HINDUSTAN LIVE STOCK AGENCY V. DEPUTY COMMISSIONER OF IT

MA/609/2008

AI Insights

The case involves multiple appeals by Hindustan Live Stock Agency against the Deputy Commissioner of Income Tax, Central Circle-1, concerning the condonation of delay in filing appeals and the jurisdiction for reassessment under Section 148 of the Income Tax Act, 1961. The Tribunal had previously allowed the condonation of a 10-day delay in filing appeals, which was contested by the appellant. The High Court of Patna dismissed the appeals, finding no substantial question of law, and upheld the Tribunal's decision on the grounds that the principles for condoning delay were correctly applied.

• Counselvise Citation: [2012] 140 COUNSELVISE.COM (IT) 726334 (HC-PATNA)
• Appeal Type: Others
• Pronouncement Date: 30-03-2012
• Assessment Year: misc
• Other Referred Cases: Collector, Land Acquisition v. Katiji [167 ITR 471 (SC)]
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: ARCHANA SINHA; HARSHWARDHAN PD
• Assessee Lawyers: KRISHNANDAN SINGH; KAMAL SHARMA; SRIRAM KRISHNA; SHIVJEE SINGH
• Keywords: Assessment; Condonation of delay; Income Tax; Jurisdiction; Limitation; Reassessment
• Section: 147; 148; 143(3); 254(2); 260A; 143(1)(a)

