Gujarat High Court
Principal Commissioner Of Income Tax vs A. Menarini India Pvt ... on 16 February, 2017
Author: M.R. Shah
Bench: M.R. Shah, B.N. Karia
O/TAXAP/102/2017 JUDGMENT
IN THE HIGH COURT OF GUJARAT AT AHMEDABAD
TAX APPEAL NO. 102 of 2017
FOR APPROVAL AND SIGNATURE:
HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
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1 Whether Reporters of Local Papers may be
allowed to see the judgment ?
2 To be referred to the Reporter or not ?
3 Whether their Lordships wish to see the fair
copy of the judgment ?
4 Whether this case involves a substantial
question of law as to the interpretation of the
Constitution of India or any order made
thereunder ?
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PRINCIPAL COMMISSIONER OF INCOME TAX-1....Appellant(s)
Versus
A. MENARINI INDIA PVT LTD....Opponent(s)
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Appearance:
MR MANISH R BHATT, SENIOR ADVOCATE with MRS MAUNA M
BHATT, ADVOCATE for the Appellant(s) No. 1
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CORAM: HONOURABLE MR.JUSTICE M.R. SHAH
and
HONOURABLE MR.JUSTICE B.N. KARIA
Date : 16/02/2017
ORAL JUDGMENT
(PER : HONOURABLE MR.JUSTICE M.R. SHAH) Page 1 of 6 HC-NIC Page 1 of 6 Created On Sun Aug 13 16:36:25 IST 2017 O/TAXAP/102/2017 JUDGMENT [1.0] Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned Income Tax Appellate Tribunal "B" Bench, Ahmedabad (hereinafter referred to as "the learned tribunal") dated 31/08/2016 in ITA No.1461/Ahd/2015 by which the learned tribunal has allowed the said Appeal preferred by the assessee and has quashed and set aside the order passed by the revisional authority (CIT) cancelling the order dated 28/03/2013 passed under Section 143(3) of the Income Tax Act (hereinafter referred to as "the Act"), revenue has preferred the present Tax Appeal with the following proposed question of law;
"Whether the Appellate Tribunal is right in law and on facts in cancelling the order passed by CIT under Section 263 of the Act even though it has clearly been brought out that the order of the Assessing Officer is erroneous and prejudicial to the interest of revenue in as much as the receipts corresponding to TDS were not fully disclosed by the assessee in the return of income?"
[2.0] The facts leading to the present Appeal in a nutshell are as under;
[2.1] The Assessing Officer while framing the scrutiny assessment under Section 143(3) of the Act determined the income of assessee at Rs.10,68,65,351/- as against the returned of income of Rs.7,66,12,650/-. It appears that thereafter the revisional authority (CIT) noticed that as per the computation of income, assessee has claimed TDS of Page 2 of 6 HC-NIC Page 2 of 6 Created On Sun Aug 13 16:36:25 IST 2017 O/TAXAP/102/2017 JUDGMENT Rs.3,16,99,286/- as against the professional income of Rs.29,19,49,163/- shown in the Profit & Loss Account and on the basis of the TDS Certificate the gross income should have been Rs.3,16,99,286/-, and therefore, the assessee has shown less income to the extent of Rs.2,50,43,697/-. The order of assessment came to be revised in exercise of powers under Section 263 of the Act. It was also noticed by the revisional authority (CIT) that the assessee had failed to pay interest of Rs.6,59,919/- under Section 220(2) of the Act, and therefore, on the aforesaid two grounds learned CIT took the order of assessment under revision in exercise of powers under Section 263 of the Act. The learned CIT in exercise of revisional powers under Section 263 of the Act set aside the assessment order passed under Section 143(3) dated 28/03/2013 by holding that the same was erroneous and prejudicial to the interest of the revenue. Consequently, learned CIT directed to make fresh assessment for the Assessment year 2010-11.
