PCIT ROHTAK V. MS DIN DAYAL PURUSHOTAM LAL

ITA/110/2024

AI Insights

The case involves appeals by the Revenue against the order of the Income Tax Appellate Tribunal (ITAT), which had cancelled the order passed by the Principal Commissioner of Income Tax (Pr.CIT) under section 263 of the Income Tax Act, 1961. The Pr.CIT's order was based on the assertion that the Assessing Officer (AO) had not conducted a proper inquiry, which was claimed to be erroneous and prejudicial to the interests of the revenue. However, the ITAT found that the AO had indeed conducted a thorough examination of the books of accounts and other relevant documents. The High Court, after reviewing the ITAT's detailed judgment and the records, concurred with the ITAT's findings and dismissed the appeals, noting that the ITAT had correctly applied the law as settled by the Supreme Court in similar cases.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 690644 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 16-12-2024
• Assessment Year: misc
• Other Referred Cases: Malabar Industries Co. Ltd. vs CIT, (2000) 243 ITR 83 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Assessee Lawyers: GAURI RAMPAL
• Keywords: Assessment Order; Condonation of delay; Erroneous order; Income Tax; Prejudicial to revenue
• Section: 263

Judgement Text

" ITA-110-2024(O&M) and connected case 106 (2 cases) IN THE HIGH COURT OF PUNJAB AND HARYANA AT 1. PRINCIPAL COMMISSIONER OF INCOME TAX, M/S DIN DAYAL PURUSHOTAM LAL 2. PRINCIPAL COMMISSIONER OF INCOME TAX, M/S DIN DAYAL PURUSHOTAM LAL CORAM: HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE Present: Ms. Gauri Neo Rampal, Sr. Standing Counsel for the SANJEEV PRAKASH SHARMA, J.(Oral) CM-15510-CII Applications for condonation of delay of 18 days in filing of respective appeals are allowed, and accordingly delay is condoned. Main cases 1. The Revenue is in appeal assailing the order of the Income Tax Appellate Tribunal (ITAT) ITA Appeals for AYs: (O&M) and connected case Page 1 of 4 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH PRINCIPAL COMMISSIONER OF INCOME TAX, Vs. S DIN DAYAL PURUSHOTAM LAL **** PRINCIPAL COMMISSIONER OF INCOME TAX, Vs. S DIN DAYAL PURUSHOTAM LAL **** HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON’BLE MR. JUSTICE SANJAY VASHISTH Ms. Gauri Neo Rampal, Sr. Standing Counsel for the appellant/Revenue. **** SANJEEV PRAKASH SHARMA, J.(Oral) CII-2024 and CM-15690-CII-2024 Applications for condonation of delay of 18 days in filing of respective appeals are allowed, and accordingly delay is condoned. The Revenue is in appeal assailing the order of the Income Tax Appellate Tribunal (ITAT), whereby it decided by a common order in ITA Appeals for AYs: 2011-12, 2015-16 and 2017 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Date of Decision: 16.12.2024 ITA-110-2024 (O&M) PRINCIPAL COMMISSIONER OF INCOME TAX, ROHTAK . . . . Appellant . . . . Respondent ITA-112-2024 (O&M) PRINCIPAL COMMISSIONER OF INCOME TAX, ROHTAK . . . . Appellant . . . . Respondent HON’BLE MR. JUSTICE SANJEEV PRAKASH SHARMA SANJAY VASHISTH Ms. Gauri Neo Rampal, Sr. Standing Counsel (through VC) SANJEEV PRAKASH SHARMA, J.(Oral) 2024 Applications for condonation of delay of 18 days in filing of respective appeals are allowed, and accordingly delay is condoned. The Revenue is in appeal assailing the order of the Income Tax y it decided by a common order in 16 and 2017-18. .2024 (O&M) Appellant . . . . Respondent (O&M) Appellant . . . . Respondent Applications for condonation of delay of 18 days in filing of The Revenue is in appeal assailing the order of the Income Tax y it decided by a common order in MOHIT GOYAL 2024.12.17 17:55 I attest to the accuracy and integrity of this document ITA-110-2024(O&M) and connected case 2. The Revenue has filed two appeals and has raised questions stated to be substantial questions of law that the ITAT was not right in cancelling Income Tax Act, 1961 (for short 3. We have carefully gone through the detailed judgment passed by the ITAT who has reached to the conclusion after considering the law as settled by this Cour section 263 of the Act. It has looked into the entire record and had reached to the conclusion that the Assessing Officer (for short ‘AO’) had conducted a detailed enquiry and examined the books of accounts as well as queries deletions having been made by the concerned books, the AO has added income in terms of the books of accounts and after having looked into the bank accounts w have been deposited, it 4. The Supreme Court ITR 83 (SC) that the pre Commissioner suo moto under it, is that the order of the Income to the interests of the revenue. The Commissioner has to be satisfied of twin Assessing Officer sought to be revised is erroneous; and (ii) it them is absent erroneous but is not prejudicial to the revenue or if it is n (O&M) and connected case Page 2 of 4 The Revenue has filed two appeals and has raised