Compucom Software Limited V. Principal Commissioner Of Income Tax, Jaipur 2

ITA/3/2023

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Compucom Software Limited appealed against the order of the ITAT, which remanded the matter back to the PCIT for fresh consideration instead of setting aside the revisional proceedings under Section 263 of the Income Tax Act. The case arose from an initial assessment where the appellant's income was assessed at Rs. 11.17 crores, following which the PCIT found the assessment order to be prejudicial to the interests of the revenue and issued a notice under Section 263. The appellant contested the lack of adequate opportunity to respond to the notice, which was filed and heard at the end of the financial year. The ITAT acknowledged the violation of natural justice but only remanded the case for a fresh assessment. The High Court, referencing the Supreme Court's decision in Steel Authority of India Ltd. vs. Designated Authority, upheld the ITAT's decision, emphasizing that the tribunal's conclusion was a possible one and thus should stand.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 680040 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 03-10-2023
• Assessment Year: misc
• Other Referred Cases: Ashutosh Bhargava vs. PCIT-2 Jaipur, Maneka Gandhi vs. Union of India and Ors., M/s M.L. Chains vs The Pr. Commissioner of Income Tax-1 & Ors.
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: SIDDHARTH RANKA; APEKSHA BAPNA
• Keywords: Assessment Order; Income Tax; Natural Justice; Remand; Revisionary Power
• Section: 143(3); 263; 260A

Judgement Text

" [2023:RJ-JP:27439-DB] (1 of 5) [ITA-3/2023] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 3/2023 Compucom Software Limited, Having Its Address At It-14-15, Epip Sitapura, Jaipur. ----Appellant Versus Principal Commissioner Of Income Tax, Jaipur 2, Jaipur, Having Its Address At New Central Revenue Building, Bhagwan Dad Road, Jaipur ----Respondent For Appellant(s) : Mr. Siddharth Ranka with Ms. Apeksha Bapna HON'BLE THE CHIEF JUSTICE AUGUSTINE GEORGE MASIH HON'BLE MR. JUSTICE SAMEER JAIN Order 03/10/2023 ORAL 1. Being aggrieved and dissatisfied with the impugned order dated 31.08.2022, passed by the learned Income Tax Appellate Tribunal, Jaipur Bench, Jaipur (for short “ITAT”), in Income Tax Appeal No. 153/JP/2022, whereby the appeal of the appellant- assessee was allowed to the extent of remanding the matter back to Principal Commissioner of Income Tax (for short “PCIT”) for afresh consideration, the present appeal has been filed by the appellant-assessee under Section 260A of the Income Tax Act, 1961 (for short “IT Act”). 2. Heard learned counsel for the appellant-assessee. 3. Learned counsel for the appellant-assessee submits that the appellant-assessee filed its return of income on 28.11.2017 for the FY 2017-2018 declaring the total income at Rs. [2023:RJ-JP:27439-DB] (2 of 5) [ITA-3/2023] 10.91 crores (approx). The said return was selected for scrutiny and thereafter the Additional Commissioner of Income Tax (for short “ACIT”) passed an assessment order dated 17.12.2019 under Section 143(3) of the IT Act wherein the total income was assessed at Rs. 11.17 crores (approx) after making additions of Rs. 25.89 lakhs (approx) under various heads. The PCIT, in exercise of his revisionary power, found the assessment order to be prejudicial and against the interest of the revenue and accordingly issued notice to the appellant-assessee under Section 263 of the IT Act on 12.03.2022 and date of hearing was fixed on 21.03.2022. It is contended that since the notice and date of hearing were fixed at the fag end of the financial year, the appellant-assessee filed an adjournment application on 21.03.2022 on the Income Tax Portal and the said application was successfully submitted. However, despite that, the PCIT passed the order dated 27.03.2023 with the specific observation that since no reply was filed by the appellant-assessee, the order is being passed on the basis of material available on record. The said order dated 27.03.2023 was assailed before the ITAT and the ITAT, vide order dated 31.08.2022 allowed the appeal, by noting that there were violations of principles of natural justice, but only to the extent of remitting the matter back to the PCIT. 4. The primary grievance of the appellant-assessee is that the ITAT, in the case of Ashutosh Bhargava vs. PCIT-2 Jaipur (ITA No. 20/JP/2021; decided on 06.01.2022), in similar facts and circumstances, had set aside the entire revisional proceedings initiated under Section 263 of the IT Act, whereas in [2023:RJ-JP:27439-DB] (3 of 5) [ITA-3/2023] the case of the appellant-assessee, the matter was remanded back to the PCIT. Reliance was also placed on Apex Court judgment of Maneka Gandhi vs. Union of India and Ors. reported in AIR 1978 SC 597 and judgment of Allahabad High Court in the case of M/s M.L. Chains vs The Pr. Commissioner of Income Tax-1 & Ors. (Writ Tax No. 638/2022; Decided on 16.08.2023; Neutral Citation: 2023:AHC:163882) 5. Having heard the learned counsel for the appellant- assessee and upon consideration of the material on record, this Court is of the considered view that the contentions raised by the appellant, asserting that the entire proceedings initiated under Section 263 of the IT Act should be set aside, is not tenable for the following reasons: 5.1) Because it is undisputed that proceedings under Section 263 of the IT Act were initiated well within the statutory time limit, albeit towards the fag end; 5.2) Because the appellant-assessee was afforded a reasonable opportunity of hearing and to present their contentions, even though the notice period for hearing was somewhat short on account of impending expiration of the assessment period. 5.3) Because the adjournment application was also filed by the appellant-assessee on the day of the hearing, despite reasonable opportunity being given. 5.4) Because the reliance placed upon the order of Ashutosh Bhargava (supra), issued by the ITAT, is predicated on distinguishable factual circumstances. In the case of Ashutosh Bhargava (supra), the assessee was an individual, and it was observed that sufficient time and opportunity had not been provided to him. It is noteworthy that the [2023:RJ-JP:27439-DB] (4 of 5) [ITA-3/2023] factual matrix in the present case is disparate from that of Ashutosh Bhargava(supra). Even otherwise, it is imperative to recognize that the said order emanated from the ITAT and does not possess binding authority over this Court. 5.5) Because the ITAT, in its considered judgment, took note of the fact that the assessee was not accorded sufficient opportunity during the prior proceedings, thereby deviating from the principles of natural justice. Consequently, the ITAT exercised its discretion to remand the case for afresh consideration. It is essential to underscore that such a decision cannot be characterized as perverse. Given the circumstances at hand, the remand order stands as a valid and appropriate course of action. 6. An appeal from the order of the learned ITAT can only be admitted on a substantial question of law. The law on admitting an appeal from an order of a tribunal, on substantial question of law, has been clarified by the Hon’ble Supreme Court in Steel Authority of India Ltd. vs. Designated Authority, Directorate General of Anti- Dumping and Allied Duties and Ors. (Neutral Citation: 2017/INSC/356) reported in (2017) 13 SCC 1, wherein the Apex Court has held that if the tribunal, on consideration of the material and relevant facts, had arrived at a conclusion which is a possible conclusion, the same must be allowed to rest even if the higher Courts are inclined to take another view of the matter. 7. In light of the prevailing facts and circumstances, when substantial relief has already been granted, there exists no justifiable reason to intervene or formulate substantial questions of law. [2023:RJ-JP:27439-DB] (5 of 5) [ITA-3/2023] 8. Accordingly, the present appeal stands dismissed. Pending application(s), if any, shall stand disposed of. (SAMEER JAIN),J (AUGUSTINE GEORGE MASIH),CJ Pooja /19 "