Ram Ji Dass & Co. Abohar V. The Commissioner of Income Tax, Patiala

ITR/201/1999

AI Insights

The case revolves around the assessment of net profit rates applied by the Assessing Officer to M/s Ram Ji Dass & Co. for the assessment year 1990-91. Initially, the Assessing Officer rejected the books of account and assessed the net profit at 10% of turnover, which was later reduced to 9.25% by the CIT (A) upon appeal. The Department's appeal to the Tribunal was dismissed, but the assessee's cross-objections, which sought a further reduction of the net profit rate to 6.29%, were not considered on merits. The assessee's subsequent request for the Tribunal to recall its order and decide on the cross-objections was also rejected, leading to the present reference to the High Court under Section 256(1) of the Income Tax Act, 1961.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 797007 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 09-11-2009
• Assessment Year: misc
• Other Referred Cases: Hari Shankar Rastogi versus Sham Manohar and others (2005) 3 Supreme Court Cases 761
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: SAVITA SAXENA
• Assessee Lawyers: ANIMESH SHARMA
• Keywords: Assessment Year 1990-91; Cross Objections; Income Tax; Net profit rate
• Section: 256(1)

Judgement Text

"ITR No. 201 of 1999 1 IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH ITR No. 201 of 1999 (O&M) Date of decision: November 9, 2009 M/s Ram Ji Dass & Co. Abohar ...Appellants Versus The Commissioner of Income Tax, Patiala. ...Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE GURDEV SINGH Present: Mr. Animesh Sharma, Advocate, for the assessee. Ms. Savita Saxena, Advocate, for the revenue. ORDER 1. Income Tax Appellate Tribunal, Amritsar, has referred the following question of law for the opinion of this Court under Section 256 (1) of Income Tax Act, 1961 (for short, “the Act”) in compliance of order of this Court dated 2.12.1998 and arising out of the order of the Tribunal in C.O. No. 101 (ASR)/1993 in ITA No. 801 (ASR)/1993) dated 31.8.1999 for the assessment year 1990-91:- “(i) Whether on the facts and in the circumstances of the case, the Tribunal was right in law in dismissing the cross- objections filed by the assessee on the ground that while deciding the revenue's appeal the Tribunal had already considered the question relating to the rate of profits and had upheld the same and it could not be re-examined there after in ITR No. 201 of 1999 2 assessee's cross objections”. 2. The Assessing Officer rejected the books of account and assessed net profit @ 10% of the turn over. On appeal, net profit rate was reduced to 9.25%. The Department filed appeal before the Tribunal and the assessee filed cross-objections. The appeal of the Department was dismissed but cross-objections of the assessee were not considered on merits, while dismissing the appeal of the Department. The assessee applied for recalling of the order and for decision of cross-objections on merits. This prayer was rejected with the following observations:- “15.3 It is observed that the Tribunal vide its order dated 18.4.1995 have already dismissed the appeal of the Revenue whereby they had agitated the relief given by the learned CIT (A). In the process, the Tribunal upheld the net profit rate of 9.25% as applied by the learned CIT (A). Since appeal in I.T.A. No. 801 (ASR)/93 filed by the Department has not been recalled, the earlier order of the Tribunal stands in this behalf accordingly, we see no reason to interfere with the orders of the learned CIT (A) as already upheld by the Tribunal.” 3. We have heard learned counsel for the parties. 4. Learned counsel for the assessee submits that while deciding the appeal of the Department, the Tribunal only considered whether reduction of the net profit rate from 10% to 9.25% was justified or not and not the question whether said rate should be further reduced to 6.29%, as sought by the assessee. Reliance has been placed on Hari Shankar Rastogi versus Sham Manohar and others (2005) 3 Supreme Court Cases 761, about the scope of cross objections. ITR No. 201 of 1999 3 5. From perusal of the impugned order, it is clear that the view point of the assessee put forward by way of cross-objections was not considered on merits. Accordingly, question referred has to be answered in favour of the assessee and against the Department. The cross-objections of the assessee are, thus, required to be heard and decided on merits. 6. Reference is disposed of. (ADARSH KUMAR GOEL) JUDGE November 9, 2009 (GURDEV SINGH ) prem JUDGE "