Kunal Calcium Limited V. Commissioner of Income Tax, Panchkula

CWP/9099/2013

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M/s Kunal Calcium Limited challenged an order by the Income Tax Settlement Commission, which denied their request to deduct \'80,00,000 paid as excise duty from their undisclosed income for the assessment year 2008-09. The Commission had previously applied a gross profit rate on the undisclosed income, which the petitioner contested. The High Court found no patent illegality in the Commission's decision, noting that the petitioner had not initially included the excise duty in their disclosed income, and thus, could not benefit from it in the rectification application.

• Counselvise Citation: [2014] 140 COUNSELVISE.COM (IT) 804899 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 19-05-2014
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: YOGESH PUTNEY
• Assessee Lawyers: AKSHAY BHAN; ANIMESH SHARMA
• Keywords: Excise Duty; Gross Profit Rate; Income tax settlement commission; Rectification Application; Undisclosed income
• Section: 43B

Judgement Text

"CWP No.9099 of 2013 -1- IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH CWP No.9099 of 2013 Date of Decision:19.05.2014 M/s Kunal Calcium Limited ...Petitioner Versus Commissioner of Income Tax, Panchkula ...Respondents and others CORAM:HON'BLE MR. JUSTICE HEMANT GUPTA HON'BLE MR. JUSTICE FATEH DEEP SINGH Present: Mr. Akshay Bhan, Senior Advocate with Mr. Animesh Sharma, Advocate for the petitioner. Mr. Yogesh Putney, Advocate for the respondents. HEMANT GUPTA, J. The challenge in the present writ petition is to an order passed on 21st December, 2012 passed by the Income Tax Settlement Commission (for short, 'the Commission') on an application for rectification of the order passed on 22nd June, 2012. The Petitioner has claimed benefit of the amount of excise duty of `80 lacs, in the rectification application which remained unsuccessful. The petitioner invoked the jurisdiction of the Commission in respect of three assessment years i.e. 2004-05, 2007-08 and 2008-09. Considering the said request of the petitioner for Sharma Aarti 2014.05.23 10:47 I attest to the accuracy and integrity of this document CWP No.9099 of 2013 -2- settlement, the Commission passed an order dated 22.6.2012 applying gross profit rate on the un-disclosed income. The assessment year in question is assessment year 2008-09 wherein, gross profit rate applied was 17.06% on the un-disclosed income of `53,70,680/-. The income as per petitioner was `18,13,650/- whereas, the undisclosed income in the statement was `12,87,529 The grievance of the petitioner is, while calculating undisclosed income, he has not been given benefit of `80,00,000/- which is the amount of excise duty paid during the financial year 2007-08 relevant to the assessment years 2008-09. Therefore, the rectification of the mistake in the order of the Commission was sought. The Commission found that in a petition for settlement, the petitioner has reflected total income returned as `18,13,650, in addition thereto, the petitioner has reflected undisclosed income as `12,87,529. After noticing the said fact, the Commission observed as under:- “The above working of income calculated by the applicant clearly indicates that the applicant had worked out its undisclosed income at a figure of `12,87,529/- and more importantly shown it as the net figure after taking into account the payment of Excise duty which was amounting to `80 lakhs. Therefore as per the applicants own calculation, the undisclosed income arising to it was a sum of `92,87,529/- (`12,87,529+ `80,00,000). As against this figure of `12,87,529 the Commission estimated the income of the applicant for the assessment year 2008-09 at the sum of `53,70,680/. Thus, there was an addition of `40,83,151. The plea of the Sharma Aarti 2014.05.23 10:47 I attest to the accuracy and integrity of this document CWP No.9099 of 2013 -3- applicant is that once this addition was made, by an application of G.P rate then it should be allowed a deduction under Section 43B of the amount of `80 lakhs. The plea of the applicant, if accepted, would mean that the income of the applicant for the assessment year 2008-2009 would be settled at a figure which is lower by `39,16,849, than the figure himself declared by the applicant in the SOF. After considering the facts discussed above, we are of the view that there is no mistake apparent from records on this issue.” We have heard learned counsel for the parties and find that the order of the Commission does not suffer from any patent illegality, which may warrant any interference in the exercise of the writ jurisdiction of this Court. Admittedly, the petitioner has not reflected sum of `80,00,000/- as amount of excise duty paid during the assessment year 2008-09 in the statement of the case filed before the Commission. The Commission has noticed that if such amount would have been disclosed, the income would be lower than the income declared by the petitioner in his statement of facts. It appears that by not reflecting the disclosed income for payment of excise duty, the petitioner wishes to take benefit of payment of excise duty in the rectification application. The Commission is the authority competent to examine the extent of undisclosed income. The Commission has framed an opinion that the benefit of the amount of the excise duty can not be given to the petitioner as it would negate even the undisclosed Sharma Aarti 2014.05.23 10:47 I attest to the accuracy and integrity of this document CWP No.9099 of 2013 -4- income shown in the statement of facts. Such opinion is possible finding as per the facts noticed by the Commission. In view thereof, we do not find any illegality in the order passed by the Commission, which may warrant any interference by this Court. Dismissed. (HEMANT GUPTA) JUDGE 19.05.2014 (FATEH DEEP SINGH) aarti JUDGE Sharma Aarti 2014.05.23 10:47 I attest to the accuracy and integrity of this document "