Madhya Pradesh High Court
Pr Commissioner Of Income Tax I vs Keti Construction Ltd. on 24 April, 2024
Author: Sushrut Arvind Dharmadhikari
Bench: Sushrut Arvind Dharmadhikari
1
ITA No. 184 of 2023
&
ITA No. 186 of 2023
IN THE HIGH COURT OF MADHYA
PRADESH
AT INDORE
BEFORE
HON'BLE SHRI JUSTICE SUSHRUT ARVIND
DHARMADHIKARI
&
HON'BLE SHRI JUSTICE GAJENDRA SINGH
ON THE 24th OF APRIL, 2024
INCOME TAX APPEAL No. 184 of 2023
BETWEEN:-
PR COMMISSIONER OF INCOME TAX I AAYKAR BHAWAN WHITE
CHURCH ROAD INDORE (MADHYA PRADESH)
.....APPELLANT
(MS VEENA MANDLIK, LEARNED COUNSEL FOR THE APPELLANT)
AND
KETI CONSTRUCTION LTD. 31/6 VATSALYA CHAMBERS SAPNA
SANGITA ROAD INDORE PAN AAACK6893Q (MADHYA PRADESH)
.....RESPONDENT
(NONE PRESENT FOR THE RESPONDENT).
and
INCOME TAX APPEAL No. 186 of 2023
BETWEEN:-
PR COMMISSIONER OF INCOME TAX (CENTRAL) AAYKAR
BHAWAN WHITE CHURCH ROAD INDORE (MADHYA PRADESH)
.....APPELLANT
(MS VEENA MANDLIK, LEARNED COUNSEL FOR THE APPELLANT)
AND
KETI CONSTRUCTION LTD. 31/6 VATSALYA CHAMBERS SAPNA
SANGITA ROAD INDORE PAN AAACK6893Q (MADHYA PRADESH)
2
ITA No. 184 of 2023
&
ITA No. 186 of 2023
.....RESPONDENT
(NONE PRESENT FOR THE RESPONDENT)
------------------------------------------------------------------------------------
This appeal coming on for admission this day, Justice Sushrut
Arvind Dharmadhikari passed the following:
ORDER
Heard on the question of admission.
Regard being had to the similitude of the controversy involved in the aforesaid appeals, both have been heard analogously and disposed of by this singular order. This order shall govern disposal of ITA No. 184/2023 and ITA No. 186/2023.
For the sake of convenience, facts of ITA No.184/2023 are taken.
2. This appeal u/S 260A of the Income Tax Act, 1961(referred to as 'the Act' hereinafter) being aggrieved by the order dated 25.05.2023 passed by the Income Tax Appellate Tribunal(ITAT), Indore Bench in IT(SS)A No. 1/Ind/2023 for the assessment year 2011-12(Assessee Appeal).
3. The following substantial questions of law have been proposed in the instant appeal:
"1. Whether on the facts and in the circumstances of the case , the ITAT was justified in law in allowing the appeal of the assessee by restoring it back to the Ld. CIT(A)?
2. Whether on the facts and in the circumstances of the case, the ITAT was justified in law in allowing the appeal of the assessee by restoring it back to the ld. CIT(A) by holding that the assessee has made full payment of tax on the income declared in the Return of Income ignoring the 3 ITA No. 184 of 2023 & ITA No. 186 of 2023 provisions of Section 249(4)(a) of the Act which clearly specify that no appeal 'shall' be admitted by the CIT(A) unless at the time of filing of the appeal, the assessee has paid the tax due on the income returned by him?
3. Whether on the facts and in the circumstances of the case, the ITAT was justified in law in allowing the appeal of the assessee by restoring it back to the ld. CIT(A), ignoring the fact that the assessee has not made payment of full amount of tax on the income declared in the Return not only by the date of filing of appeal before CIT(A) but also even now huge amount of due tax remains unpaid?