Judgement Text

"IN THE HIGH COURT OF JUDICATURE AT PATNA Miscellaneous Appeal No.609 of 2008 ====================================================== Hindustan Live Stock Agency, 1/158, Gali Bagichiwali, Punja Sharif, Kashmiri Gate, Delhi – 110 006 through its partner Rajeev Malik .... .... Appellant/s Versus Deputy Commissioner of Income Tax, Central Circle-1, Central Revenue Building, Patna-800 001. .... .... Respondent/s ====================================================== with Miscellaneous Appeal No.608 of 2008 Hindustan Live Stock Agency, 1/158, Gali Bagichiwali, Punja Sharif, Kashmiri Gate, Delhi – 110 006 through its partner Rajeev Malik .... .... Appellant/s Versus Deputy Commissioner of Income Tax, Central Circle-1, Central Revenue Building, Patna-800 001. .... .... Respondent/s ====================================================== with Miscellaneous Appeal No.610 of 2008 ====================================================== Hindustan Live Stock Agency, 1/158, Gali Bagichiwali, Punja Sharif, Kashmiri Gate, Delhi – 110 006 through its partner Rajeev Malik .... .... Appellant/s Versus Deputy Commissioner of Income Tax, Central Circle-1, Central Revenue Building, Patna-800 001. .... .... Respondent/s ====================================================== with Miscellaneous Appeal No.604 of 2008 ====================================================== Hindustan Live Stock Agency, 1/158, Gali Bagichiwali, Punja Sharif, Kashmiri Gate, Delhi – 110 006 through its partner Rajeev Malik .... .... Appellant/s Versus Deputy Commissioner of Income Tax, Central Circle-1, Central Revenue Building, Patna-800 001. .... .... Respondent/s ====================================================== Appearance : (In MA No.609 of 2008) For the Appellant/s : Dr.Krishnandan Singh, Sr.Adv. Dr.Kamal Deo Sharma Mr. Sriram Krishna Mr.Shivjee Singh Patna High Court MA No.609 of 2008 (6) dt.30-03-2012 2 For the Respondent/s : Mrs.Archana Sinha Mr.Harshwardhan Pd. (In MA No.608 of 2008) For the Appellant/s : Dr.Krishnandan Singh, Sr.Adv. Dr.Kamal Deo Sharma Mr. Sriram Krishna Mr.Shivjee Singh For the Respondent/s : Mrs.Archana Sinha Mr.Harshwardhan Pd (In MA No.610 of 2008) For the Appellant/s : Dr.Krishnandan Singh, Sr.Adv. Dr.Kamal Deo Sharma Mr. Sriram Krishna Mr.Shivjee Singh For the Respondent/s : Mrs.Archana Sinha Mr.Harshwardhan Pd (In MA No.604 of 2008) For the Appellant/s : Dr.Krishnandan Singh, Sr.Adv. Dr.Kamal Deo Sharma Mr. Sriram Krishna Mr.Shivjee Singh For the Respondent/s : Mrs.Archana Sinha Mr.Harshwardhan Pd ====================================================== CORAM: HONOURABLE MR. JUSTICE SHIVA KIRTI SINGH and HONOURABLE MR. JUSTICE VIKASH JAIN C.A.V. ORDER (Per: HONOURABLE MR. JUSTICE VIKASH JAIN 6 30.03.2012 The present appeals have been preferred by the appellant under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and are directed against a common order dated 16.5.2008 passed by the Income Tax Appellate Tribunal, Patna Bench, Patna (“Tribunal” for short) under Section 254(2) of the Act . 2. The following questions of law have been proposed for consideration in these appeals: Patna High Court MA No.609 of 2008 (6) dt.30-03-2012 3 (i) Whether a liberal construction of the words \"sufficient cause” ought to be made to condone limitation of a party not coming clean and making wrong/incorrect statements to explain the delay in filing of appeal by it ? (ii) Whether the Ld. Tribunal has acted properly in condoning delay despite incorrect statements made by the Revenue giving conjectural explanations to explain away the incorrect statement made? (iii) Whether on the facts and in the circumstances of this case the Respondent has made out a case of sufficient and bonafide cause to explain the delay in filing appeal by it for the period of limitation to be condoned ? (iv) Whether or not the Ld. Tribunal was obliged in the interest of justice to pronounce one way or another its opinion and judgments on all issues raised by the petitioner Appellant in its petition under Section 254(2) of the Act ? (v) Whether the Tribunal can justify and sustain the action of the Assessing Officer under Section 147 of the Act, in purporting to have reason to believe that income liable to tax had escaped assessment solely on basis of lodging of F.I.R. on the ground that public opinion, howsoever uninformed, had a bearing on his mind and that the Assessing Officer was under obligation to take note of it and act? 3. In M.A. No. 610/2008 the following two additional questions have also been proposed: (i) Whether or not the Ld. Tribunal was justified in reaching findings and coming to the conclusion on basis of facts and materials never brought on record at any stage of proceedings nor ever urged or submitted before it by either party even without giving the Appellants any opportunity whatsoever to rebut the same or on basis of baseless assumptions, conjectures and surmises? Patna High Court MA No.609 of 2008 (6) dt.30-03-2012 4 (ii) Whether or not baseless assumptions and conjectures far from true facts and/or admittedly pertaining to subsequent or previous Assessment Years and that too never brought on record can justifiably form the basis for the Ld. Tribunals order impugned? 4. Inasmuch as all the four appeals arise out of a common order of the Tribunal and are said to involve similar questions of law, the same were heard together as analogous cases and are being disposed of together for the sake of convenience 5. The brief facts leading up to the present appeals may be summarized hereunder. 6. The appellant is a registered partnership firm carrying on business in livestock and has been a regular assessee for the past several years. Returns for the years under reference were filed and summarily accepted under Section 143(1)(a) of the Act. 7. It appears that pursuant to investigation carried out in connection with the irregularities found in the Animal Husbandry Department, notices under Section 148 of the Act came to be issued by the Assessing Officer against the appellant for the years under reference. The appellant filed its return as required in the notice under Section 148 even while objecting to the assumption of jurisdiction of the Assessing Officer in this regard. Assessments under Section 143(3)/147 were made in due course, enhancing the income of the appellant and raising demands pursuant thereto for each of the years under reference. 8. The appellant successfully challenged the assessments in first appeals before the Commissioner of Income Tax (Appeals)-II, Patna, but Patna High Court MA No.609 of 2008 (6) dt.30-03-2012 5 second appeals were filed by the Respondent before the Tribunal resulting in the first appellate order being set aside and the matter remitted back to his board for adjudication of the appeal in accordance with law. 9. It is an admitted position that the aforesaid quantum order of the Tribunal passed on 26.02.2002 (27.02.2002 in M.A. No. 604/2008) disposed of the appeals on merits, without however disposing of the limitation petition filed by the respondent for condoning the delay of about 10 days in filing the appeals. 