearing on the controversy in hand, namely, whether additional income can be demanded if the addition so made still discloses a loss of income. In view of what has been recorded hereinabove, we allow the appeal, set aside the impugned order and remit the matter to the Income Tax Appellate Tribunal, Delhi Bench “C”, Delhi,, to decide the matter afresh and in accordance with law. Parties are directed to appear before the Income Tax Appellate Tribunal, Delhi Bench “C”, Delhi, on 30.01.2014. (RAJIVE BHALLA) JUDGE December 10, 2013 (DR. BHARAT BHUSHAN PARSOON) nt JUDGE Kumar Naresh N 2013.12.17 10:51 I attest to the accuracy and integrity of this document High Court Chandigarh "