4. Whether on the facts and in the circumstances of the case, the ITAT was justified in law in allowing the appeal of the assessee by restoring it back to the ld. CIT(A), ignoring the decision of Hon'ble Apex COurt in the case of Pawan Kumar Laddha [2010] 190 Taxman 169(SC), wherein the Hon'ble Supreme Court in clear terms has held that precondition of payment of due tax on income returned u/S 249(4)(a) of the Act is a mandatory condition for admitting appeal by CIT(A)?
5. Whether on the facts and in the circumstances of the case, the finding given by ITAT in allowing the appeal of the assessee by restoring it back to the Ld. CIT(A), assuming that entire tax due has been paid by the assessee, suffers from perversity as it failed to allude to relevant facts , misread the evidence and its probative value and the legal position,which itself gives rise to question of law in view of ratio of decision in several cases including in the case of Sudarshan Silk and Sarees 300 ITR 205 (SC)?"4 ITA No. 184 of 2023
& ITA No. 186 of 2023
4. In short, the question that arises for consideration in this appeal is, whether this appeal involves any substantial question of law, as is required to be made out under Section 249(4)(a) of the Act of 1961, that being the prerequisite of admission of the appeal.
5. The brief facts of the case are that the respondent was engaged in the business of construction of toll roads on BOT basis. A search and seizure action u/S 132 of the Act was carried out on the business and residential premises of the respondent on 05.05.2011. During the search and seizure, the respondent/assessee company filed the return of income tax u/S 139(1) of the Act in response to notice u/S 153A of the Act. Disclosure of additional income tax and assessed income covered by the search action is as under:
A.Y. Date of Return Date of Income Additional filing of income(in filing of declared in income return u/S Rs.) return as return u/S offered, if 139(1) per the 153A(in Rs.) any (in Rs.) notice u/S 153A 2006-07 28.11.2006 45,94,000/- 10.09.2013 45,94,000/- - 2007-08 31.10.2007 64,15,910/- 31.05.2012 66,62,640/- 2,46,730/- 2008-09 30.09.2008 58,75,730/- 31.05.2012 1,29,57,730/- 70,82,000/- 2009-10 30.09.2009 9,70,460/- 31.05.2012 7,60,64,720/- 7,50,94,260/- 2010-11 30.09.2010 1,15,98,650/- 31,05.2012 9,28,62,960/- 8,12,64,310/- 2011-12 30.09.2011 20,20,32,280 29.05.2012 20,20,32,280/- NIL /-
6. Accordingly, the scrutiny assessments u/S 153A r/W Sec 144 of the Act was completed on 29.09.2015 determining total income of Rs. 75,79,66,460/- for the assessment year 2009-10 and Rs. 1,30,14,97,830/- for the assessment year 2011-12. During the course of search, the disclosure of additional income of Rs. 35 crores was made by the respondent/assessee.
5 ITA No. 184 of 2023& ITA No. 186 of 2023
7. The Assessing Officer raised a demand of tax and penalty. Being aggrieved, the respondent filed an appeal before the CIT(Appeal). The said appeal was dismissed vide order dated 27.02.2023 in limine being not maintainable on the ground that the respondent had not paid due tax payable on return income upto 15.01.2022. Being aggrieved, the respondents approached the ITAT, Indore where ITAT has passed the following order:
"7. Thus, it is held that non-payment of tax due on return income would amount a defect in appeal and not a void appeal. Following the orders of the coordinate Benches, we are of the considered view that once the assessee made full payment of tax due on return income, the appeals of the assessee ought to have been decided on merits instead of dismissed the same in limine.
