Patna High Court
Commissioner Of Income Tax vs Smt.Rita Keshri on 26 April, 2011
Author: S.K. Katriar
Bench: Sudhir Kumar Katriar, Samarendra Pratap Singh
Misc. Appeal No.376 OF 2009
WITH
Misc. Appeal No.377 OF 2009
WITH
Misc. Appeal No.378 OF 2009
WITH
Misc. Appeal No.384 OF 2009
*****
Against the common order dated 4.2.2009, passed by the learned
Income Tax Appellate Tribunal, Patna Bench, Patna in I.T.A.
Nos.444 & 445 (Pat)/2007 and I.T.A. Nos.443 & 446(Pat.)/2007.
******
In Misc. Appeal No.376 of 2009:
COMMISSIONER OF INCOME TAX, Central Circle, Patna
.... ...Appellant
Versus
SMT. RITA KESHRI, W/o Satish Kumar Keshri, Hira Panna
Jewellers, r/o Hira Place, Dak Bungalow Road, Patna.
.... ....Respondents
In Misc. Appeal No.377 of 2009
COMMISSIONER OF INCOME TAX, Central Circle, Patna.
.... .... Appellant
Versus
SHRI SHEKHAR KESHRI, S/o Satish Kumar Keshri, Hira Panna
Jewellers, r/o Hira Place, Dak Bungalow Road, Patna.
.... ....Respondents
In Misc. Appeal No.378 of 2009
COMMISSIONER OF INCOME TAX, Central Circle, Patna.
.... ....Appellant
Versus
SMT. RITA KESHRI, W/o Satish Kumar Keshri, Hira Panna
Jewellers, r/o Hira Place, Dak Bungalow Road, Patna.
.... ....Respondents
In Misc. Appeal No.384 of 2009
COMMISSIONER OF INCOME TAX, Central Circle, Patna.
.... ....Appellant
Versus
SHEKHAR KESHRI, S/o Satish Kumar Keshri, Hira Panna
Jewellers, r/o Hira Place, Dak Bungalow Road, Patna.
.... ...Respondents
*******
For the Appellant: Mr. Mr. Harshwardhan Prasad with
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Mrs. Archana Sinha, Advocates.
For the Respondents: Mr. A.K. Rastogi, Advocate.
*******
PRESENT
THE HON'BLE MR. JUSTICE SUDHIR KUMAR KATRIAR
THE HON'BLE MR. JUSTICE SAMARENDRA PRATAP SINGH
*******
S.K. Katriar, J. The department of Income Tax has preferred these
appeals under section 260A of the Income Tax Act 1961 (hereinafter
referred to as „the Act‟), and are directed against a common
judgment dated 4.2.2009, passed by the learned Income Tax
Appellate Tribunal, Patna Bench, Patna, whereby the following four
appeals have been allowed, and the orders of remand passed by the
learned Commissioner of Income Tax (Central), Patna, in purported
exercise of powers under section 263 of the Act, has been set aside.
(i) I.T.A. Nos.444 & 445(Pat.)/2007 (Smt. Rita Keshari
Vs. The CIT (Central), Patna, with respect to
assessment years 2003-04 & 2004-05:
(ii) I.T.A. Nos.443 & 446 (Pat.)/2007 (Sri Shekhar
Keshri vs. The CIT (Central), Patna, with respect to
assessment years 1999-2000 & 2003-04.
2. The following substantial questions of law arise for
consideration:
(i) Whether the Hon‟ble Tribunal is correct in holding
that all inquires were made and all bank accounts
were verified by the assessing officer.
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(ii) Whether the Hon‟ble Income Tax Appellate
Tribunal is correct in observing that all inquires
were carried out and all verification were made
with respect to investment in shop no.203 & 204 of
Sumati Palace.
(iii) Whether the Hon‟ble Income Tax Appellate
Tribunal is correct in ignoring the decision of
Supreme Court in CIT vs. Shree Manjunatheshwar
Packing Product & Camper Works reported in
(1998) 231 ITR 53, where it was observed that if
the assessment is completed before the receipt of
valuation report the assessment is erroneous and
the CIT could revise the assessment order on the
basis of the valuation report received subsequently.
