M/S SUBHASH PROJECT AND MARKETING LTD. V. THE COMMISSIONER OF INCOME TAX

STRE/244/2011

AI Insights

The case involves M/S Subhash Project And Marketing Ltd., the revisionist, contesting an order by the Commercial Tax Tribunal, Agra, which had confirmed a reassessment order under Section 21 of the U.P. Trade Tax Act, 1948 for the Assessment Year 2001-2002. The reassessment was initially based on an order under Section 7D of the Act. The revisionist argued that the reassessment was incorrect, referencing a favorable compounding decision from the previous year and a relevant legal precedent. The court examined whether the reassessment was justified given the circumstances and the legal framework provided by the Act.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 753754 (HC-ALLAHABAD)
• Appeal Type: Others
• Pronouncement Date: 22-07-2022
• Assessment Year: misc
• Other Referred Cases: M/s Kothari Contract Interiors, New Delhi Vs. Trade Tax Office, Modinagar Ghaziabad, 2006 UPTC 74
• Laws Referred To: U.P. Trade Tax Act, 1948
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: C S C
• Assessee Lawyers: RAKESH AGRAWAL; SUYASH AGARWAL
• Keywords: Assessment year 2001-2002; Commercial Tax Tribunal; Compounding; Reassessment; Trade Tax
• Section: 21; 7D

Judgement Text

"Court No. - 38 Case :- SALES/TRADE TAX REVISION No. - 244 of 2011 Revisionist :- M/S Subhash Project And Marketing Ltd. Opposite Party :- The Commissioner Of Income Tax Counsel for Revisionist :- Rakesh Ranjan Agrawal,Suyash Agarwal Counsel for Opposite Party :- C.S.C. Hon'ble Saumitra Dayal Singh,J. Typed copy of the orders filed today is taken on record. Heard Sri Rakesh Ranjan Agarwal learned Senior Counsel assisted by Sri Suyash Agarwal learned counsel for the assessee-revisionist and learned Standing Counsel for the State respondent. Present revision has been filed by the assessee against the order of the Commercial Tax Tribunal, Agra (hereinafter referred to as 'the Tribunal') dated 25.11.2010 passed in Second Appeal No. 127 of 2006 for Assessment Year 2001-2002 (U.P.). By that order the Tribunal has allowed the appeal filed by the revenue and confirmed the reassessment order passed under Section 21 of the U.P. Trade Tax Act, 1948 (hereinafter referred to as 'the Act'). Present revision has been pressed on the following question of law:- \" Whether the facts and circumstances of the case, the Tribunal was correct to sustain the reassessment proceeding under Section 21 of the Act for A.Y. 2001-02 arising out of the order passed under Section 7D of the Act in view of the decision of M/s Kothari Contract Interiors, New Delhi Vs. Trade Tax Office, Modinagar Ghaziabad, 2006 UPTC 74 ?\" Having heard learned counsel for parties and having perused the record, there is no denial to the fact that for the Assessment Year 2000-2001, the petitioner has been admitted to the benefit of compounding consequent to the appeal order passed in its favour. The contract with respect to which its compounding had been granted, continued in the next year i.e. Assessment Year 2001-02. No other work was done. It was in such facts that the compounding was originally allowed in favour of the petitioner vide order dated 09.1.2004. There is no allegation made against the assessee that it had not truly or correctly disclosed the nature of the contract executed by it or that there was any material concealment, fraud etc as may have led to the conclusion that the contractual liability arising under the compounding scheme could be disregarded and the assessee subjected to reassessment under Section 21 of the Act. Unless there was credible material to hold that contractual liability (of compounding) to be fraudulently determined, in view of the division bench decision of this Court in M/s Kothari Contract Interiors, New Delhi Vs. Trade Tax Office, Modinagar Ghaziabad, 2006 UPTC 74 the power of reassessment under Section 21 would remain unavailable to the revenue authorities. That being the position in law laid down by the division bench, no contrary view may arise in the facts of the present case. Accordingly, the revision is allowed. The question is answer in the negative i.e. in favour of the assessee and against the revenue. Order Date :- 22.7.2022 Faraz Digitally signed by FARAZ AHMAD Date: 2022.07.22 16:41:35 IST Reason: Location: High Court of Judicature at Allahabad "