10. The appellants, after a considerable lapse of time on 29.01.2004, filed a miscellaneous application under Section 254 (2) of the Act before the Tribunal for rectification of errors not only with regard to the undecided issue of limitation, but also other factual matters claimed to be errors apparent from the record and amenable to rectification. Such miscellaneous application was disposed of by the Tribunal on 12.10.2006 allowing the issue relating to limitation only, holding that clearly there was a mistake apparent from records in not disposing of the condonation petitions, which needed to be rectified. Accordingly the main appeals decided by it were recalled for such limited purpose only. 11. In the above background, the impugned order dated 16.05.2008 came to be passed by the Tribunal whereby the limitation petitions filed by the respondent for condonation of delay of 10 days in filing the appeals were considered and allowed. As a result it was observed that the quantum orders passed by it earlier on 26.02.2002 (27.02.2002 in M.A. No. 604/2008) subsisted. Patna High Court MA No.609 of 2008 (6) dt.30-03-2012 6 12. A summary of the relevant dates relating to the four appeals are set out in the chart below for convenience and ready reference — Assmt. Year Present Appeals Quantum Appeals Before Tribunal U/s 254(2) Before Tribunal Tribunal’s Impugned Order M.A. Nos. I.T.A. Nos. Order Date M.A. Nos. Order Date Order Date …/2008 …(Pat) /2001 …/Pat/ 2004 1988-89 609 251 26.02.2002 13 12.10.2006 16.05.2008 1989-90 610 247 26.02.2002 10 12.10.2006 16.05.2008 1990-91 604 250 27.02.2002 12 12.10.2006 16.05.2008 1991-92 608 252 26.02.2002 14 12.10.2006 16.05.2008 13. Learned Senior Counsel for the petitioner Dr. Krishna Nandan Singh has sought to advance submissions assailing the very assumption of jurisdiction for issuance of notice under Section 148 of the Act and submits that in the absence of valid ‘reasons to believe’ that income had escaped assessment, initiation of the reassessment proceedings was itself unsustainable in law. It has therefore been submitted that the Tribunal had erred in merely setting aside the order of the Commissioner of Income Tax (Appeals) for fresh adjudication by its impugned order. It has next been contended that the Tribunal had passed the impugned order only disposing of the issue of limitation, but it had, however, failed to dispose of the various other issues raised in the miscellaneous applications u/s 254(2) and claimed to be errors apparent on the face of records. It was submitted that such points raised but not decided by the Tribunal gave rise to a substantial question of law which ought to be admitted for hearing before this Court. As regards delay of 10 days in filing of the appeal by the Patna High Court MA No.609 of 2008 (6) dt.30-03-2012 7 respondents before the Tribunal it has very fairly been submitted by Learned Senior Counsel for the Appellant that a small delay is not ordinarily objectionable but in the facts and circumstances of the case, the Department had not acted bona fide. It was borne out from the records that during the relevant period, the same authority had filed the appeals of another firm, Murrah Live Stock Agency, within time and there was thus no justification for not also taking steps in the present appeals within time. 14. Learned counsel for the respondents Mrs. Archana Sinha on the other hand, vehemently resisted the admission of the present appeals, submitting that no substantial question of law arose for consideration. It has been contended that at the stage of issuance of notice under Section 148, the Assessing Officer is authorised to act upon cogent information leading to a reason to believe that income had escaped assessment, which in these cases was adequately available by reason of the investigation by the Central Bureau of Investigation with regard to the irregularities in the Animal Husbandry Department. It has further been contended that the impugned order of the Tribunal is a detailed and reasoned one. It is only after consideration of all relevant facts and circumstances of the case as also the judicial decisions on the point of condonation of delay, that the limitation petition of the respondents had been allowed and therefore the said order of the Tribunal could not be faulted. 15. Having heard the learned counsels for the parties at length and upon going through the materials available on record, we are not Patna High Court MA No.609 of 2008 (6) dt.30-03-2012 8 satisfied that any substantial question of law arises in these appeals. 16. As regards the challenge to the jurisdiction for initiation of proceedings under Section 148, we find that the issue stood concluded by the Tribunal in its quantum order as far back as in February, 2002 itself. Such decision was however never called in question in appeal before this Court and which thus attained finality at that very stage and cannot be allowed to be delved into in the present proceedings. 17. As regards the issues other than on the point of limitation as raised by the appellant in its miscellaneous application filed before the Tribunal for rectification of errors under Section 254 (2) of the Act, once again we find that such applications were also duly disposed of by order dated 12.10.2006 wherein admittedly only the issue relating to condonation of delay was allowed and the quantum order was recalled for that limited purpose. It is however not in dispute that even though other issues raised by the appellants were not decided, the appellants neither preferred appeal against such order before this Court nor invited attention of the Tribunal in that regard seeking a further decision on the issues so remaining undisposed of. 18. It is therefore clearly more an afterthought at this belated stage that the appellants have chosen to file these appeals having missed the bus at the appropriate stages as noticed above. 19. The only issue that can, if at all, be said to arise out of the impugned order of the Tribunal is with regard to condonation of the 10 days’ delay in filing the appeal which has been allowed. However, on going through the impugned order, we find that the principles relevant Patna High Court MA No.609 of 2008 (6) dt.30-03-2012 9 for condoning delay as laid down in the various judicial decisions including the decision of the Apex Court in Collector, Land Acquisition v. Katiji [167 ITR 471 (SC)] have been duly applied, and in that view of the matter no substantial question of law can be said to arise for consideration. 20. In view of the facts and circumstances aforesaid, the appeals fail and are dismissed without however any order as to costs. Chandran (Vikash Jain, J) (Shiva Kirti Singh, J)-I agree. (Shiva Kirti Singh, J) "