3. A brief statement of facts essential for the disposal
of the four appeals may be indicated. Satish Kumar Keshri is the
proprietor of the group. His wife is Rita Keshri, and their sons are
Shekhar Keshri and Sharad Keshri who have interest in different
business which are subject-matter of assessment proceedings for the
period in question. Separate orders of assessment dated 29.12.2006,
for the assessment years 2003-04 and 2004-05 were passed. The
same had given rise to revision applications in Suo Motu exercise of
powers by the learned Commissioner under section 263 of the Act,
who disposed of the same by his judgment dated 6.6.2007, with
respect to Smt. Rita Keshri for the assessment years 2003-04 and
2004-05, and by his judgment dated 15.6.2007, with respect to
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Shekhar Keshri for the periods 1999-2000 and 2003-04. The learned
Commissioner took the view that the learned assessing officer had
not taken into account certain vital aspects of the matter which were
prejudicial to the interest of the Revenue and, therefore, set aside the
orders of the learned assessing officer, and remitted the matter for a
fresh consideration and orders of assessment in accordance with law
and the observations in the order of the learned Commissioner. The
assessees challenged the same by preferring appeals before the
learned Tribunal which have been numbered as I.T.A. Nos.444 &
445(Pat.)/2007 (Smt. Rita Keshari vs. The C.I.T. (Central), Patna),
and I.T.A. Nos. 443 & 446 (Pat.)/2007 (Sri Shekhar Keshri vs. The
C.I.T. (Central), Patna, with respect to the aforesaid four periods
which have been allowed by a common judgment dated 4.2.2009,
the orders of the learned Commissioner have been set aside, those of
the learned assessing officer have been restored, and impugned
herein.
4. The four appeals have arisen as follows:
In M.A. Nos.376 & 378 of 2009 (CIT Vs. Rita Keshri)
Assessment Order 29.12.2006 For A/Y 2004-05 with In M.A.No.376/09
(Ann.1) respect to Rita Keshri . (CIT Vs. Rita Keshri)
Assessment Order 29.12.2006 For Y/Y 2003-04 with In MA No.378/09
(Ann.1) respect to Rita Keshri (CIT Vs.Rita Keshri)
Common 6.6.2007 For A/Y 2004-05 & In M.A. No.376 & 378
Revisional Order A/Y 2003-04 of 2009 (CIT Vs.Rita
u/s 263 Keshri)
(Ann.2 in both
appeals)
Common Appellate 4.2.2009 in For A/Y 2004-05 & In MA Nos.376 & 378
Order ITA Nos.444 A/Y 2003-04 of 2009 (CIT.Vs.Rita
& 445(Pat.)/07 Keshri)
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In M.A. Nos.377 & 384 of 2009 (CIT vs. Shekhar Keshri)
Assessment Order 29.12.2006 For A/Y 1999-2000 In M.A.No.377/09
(Ann.1) with respect to (CIT Vs.Shekhar
Shekhar Keshri Keshri)
Assessment Order 29.12.2006 For A/Y 2003-04 with In MA No.384/09
(Ann.1) respect to Shekhar (CIT v. Shekhar
Keshri Keshri)
Common Rev. 15.6.2007 For A/Y 1999-2000 & In M.A. No.377 & 384
Order u/s 263 A/Y 2003-04 of 2009
(Ann.2 in both (CIT v. Shekhar
appeals) Keshri)
Common Appellate 4.2.2009 in For A/Y 1999-2000 & In MA Nos.377 & 384
Order ITA Nos.443 A/Y 2003-04 of 2009
& 446(Pat.)/07 (CIT v. Shekhar
Keshri)
Note-1: In all the four appeals separate orders of assessment, all dated 29.12.2006 have
been passed. The periods with respect to Rita Keshri for the A/Y 2004-05 &
2003-04 are in question, and with respect to Shekhar Keshri for the A/Y 1999-
2000 & 2003-04 are in question.
Note-2: Common revisional orders both dated 6.6.2007 have been passed with respect
to Smt. Rita Keshri for the assessment years 2004-05 and 2003-04.
Note-2.1: Common revisional orders both dated 15.6.2007 have been passed with
respect to Shekhar Keshri for the Assessment Years 1999-2000 & 2003-04.
Note 3: Common Appellate order has been passed with respect to the four periods.
The periods with respect to Rita Keshri are for the Assessment Years 2004-05
& 2003-04 (ITA Nos.444 & 445(Pat.)/2007), and with respect to Shekhar
Keshri for the Assessment years 1999-2000 & 2003-04 (in ITA Nos. 443 &
446 (Pat.)/2007).
5. While assailing the validity of the impugned
judgment, the learned senior Standing Counsel submits that the
learned Commissioner had detected vital flaws in the orders of
assessment which have been clearly indicated in the revisional
order, and have rightly been remitted to the learned assessing
officer. In his submission, the learned Tribunal has erred in
interfering with an order of remand.
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6. Learned counsel for the respondents has advanced
elaborate submission in support of the impugned judgment. He
submits that the issues are concluded by findings of facts arrived at
by the learned Tribunal. The present appeals do not give rise to any
substantial question of law. He relies on the following judgments:
(i) Judgment dated 30.3.2011, passed by the present
Bench in Misc. Appeal No.657 of 2010 (Deputy
Commissioner of Income Tax vs. Sulabh International
Social Service Organisation).
(ii) Division Bench judgment of this Court in
Commissioner of Income Tax, Patna vs. Mr.
Mukul Kumar [2009 (4) P.L.J.R. 417: 2009 (2)
B.B.C.J. 132], paragraph 10.
7. We have perused the materials on record and
considered the submissions of the learned counsel for the parties.