questions stated to be substantial questions of law that the ITAT was not right in cancelling the order of the Pr.CIT passed under section 263 of the Income Tax Act, 1961 (for short ‘the Act’ We have carefully gone through the detailed judgment passed by the ITAT who has reached to the conclusion after considering the law as settled by this Court with regard to the powers to be exercised under section 263 of the Act. It has looked into the entire record and had reached to the conclusion that the Assessing Officer (for short ‘AO’) had conducted a detailed enquiry and examined the books of accounts as well as queries had been particularly raised relating to the issue of deletions having been made by the concerned books, the AO has added income in terms of the books of accounts and after having looked into the bank accounts w have been deposited, it reached to the conclusion. The Supreme Court in Malabar Industries Co. Ltd. vs CIT, (2000) 243 ITR 83 (SC) has held as under: “6. A bare reading of this provision makes it clear that the pre-requisite to exercise of jurisdiction by Commissioner suo moto under it, is that the order of the Income-tax Officer is erroneous insofar as it is prejudicial to the interests of the revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the revenue. If one of them is absent - if the order of the Income erroneous but is not prejudicial to the revenue or if it is n The Revenue has filed two appeals and has raised questions stated to be substantial questions of law that the ITAT was not right in the order of the Pr.CIT passed under section 263 of the Act’). We have carefully gone through the detailed judgment passed by the ITAT who has reached to the conclusion after considering the law as t with regard to the powers to be exercised under section 263 of the Act. It has looked into the entire record and had reached to the conclusion that the Assessing Officer (for short ‘AO’) had conducted a detailed enquiry and examined the books of accounts had been particularly raised relating to the issue of deletions having been made by the concerned AO. After examining the books, the AO has added income in terms of the books of accounts and after having looked into the bank accounts where the amounts found to to the conclusion. Malabar Industries Co. Ltd. vs CIT, (2000) 243 6. A bare reading of this provision makes it clear exercise of jurisdiction by the Commissioner suo moto under it, is that the order of the tax Officer is erroneous insofar as it is prejudicial to the interests of the revenue. The Commissioner has to be conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and is prejudicial to the interests of the revenue. If one of if the order of the Income-tax Officer is erroneous but is not prejudicial to the revenue or if it is not The Revenue has filed two appeals and has raised questions stated to be substantial questions of law that the ITAT was not right in the order of the Pr.CIT passed under section 263 of the We have carefully gone through the detailed judgment passed by the ITAT who has reached to the conclusion after considering the law as t with regard to the powers to be exercised under section 263 of the Act. It has looked into the entire record and had reached to the conclusion that the Assessing Officer (for short ‘AO’) had conducted a detailed enquiry and examined the books of accounts had been particularly raised relating to the issue of fter examining the books, the AO has added income in terms of the books of accounts and here the amounts found to Malabar Industries Co. Ltd. vs CIT, (2000) 243 MOHIT GOYAL 2024.12.17 17:55 I attest to the accuracy and integrity of this document ITA-110-2024(O&M) and connected case erroneous but is prejudicial cannot be had to Section 263(1) of the Act. be invoked to correct each and every type of error committed by the Assessing Officer; it is an order is erroneous that the incorrect assumption of facts or an incorrect application of law will erroneous. In the same category fall orders passed applying the application of mind. 5. We are of firm view that the power contained under section 263 of the Act can be exercised only with respect to cases where it is found that the AO has not conducted the enquiry, and resultantly, loss has been caused to the department. to be erroneous so far as it is prejudicial to the interest of the Revenue, and for the said purpose, a finding has to be arrived that no enquiry was done. If there are two views available for the AO to take a decision after condu the AO would be erroneous, and the CIT could not have turned aside the order of the AO on the said count have been taken by the AO. 6. We are satisfied that there has conducting the enquiry. All the documents have been looked into by the ITAT and a 7. Thus, we find that the power of revision as exercised by the Pr.CIT under section 26 (O&M) and connected case Page 3 of 4 erroneous but is prejudicial to the