HARI RAM YADAV V. PRINCIPAL COMMISSIONER OF INCOME TAX

ITA/50/2019

AI Insights

The case involves Hari Ram Yadav, the appellant, who contested the decision of the Income Tax Appellate Tribunal (ITAT) regarding an order under Section 263 of the Income Tax Act, 1961. The original scrutiny assessment by the Assessing Officer (AO) was deemed erroneous and prejudicial to the interests of the revenue by the Commissioner, leading to a revisional order. The appellant argued that the notice under Section 263 was improperly issued by the AO instead of the Commissioner and that the AO had conducted due diligence in the original assessment. However, both the ITAT and the High Court rejected these contentions, affirming the validity of the revisional powers exercised by the Commissioner.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 770865 (HC-RAJASTHAN)
• Appeal Type: Others
• Pronouncement Date: 19-07-2019
• Assessment Year: misc
• Other Referred Cases: CIT Vs. Amitabh Bachchan, (2016) 384 ITR 200
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: SIDDHARTH RANKA
• Keywords: Erroneous order; Income tax appeal; Prejudicial to the interests of the revenue; Revisional power; Scrutiny assessment
• Section: 143(3); 263; 260A

Judgement Text

"HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 50/2019 Hari Ram Yadav, 302, Tiwara Bus Stand, Behind Government School, Umrain, Alwar In The State Of Rajasthan ----Appellant Versus Principal Commissioner Of Income Tax, Alwar Having Its Address At Aayakar Bhawan, Moti Doongri Road, Alwar 301001 In The State Of Rajasthan ----Respondent For Appellant(s) : Mr. Siddharth Ranka, Adv. HON'BLE THE CHIEF JUSTICE HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA Judgment 19/07/2019 1. The Assessee in appeal under Section 260A of the Income Tax Act, 1961 questioned the decision of the Income Tax Appellate Tribunal which upheld the Commissioner’s order under Section 263. 2. The brief facts are that the Assessing Officer (AO), by the original scrutiny assessment order under Section 143(3) made on 28.03.2016, assessed the returns of the appellant at `21,03,840/-. On the ground that the order of the AO was erroneous and prejudicial to the interests of the revenue, the Commissioner caused a notice to be issued to the assessee and after considering the reply, made an order under Section 263. This became the subject matter of an appeal to the ITAT. 3. In the appeal the grounds urged were, firstly that the notice under Section 263 was not issued by the proper authority but by the AO and, secondly that in fact the revisional power could not have been exercised because in the original scrutiny assessment due care and enquries had been made by the AO. The ITAT however, rejected both the contentions. (2 of 2) [ITA-50/2019] 4. Learned Counsel reiterated his submissions and grounds urged in support of the appeal. It was argued that CIT in fact did not issue notice, as is evident from the copy produced on record; instead it was issued by the AO. Learned Counsel urged that such a course is not only irregular but contrary to the mandate of Section 263. It was next contended that the AO, as a matter of fact, in the present case, had diligently made enquries (about the advances received against sale of land in respect of about 72 purchasers). It was submitted that the AO in fact test checked the veracity of this amount by issuing notice to about 6 to 7 parties. 5. This Court has considered the submissions. 6. The ITAT exhaustively dealt with the assessee’s contentions, and referred to the latest decision of the Supreme Court in CIT Vs. Amitabh Bachchan, (2016) 384 ITR 200 which referred to different shades of powers conferred upon the authorities under the Income Tax Act. If one may add the defect in law and of the analyses of the facts by the AO, in the first instance, is curable by the Commissioner, provided a notice under Section 263, if validly exercised, in the present case. 7. This Court is of the opinion that the grounds listed in the notice, constituted a reasonable and valid rationale for invoking revisional power. As far as the other grounds are concerned, this Court is of the opinion that the ITAT’s decision cannot be faulted. The notice itself stated that the Principal Commissioner had directed its issuance- the AO appears to have signed it merely in his ministerial capacity. The ITAT also looked into the record of the case while returning its findings. Therefore, no substantial question of law arises. 8. The appeal is accordingly dismissed. (SANJEEV PRAKASH SHARMA),J (S. RAVINDRA BHAT),CJ Kamlesh Kumar-NAVAL KISHOR /1 "