M/S JINDAL STEEL AND POWER LTD V. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-1(1) GURGAON & ANR

CWP/25150/2016

AI Insights

The case involves four connected writ petitions filed by M/s Jindal Steel and Power Ltd. against the Deputy Commissioner of Income Tax, Circle -1 (1), Gurgaon, concerning reassessment and penalties imposed for the assessment years 2009-2010 and 2010-2011. The core issue was the requirement of maintaining separate books of accounts for different units, which the petitioner contested. The High Court referenced its earlier decision in Commissioner of Income Tax, Panchkula vs. Micro Instruments Co, which established that such a requirement was not statutory. The court found that the reassessment and subsequent penalties were improperly based on this non-existent requirement, leading to the quashing of the orders against the petitioner.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 771619 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 22-04-2024
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax, Panchkula vs. Micro Instruments Co, (2016) 388 ITR 46 (Punjab and Haryana)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: VARUN ISSAR
• Assessee Lawyers: SALIL KAPOOR; TARUN CHANANA; SUMIT LAKHANDANI; ANANYA KAPOOR
• Keywords: Penalty; Re-assessment; Separate books of accounts; Micro Instruments case
• Section: 148; 271(1)(c); 275; 156

Judgement Text

"CWP No. 25150-2016 and connected cases 2024:PHHC:054102-DB 1 216 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH 1. CWP No. 25150-2016 M/s Jindal Steel and Power Ltd. ....Petitioner vs. The Dy. Commissioner of Income Tax, Circle -1 (1), Gurgaon and anr. ...Respondents 2. CWP No. 26688-2017 M/s Jindal Steel and Power Ltd. ....Petitioner vs. The Dy. Commissioner of Income Tax, Circle -1 (1), Gurgaon and anr. ...Respondents 3. CWP No. 22493-2018 M/s Jindal Steel and Power Ltd. ....Petitioner vs. The Dy. Commissioner of Income Tax, Circle -1 (1), Gurgaon and anr. ...Respondents 4. CWP No. 22495-2018 M/s Jindal Steel and Power Ltd. ....Petitioner vs. The Dy. Commissioner of Income Tax, Circle -1 (1), Gurgaon and anr. ...Respondents Date of Decision:-22.04.2024 CORAM: HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MRS. JUSTICE SUDEEPTI SHARMA Present: Mr. Salil Kapoor, Advocate, Mr. Tarun Chanana, Mr. Sumit Lakhandani & Ms. Ananya Kapoor, Advocates for the petitioner (s) Mr. Varun Issar, Jr. Panel counsel for the respondents-department. Gaurav Arora 2024.05.08 16:10 I attest to the accuracy and integrity of this document CWP No. 25150-2016 and connected cases 2024:PHHC:054102-DB 2 *** SANJEEV PRAKASH SHARMA, J. (Oral) 1. This order shall dispose of four connected writ petitions as the issue involved in all the writ petitions is common. 2. Both the counsels are ad idem that the issue raised by the assessee in the above petitions is finalised by this Court in Commissioner of Income Tax, Panchkula vs. Micro Instruments Co, (2016) 388 ITR 46 (Punjab and Haryana), wherein this Court held that separate books of accounts for different units of assessee for a particular assessment year are not required to be maintained, as per statute. The said position of law has been settled by this Court in Micro Instruments case (supra). 3. Learned counsel for the revenue/respondent submits that the law as settled by this Court in Micro Instruments case (supra) has been duly accepted by the department and has thus attained finality. 4. In the present case, the proceedings of the assessment for the year 2009-2010 and 2010-11 were initiated under Section 148 of the Income Tax Act, 1961 solely on the ground that separate books of accounts had not been maintained for different units. On the said basis, the penalty was imposed upon the petitioner-company. 5. Now, the petitioner has preferred four different writ petitions. In CWP No. 25150-2016, the petitioner has challenged the notice dated 31.03.2016 issued under Section 148 of the Act for the assessment year 2009-2010 and order dated 11.11.2016 disposing of the legal objections filed by the petitioner. 6. In CWP No. 26688-2017, the petitioner has challenged the Gaurav Arora 2024.05.08 16:10 I attest to the accuracy and integrity of this document CWP No. 25150-2016 and connected cases 2024:PHHC:054102-DB 3 notice dated 22.03.2017 issued under Section 148 of the Act for the assessment year 2010-2011 and order dated 07.11.2017 disposing of the legal objections raised by the petitioner. 7. In CWP No. 22495-2018, the petitioner has challenged the order dated 30.06.2017 passed under Section 271 (1) ( C ) of the Act, notice dated 30.06.2017 issued under Section 156 of the Act for the assessment year 2009-2010 and order dated 30.12.2016 imposing penalty. 8. In CWP No. 22493-2018, the petitioner has challenged the order dated 29.06.2018 passed under Section 271 (1) ( C ) of the Act, notice dated 29.06.2018 issued under Section 156 of the Act for the assessment year 2010-2011 & order dated 28.12.2017 imposing the penalty. 9. Learned counsel for the petitioner (s) submit that this Court had passed order dated 06.12.2016 staying the implementation of the reassessment order, if any. However, the respondents proceeded to pass the order and imposed penalty, which could not have been done, in terms of Section 275 of the Act. 10. As we have already noticed the law laid down in Micro Instruments case (supra), stands crystalized. Keeping in view thereof, the entire proceedings initiated under Section 148 of the Act for the assessment years 2009-2010 and 2010-2011, whereby re-assessment was done and penalty was imposed, cannot be allowed to be sustained. The sole basis for initiating the proceedings were on the ground on non-maintaining of separate books of accounts for different units. Since the basis of the proceedings initiated is found to be illegal, all the subsequent actions would also stand vitiated in law and would have to go. 11. In view of the above, the orders impugned as noticed here-in- Gaurav Arora 2024.05.08 16:10 I attest to the accuracy and integrity of this document CWP No. 25150-2016 and connected cases 2024:PHHC:054102-DB 4 above in the various writ petitions, are liable to be quashed and set aside. We accordingly set aside them. The re-assessment orders and penalties imposed would also stands set aside. If the petitioner (s) has deposited any amount or any further action has been taken on the basis thereto, the same would also stand vitiated. 12. Accordingly, the writ petitions stand allowed 13. No order as to costs. 14. Pending application (s) if any, also stand disposed of. (SANJEEV PRAKASH SHARMA) JUDGE April 22, 2024 (SUDEEPTI SHARMA) G Arora JUDGE Whether speaking/reasoned : Yes/No Whether reportable : Yes/No Gaurav Arora 2024.05.08 16:10 I attest to the accuracy and integrity of this document "