Gauhati High Court
Cmj Breweries Private Limited vs The Union Of India And 3 Ors on 19 August, 2021
Author: Achintya Malla Bujor Barua
Bench: Achintya Malla Bujor Barua
Page No.# 1/5
GAHC010123592021
THE GAUHATI HIGH COURT
(HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH)
Case No. : WP(C)/3986/2021
CMJ BREWERIES PRIVATE LIMITED
A COMPANY INCORPORATED UNDER THE PROVISIONS OF THE
COMPANIES ACT, 1956, HAVING ITS REGD. OFFICE AT 1, BLOCK III CMJ
HOUSE, FERNDALE COMPLEX, KEATING ROAD, SHILLONG- 793001,
MEGHALAYA AND REP. BY SHRI BINIT SINGHANIA, THE AUTHORISED
SIGNATORY OF THE PETITITIONER COMPANY
VERSUS
THE UNION OF INDIA AND 3 ORS
THROUGH THE SECRETARY, MINISTRY OF FINANCE, NORTH BLOCK, NEW
DELHI- 110001
2:PRINCIPAL COMMISSIONER OF INCOME TAX
GHY-1
AAYAKAR BHAWAN
G.S.ROAD
GHY-05
ASSAM
3:JCIT
RANGE-1
GHY
AAYAKAR BHAWAN
G.S.ROAD
GHY-05
ASSAM
4:ACIT
CIRCLE-1
GHY
AAYAKAR BHAWAN
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G.S.ROAD
GHY-05
ASSA
Advocate for the Petitioner : DR. A SARAF
Advocate for the Respondent : SC, INCOME TAX
BEFORE
HONOURABLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA
ORDER
19.08.2021 Heard Dr. A Saraf, learned senior counsel for the petitioner. Also heard Mr. S Sarma, learned standing counsel for the Income Tax Department.
2. An order under Section 263 of the Income Tax Act 1961 (for short, the IT Act) dated 31.03.2021 is assailed in this writ petition on the ground that the condition precedent of initiating a proceeding under Section 263 of the IT Act is absent in the present case and, therefore, the order impugned would be an order without jurisdiction.
3. Dr. Saraf, learned senior counsel for the petitioner by referring to the provisions of Section 263 of the IT Act has raised the contention that in order to invoke the power under Section 263 of the IT Act, the Principal Commissioner or the Commissioner may call up and examine the records of any proceeding under the IT Act and if he considers that any order passed therein by the Assessing Officer is erroneous and prejudicial to the interest of revenue, he may after Page No.# 3/5 giving the assessee an opportunity of being heard and after making or causing to be made such inquiry to be deemed necessary, pass order(s) thereon.
4. According to Dr. A Saraf, learned senior counsel a basic reading of the provisions of Section 263(1) of the IT Act goes to show that in order to invoke the jurisdiction under Section 263 of the IT Act, the condition precedent is that the Principal Commissioner or the Commissioner may arrive at a satisfaction that any order passed by the Assessing Officer to be erroneous and to be prejudicial to the interest of revenue.
5. Dr. Saraf, learned senior counsel in support of his contention also refers to the propositions laid down by the Supreme Court in paragraph 10 of Commissioner of Income Tax, Mumbai, Vs. Amitabh Bachchan , reported in (2016) 11 SCC 748 wherein it has been held that the satisfaction that an order passed by the authority under the IT Act is erroneous and to be prejudicial to the interest of revenue is the basic pre-condition for exercise of jurisdiction under Section 263 of the IT Act.
6. It is, further, provided that both the pre-conditions would have to be conjointly present. In other words, the two conditions of the order being erroneous and prejudicial to the interest of revenue have to be present at the stage when the Principal Commissioner or the Commissioner initiates the exercise of the jurisdiction under Section 263 of the IT Act. By referring to the order impugned dated 31.03.2021 passed by the Principal Commissioner Income Tax Guwahati-1 in clause 4.0, it is submitted that the Principal Page No.# 4/5 Commissioner of Income Tax while arriving at his conclusion on examination of the matter could not confirm accurately whether the assessee had not claimed the deduction in the earlier assessment orders and, accordingly, although the explanation of the assessee may be plausible, in the opinion of the Principal Commissioner it would be better if the matter was examined in depth. The very reading of the clause 4.0 of the order dated 31.03.2021 would go to show that the Principal Commissioner, Income Tax is yet to arrive at his prima facie conclusion that the order of the Assessing Officer was erroneous and in order to arrive at a satisfaction whether it was erroneous, the Principal Commissioner requires the matter to be examined further in depth. From such point of view, it is submitted by Dr. Saraf that the pre-condition to be present for invoking the Section 263 of the IT Act is absent in this case inasmuch as there is no prima facie satisfaction by the Principal Commissioner on the basis of the materials available as to whether the order of the Assessing Officer which is sought to be reviewed under Section 263 of the IT Act was an erroneous order.
7. Mr. S Sarma, learned counsel for the Income Tax Department prays for an adjournment to examine the matter.
8. Prayer is allowed.
9. List again on 26.08.2021. Till then, no action be taken against the petitioner pursuant to the proceeding initiated under Section 263 of the IT Act.
JUDGE Page No.# 5/5 Comparing Assistant