AJAY GOEL V. COMMISSIONER OF INCOME TAX

ITA/12/2019

AI Insights

The case involves an appeal by Shri Ajay Goel against the Commissioner of Income Tax concerning the applicability of Section 50C of the Income Tax Act, 1961, to the sale of assets that are part of stock in trade. The Income Tax Appellate Tribunal had remanded the matter back to the Assessing Officer to verify the status of the asset in question, which the appellant contested. The High Court of Himachal Pradesh, led by Chief Justice V. Ramasubramanian and Justice Anoop Chitkara, decided to remand the matter back to the Tribunal specifically to address the factual dispute regarding the timing of the assessment order's issuance, which was crucial to determining if it was within the statutory limitation period.

• Counselvise Citation: [2019] 140 COUNSELVISE.COM (IT) 672505 (HC-HIMACHAL_PRADESH)
• Appeal Type: Others
• Pronouncement Date: 11-07-2019
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: VINAY KUTHIALA; DIWAN NEGI
• Assessee Lawyers: AJAY VAIDYA
• Keywords: Assessment Order; Income Tax; Limitation Bar; Remand; Section 50C
• Section: 50C; 260-A

Judgement Text

"IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA ITA No.12 of 2019 Date of decision : 11.07.2019 Shri Ajay Goel … Appellant Versus Commissioner of Income T ax …Respondents Coram: The Hon’ble Mr . Justice V. Ramasubramanian, Chief Justice. The Hon’ble Mr . Justice Anoop Chitkara, Judge. Whether approved for reporting?1 For the Appellant : Mr. Ajay Vaidya, Advocate. For the Respondents : Mr. Vinay Kuthiala, Senior Advocate with Mr. Diwan Singh Negi, Advocate. V. Ramasubramanian, Chief Justice (Oral) The assessee has come up with the above appeal under Section 260-A of the Income T ax Act, 1961 (hereinafter referred to as ‘the Act’), raising the following substantial questions of law:- (i) Whether the failure of the T ribunal to address the issue relating to the bar of limitation, on facts, 1Whether reporters of Local Papers may be allowed to see the judgment? …2… in the light of the findings on other issues, is in accordance with law? (ii) Whether the Tribunal could have remanded the matter back to the Assessing Officer, after having expressed a conclusive opinion that the provisions of Section 50C of the Act are not applicable for the sale of assets, which are part of stock? 2. Heard Mr. Ajay Vaidya, learned counsel for the appellant and Mr. Vinay Kuthiala, learned Senior Counsel, duly assisted by Mr. Diwan Singh Negi, learned counsel, for the respondent-Department. 3. Pursuant to the order dated 5.12.2018, the records have been produced by Shri Lalit Bhati, Inspector, Income T ax Department, Shimla, Himachal Pradesh. 4. Let us first take up the second substantial question of law, as it is capable of easy disposal. In Paragraph 7.5 of its order, the learned Income T ax Appellate T ribunal, has correctly understood the legal position that the provisions of Section 50C of the Act, are not applicable for the sale of assets, which are part of the stock in trade. But, the Tribunal …3… was convinced to remand the matter back to the Assessing Officer, so that he can examine whether the asset in question has been shown or reflected as stock in trade or in closing stock in the regular returns. 5. The objection of the appellant, is not to the answer given by the T ribunal to the question of law, but to the order of remand. A remand on a question of fact, cannot be raised as a substantial question of law, in an appeal before this Court. After all, the appellant is not prejudiced by the order of remand. It is true that the Income T ax Appellate T ribunal, being a final authority, on the question of fact, could have also examined the returns independently, but its failure to examine the returns independently, cannot give rise to a substantial question of law. Therefore, we do not entertain this appeal on the second substantial question of law. 6. Insofar as the first substantial question of law is concerned, the relevant portion of order of the Tribunal is in the penultimate paragraph, namely Paragraph-19. Paragraph- 19 of the impugned order of the Tribunal reads as under:- …4… “In the revised grounds submitted, in Ground No.2 the assessee has challenged that the upholding of Ld. DCIT’s order dated 23.03/2013 which seems to have been passed after 31/03/2013. Since the quantum additions have been adjudicated on facts of the case and on merits, and since the assessee has got substantial relief, any adjudication on this issue becomes academic in nature and hence not being dealt with. 7. According to the petitioner, the order of assessment, though bears the date 28.3.2013, was actually passed after 31.3.2013, in order to show as though it was passed within the period of limitation. According to the learned counsel for the petitioner, he has information received under the Right to Information Act, which would show that the order was predated, but was actually passed beyond 31.3.2013, which was the last date for passing the order of assessment. 8. It is true that the Commissioner of Income T ax (Appeals), has recorded a categorical finding that the order was in fact passed on 28.3.2013. But, the question whether …5… the order was passed actually on 28.3.2013 or whether it was predated, is a question of fact, which the Income T ax Appellate Tribunal, being the final authority on fact, should have gone into. Since the T ribunal did not go into this question, we are of the view that this question has to be answered in favour of the appellant and the matter remanded back to the Appellate Tribunal. 9. Accordingly, the first substantial question of law, is answered in favour of the appellant, holding that the Appellate Tribunal, ought to have considered this question in the light of the disputed facts. Accordingly, the appeal is allowed and the matter remanded back to the Income T ax Appellate Tribunal for examination of only this aspect. Pending application(s), if any, also stand disposed of. (V. Ramasubramanian) Chief Justice (Anoop Chitkara), Judge July 11, 2019 (KS) "