The three items in the returns of the two assessees are in question,
and have been discussed in detail in the orders of the authorities
under the Act. Those are with respect to different bank accounts,
their investment in shop nos.203 and 204, and their investment in
the A.C. market. It appears that there was a search and seizure in the
business premises of the assessees on 15.12.2004, and in January
2005. Large mass of incriminating materials were seized and were
taken into account by the learned assessing officer. It is manifest
from a perusal of the assessment orders that the two assessees
assumed an abnormally defiant approach, and refused to disclose
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informations called for by the learned assessing officer in spite of
repeated notices and calls. It is evident on a perusal of the four
assessment orders that the learned assessing officer felt exasperated
and helpless in the matter and passed orders of assessment under
severe constraints. The orders of assessment create a clear
impression in our minds that the assessees are extremely dishonest
persons who have no respect for the laws of the land, the established
procedure, and the authorities charged with the duties under the Act.
8. Section 263 of the Act is headed "Revision of orders
prejudicial to revenue", and confers suo-motu powers of revision on
the learned Commissioner of Income Tax to take steps for
annulment, modification, cancellation etc. of an order of assessment
under the circumstances indicated therein. The four orders of
assessment in question attracted the attention of the learned
Commissioner who rightly invoked the power under section 263 of
the Act and, in his elaborate discussion in his two revisional orders
dealing with the two assessees for the four periods in question,
noticed vital flaws in the orders of assessment entirely attributable
to the extremely dishonest and defiant approach of the assessees.
The learned Commissioner in his elaborate, lucid, and eloquent
order has pointed out vital flaws in the orders of assessment, and has
observed that the vital materials could not be taken into account
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because of the assessees‟ refusal to cooperate. We entirely agree
with the discussion in the order of the learned Commissioner.
9. We feel extremely unhappy with the mode and manner in
which the learned Tribunal has dealt with the order and has, by a
very perfunctory approach, set aside the orders of the learned
Commissioner. It has taken into account the materials which were
noticed by the learned assessing officer, but has refused to take into
account the vital materials or aspects of the matter pointed out by
the learned Commissioner which were not considered by the learned
assessing officer. In other words, the learned Tribunal has failed to
attach due importance to the vital omissions indicated by the learned
Commissioner. In such a situation, the two judgments relied on by
the learned counsel for the assessees are inapplicable to the facts
and circumstances of the present case. The issues are indeed not
concluded by findings of facts.
10. There is yet another aspect of the matter. The
superior court or quasi-judicial authority should normally act with
restraint while setting aside the impugned order with a view to remit
the matter to the same authority or the court, because such an order
of remand sets at naught the entire effort made till then to resolve
the dispute. The function of the appellate court is to rectify the
errors and the mistakes committed in the impugned order. An order
of remand can be passed under limited circumstances so that no
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injustice is done to any side. It is equally well settled that the
superior court or quasi-judicial authority do not normally interfere
with an order of remand where the parties will have adequate &
reasonable opportunity to present their cases. In the present case, the
learned Commissioner remitted the matter for valid reasons
discussed in detail in his orders, and the learned Tribunal erred in
interfering with the same for unconvincing reasons and perfunctory
approach. In the present situation, the learned Commissioner could
not have rectified the errors in the orders of the learned assessing
officer because entire materials were not on record due to the
uncooperative approach of the assessees. As indicated above, the
learned Commissioner had pointed out vital omissions in the
assessment orders which could be taken care of only after receiving
full factual material on record, and has rightly set aside the orders of
assessment which are to the prejudice of the Revenue, and with
which we entirely agree.
11. As indicated hereinabove, the learned assessing
officer has made detailed reference to the defiant and extremely
uncooperative attitude adopted by the assessees, which speaks of a
very dishonest approach. It is impossible for this Court to
countenance such an approach which is inspired by complete lack of
respect for the established laws of the land, and the prescribed
procedure. In that view of the matter, the Director General of
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Investigation, Bihar, and/or the Chief Commissioner of Income Tax,
Bihar, Patna, would be well advised to keep the entire group under
constant surveillance so that the Revenue does not suffer, and the
courts are not burdened with unwanted matters.
12. In the result, we set aside the judgment dated
4.2.2009, passed by the learned Income Tax Appellate Tribunal, Patna Bench, Patna, in I.T.A. Nos.444 & 445 (Pat.)/2007, and ITA Nos.443 & 446 (Pat.)/2007, and restore the orders of the learned Commissioner of Income Tax. The substantial questions of law are answered in favour of the Revenue, and against the assessees. These are fairly old matters. The learned assessing officer will be well advised to dispose of the same expeditiously. In the circumstances of the case, there shall be no order as to costs.
(S.K. Katriar, J.) S.P. Singh, J. I agree.
(S.P. Singh, J.) Patna High Court, Patna.
Dated the 26th day of April, 2011.
S.K.Pathak/ (AFR)