8. For A.Y. 2011-12 the Ld CIT(A) has referred in the impugned order the refund of assessment year 2013-14 of Rs. 1,70,33,975/- was determined by the AO vide orde dated 10.01.2023 and sent proposal to CPC to adjust the refund against the demand of year under consideration. However, the said refund was not found to be reflected on the CPC portal. The Ld. A.R. Of the assessee has fairly submitted that the appeal for A.Y. 2011-12 may be considered by CIT(A) after verification of the said refund from the portal of the CPC. Accordingly in the facts and circumstances of the case and in the interest of justice, we set aside the impugned orders of ld. CIT(A) and the appeals for A.Y. 2009-10 and 2011-12 are remanded to the record of the Ld. CIT (A) for adjudication on merits after giving an appropriate opportunity of hearing to the 6 ITA No. 184 of 2023 & ITA No. 186 of 2023 assessee.
9. In the result, appeal of assessee are allowed for statistical purpose.
The ITAT set aside the order of Assessing officer as well as CIT(A) and allowed the appeal filed by the respondent (Assessee).
Being aggrieved, the appellant/revenue is before this Court in the present appeal."
8. Learned counsel for the appellant contended that the learned ITAT has erred in allowing the appeal filed by the respondent assessee relying on the judgment passed by the Apex Court in the case of Vijay Prakash D. Mehta Vs. Collector of Customs reported in (1989) 175 ITR 540(SC) dealing with the similar provisions under the Customs Act in which it has been held that right of appeal is neither an absolute right nor an ingredient of natural justice, the principles of which must be followed in all judicial and quasi judicial adjudications and another judgment of the Karnataka High Court in the case of CIT Vs. K Satish Kumar Singh reported in 2012 209 Taxman 502(Karn.) wherein a view has been taken that if admitted tax on returned income is paid, then the appeal has to be admitted for adjudication by the CIT(A) to hear and decide the same on merits. The ITAT also relied upon various decisions of different Benches and concluded that non- payment of tax due on return income is only defect, but not void, thus if the tax is paid on the income returned, either before or at the time of or after filing of return, it will be sufficient compliance to provisions of sub-section 4 of Section 249 of the Act.
9. Heard, learned counsel for the appellant and perused the record.
10. In the present appeal, the single ground has been raised by the 7 ITA No. 184 of 2023 & ITA No. 186 of 2023 appellant that in terms of Section 249(4)(a) of the Act, does not provide that appeal may be entertained after depositing the admitted tax. In other words, it is submitted by the appellant/revenue in the appeal that appeal could not be entertained in terms of Section 249(4)
(a) of the Act, if the admitted tax was deposited after filing of an appeal.
11. From perusal of the order of ITAT, it is clear that the order has not been passed on merits and it has interpreted Section 249(4)(a) of the Act which deals with the issue of entertaining an appeal in the case where amount is deposited, though it may be prior to filing an appeal or after appeal.
12. Since there is no merit in the appeal, the ITAT has remanded the matter back to the CIT (A) for adjudication on merits based on the law laid down in the case of Vijay Prakash D. Mehta and CIT Vs. K Satish Kumar Singh(supra) and, therefore, the same cannot be said to be erroneous and prejudicial to the interest of revenue.
13. For the aforesaid reasons, we have not hesitation to hold that no question of law, much less any substantial question of law arises from the order of the ITAT requiring consideration by this Court.
14. In view of the aforesaid discussion, we do not find any merit in both these appeals, which in our opinion deserve to be and are hereby dismissed in limine.
15. Let a copy of this order be kept in the record of ITA No. 186/2023.
sh/- (S.A. Dharmadhikari) (Gajendra Singh) SEHA Digitally signed by SEHAR HASEEN DN: c=IN, o=HIGH COURT OF MADHYA PRADESH BENCH Judge Judge R INDORE, ou=BENCH AT INDORE, 2.5.4.20=900ec6fc757798eaeb 3df7a32860bd3298415a4d1c2 d91436213f2568c8f27da, HASEE postalCode=452001, st=Madhya Pradesh, serialNumber=E7DBBA955B26 2C04B8413251CE7FB6F0B7DB A610C57F1559C08BF6C6F5DD N 40D4, cn=SEHAR HASEEN Date: 2024.04.27 13:32:17 +05'30'