Feeling aggrieved and dissatisfied with the order passed by the learned CIT dated 31/03/2015 quashing and setting aside the assessment order passed under Section 143(3) of the Act dated 28/03/2013 for the Assessment year 2010-11, the assessee preferred Appeal before the learned tribunal, being ITA No.1461/Ahd/2015 and by the impugned judgment and order the learned tribunal has allowed the said Appeal and has quashed and set aside the order passed by the learned CIT following the decision of the Hon'ble Supreme Court in the case of Commissioner of Income Tax Vs. Max India Ltd. reported in 295 ITR 282 (SC).
Feeling aggrieved and dissatisfied with the impugned judgment and order passed by the learned tribunal, revenue has preferred the present Appeal with the aforesaid Page 3 of 6 HC-NIC Page 3 of 6 Created On Sun Aug 13 16:36:25 IST 2017 O/TAXAP/102/2017 JUDGMENT proposed question of law.
[3.0] Shri M.R. Bhatt, learned Counsel appearing on behalf of the revenue has vehemently submitted that the observations made by the learned tribunal in paragraph 4.4 that once the Assessing Officer raised the query and no adjustment to the sales was made by the Assessing Officer, meaning thereby the Assessing Officer was satisfied with the reply of the assessee and the issue of not offering the sales income to tax on which learned CIT has resorted to revisionary proceedings under Section 263 of the Act had been examined by the Assessing Officer, the learned CIT was not justified in resorting to revisionary proceedings and the same cannot be sustained. It is submitted that if it is found that the view taken by the Assessing Officer has resulted into prejudice to the revenue and /or interest of the revenue, powers under Section 263 of the Act can be resorted to by the revisional authority. It is submitted that therefore on the aforesaid ground, the learned tribunal is not justified in interfering with the order passed by the learned CIT under Section 263 of the Act. It is submitted that in the facts and circumstances of the case, the learned tribunal is not justified in interfering with the order passed by the learned CIT, which was a well reasoned order.
[4.0] Heard the learned Counsel appearing on behalf of the revenue at length. We have perused the original assessment order as well as the order passed by the learned CIT passed under Section 263 of the Act as well as the impugned judgment and order passed by the learned tribunal.
[5.0] Having heard Shri M.R. Bhatt, learned Counsel
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appearing on behalf of the revenue and the ground on which the revisional authority resorted to the revisionary proceedings, we are of the opinion that on merits the learned tribunal is justified in interfering with the order passed by the learned CIT. The issue with respect to the claim of TDS made by the assessee was as such debatable and the view taken by the Assessing Officer can be said to be plausible view. Under the circumstances, considering the decision of the Hon'ble Supreme Court in the case of Max India Ltd.(Supra), the learned tribunal is justified in quashing and setting the order passed by the learned CIT. Even the second issue namely charging of interest under Section 220(2) of the Act is concerned, as observed by the learned tribunal, there was nothing on record to demonstrate that at the time of passing the order there was any tax that was payable by the assessee pursuant to the notice under Section 156 of the Act and there was failure on the part of the assessee to pay the tax. Under the circumstances, on the aforesaid ground, the revisional authority was not justified in resorting to the revisionary proceedings. The learned tribunal has rightly interfered with the order passed by the learned CIT. Now so far as the grievance made by the learned Counsel appearing on behalf of the revenue, more particularly, with respect to the observations made by the learned tribunal in paragraph 4.4 is concerned, as on merits, we are satisfied that the learned tribunal is justified in quashing and setting aside the order passed by the learned CIT, while dismissing the present Appeal, we keep the aforesaid question open and we do not conclude the said question in the present proceedings.
[6.0] In view of the above and for the reasons stated
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hereinabove, we see no reason to interfere with the impugned judgment and order passed by the learned tribunal. Hence, the present Appeal deserves to be dismissed and is accordingly dismissed.
(M.R. SHAH, J.) (B.N. KARIA, J.) Siji Page 6 of 6 HC-NIC Page 6 of 6 Created On Sun Aug 13 16:36:25 IST 2017