revenue cannot be had to Section 263(1) of the Act. 7. There can be no doubt that the provision cannot be invoked to correct each and every type of error committed by the Assessing Officer; it is an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed applying the principles of natural justice or without application of mind.” We are of firm view that the power contained under section 263 of the Act can be exercised only with respect to cases where it is found that the AO has not conducted the enquiry, and resultantly, loss has been caused to the department. Sine qua non to be erroneous so far as it is prejudicial to the interest of the Revenue, and for the said purpose, a finding has to be arrived that no enquiry was done. If there are two views available for the AO to take a decision after conducting enquiry, it cannot be said that the decision taken by the AO would be erroneous, and the CIT could not have turned aside the order of the AO on the said count have been taken by the AO. We are satisfied that there has been no undue haste by the AO in conducting the enquiry. All the documents have been looked into by the ITAT and a detailed judgment has been passed on facts of the case. Thus, we find that the power of revision as exercised by the Pr.CIT under section 263 of the Act, being different from the powers to be to the revenue - recourse cannot be had to Section 263(1) of the Act. 7. There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when section will be attracted. An incorrect assumption of facts or an incorrect application of satisfy the requirement of the order being erroneous. In the same category fall orders passed without principles of natural justice or without We are of firm view that the power contained under section 263 of the Act can be exercised only with respect to cases where it is found that the AO has not conducted the enquiry, and resultantly, loss has been Sine qua non is that the assessment order has to be erroneous so far as it is prejudicial to the interest of the Revenue, and for the said purpose, a finding has to be arrived that no enquiry was done. If there are two views available for the AO to take a decision cting enquiry, it cannot be said that the decision taken by the AO would be erroneous, and the CIT could not have turned aside the order of the AO on the said count that a different decision should been no undue haste by the AO in conducting the enquiry. All the documents have been looked into by judgment has been passed on facts of the case. Thus, we find that the power of revision as exercised by the Pr.CIT being different from the powers to be We are of firm view that the power contained under section 263 of the Act can be exercised only with respect to cases where it is found that the AO has not conducted the enquiry, and resultantly, loss has been the assessment order has to be erroneous so far as it is prejudicial to the interest of the Revenue, and for the said purpose, a finding has to be arrived that no enquiry was done. If there are two views available for the AO to take a decision cting enquiry, it cannot be said that the decision taken by the AO would be erroneous, and the CIT could not have turned aside a different decision should been no undue haste by the AO in conducting the enquiry. All the documents have been looked into by Thus, we find that the power of revision as exercised by the Pr.CIT being different from the powers to be MOHIT GOYAL 2024.12.17 17:55 I attest to the accuracy and integrity of this document ITA-110-2024(O&M) and connected case exercised in appeal ITAT, therefore, does not warrant any interference. No substantial question of law is required to be examined by us in the present a Accordingly, we do not find any 8. Appeals are dismissed accordingly. 9. All pending applications also stand disposed of. December 16, 2024 Mohit goyal 1. Whether speaking/reasoned? 2. Whether reportable? (O&M) and connected case Page 4 of 4 exercised in appeal, is not sustainable in law. The order passed by the ITAT, therefore, does not warrant any interference. No substantial question of law is required to be examined by us in the present a Accordingly, we do not find any merits in the present appeals. Appeals are dismissed accordingly. All pending applications also stand disposed of. (SANJEEV PRAKASH SHARMA , 2024 1. Whether speaking/reasoned? Yes/No 2. Whether reportable? Yes/No not sustainable in law. The order passed by the ITAT, therefore, does not warrant any interference. No substantial question of law is required to be examined by us in the present appeals. merits in the present appeals. All pending applications also stand disposed of. SANJEEV PRAKASH SHARMA) JUDGE (SANJAY VASHISTH) JUDGE Yes/No Yes/No not sustainable in law. The order passed by the ITAT, therefore, does not warrant any interference. No substantial ppeals. MOHIT GOYAL 2024.12.17 17:55 I attest to the accuracy and integrity of this document "