Commissionerbilaspur (Cg v. Dineshkumaragrawal

fe-^ff'-i•-'--^*,,'%.'•s-T/y^//""^•';'1»BJ Jk: ^/^-^^•HIGH COURT OF CHHATTISGARH AT BILASPURTax Case (Income Tax Appeal) No.47 of 2008APPELLANT:CommissionerofIncomeTax,Bilaspur (CG)VersusRESPONDENT:DineshKumarAgrawal,Prop.DineshMarketing,P.H.Road,Korba (CG)JUDGMENT FOR CONSIDERATIONSd/-JUDGE-10-2010HON'BLE SHRI R.N. CHANDRAKAR. JSd/-R.N. Chandrakar^OJOi}L^-'0Judge-til'?'POSTFORJUDGMENTON OCTOBER,^Q-UL_Sd/-Dhirendra MishraJudge HIGH COURT OF CHHATTISGARH AT BILASPUR Tax Case (Income Tax ApDeal) No.47 of 2008 APPELLANT: ofIncomeTax, CommissionerBilaspur (CG) Versus RESPONDENT: DineshKumarAgrawal,Prop.DineshMarketing,P.H.Road,Korba (CG) Present:Shri Rajeev Shrivastava, counsel for the appellant.Shri Ranbir Singh Marhas, counsel for the respondent. Division Bench: Hon'ble Shri Dhirendra Mishra &Hon'ble Shri R.N. Chandrakar. JJ. JUDG.MENT(Delivered on _^ October, 2010) The following judgment of the Court was delivered by Dhirendra Mishra, J. 1. This appeal has been admitted on the following substantial question oflaw:-law:- "Whether"changetheconceptofofopinion"istheconceptofofopinion"isapplicable to the provisions of Section 263 especially asthe order of the Commissioner of Income Tax was notbased on any change of opinion but on the errorshighlighted in the order?"the order of the Commissioner of Income Tax was notbased on any change of opinion but on the errorshighlighted in the order?" 2.Briefly stated facts of the case are that the assessee filed his return ofhis income for the assessment year 2004-05 by disclosing total incomeof Rs.89,830/-. The case was selected for scrutiny after approval fromthe CCIT and the assessment was completed under Section 143 (3) ofthe Income Tax Act,1961(for short 'the Act') on total income ofRs.89,830/-.his income for the assessment year 2004-05 by disclosing total incomeof Rs.89,830/-. The case was selected for scrutiny after approval fromthe CCIT and the assessment was completed under Section 143 (3) ofthe Income Tax Act,1961(for short 'the Act') on total income ofRs.89,830/-. 3.On examination of the record, CIT found that the following aspects of the case have not been properly scrutinized by the A.O.:- (i)The assessee's claim about receipt of cash giftsfromthreedifferentpersonsamountingtoRs.4,00,000/-hadbeenallowedbytheA.O.without verifying the creditworthiness of the allegeddonors as well as the occasions warranting suchgifts.fromthreedifferentpersonsamountingtoRs.4,00,000/-hadbeenallowedbytheA.O.without verifying the creditworthiness of the allegeddonors as well as the occasions warranting suchgifts. (ii)Petty loans taken from relatives as well as loansadvanced to others were never verified.advanced to others were never verified. (iii)The expenses debited in the profit & loss a/c hadbeenacceptedwithout verifyingor callingthedetails.beenacceptedwithout verifyingor callingthedetails. (iv) The assessee has spent more in .LIC premium ascompared to house hold expenses.This has notbeen verified.compared to house hold expenses.This has notbeen verified. (v)Thebankstatementwerenotverifiedorinvestigated.investigated.(vi)Duringtherelevantyeartheassesseehasintroduced fresh capital to the tune of Rs.5,69,000/.This has been accepted without Verification of thesources."introduced fresh capital to the tune of Rs.5,69,000/.This has been accepted without Verification of thesources." The assessee was served with a notice under Section 263 (1) of the 4. Actandafter affordingopportunity of hearingto theassessee,infirmitieswerefoundintheassessmentorderasdetailedinparagraphs[4,][ 4.1,][ 4.2, 4.3,][ 4.4][ &][ 4.5][ of][ the][ order.][ The][ CIT][ held][ that]the order passed by the A.O. is erroneous and prejudicial to theinterest of the revenue and accordingly, cancelled the same underSection 263 of the Act with direction to the A.O. to frame it afresh.Itwas furi:her directed that while passing the order de novo, the A.O. willexamine the issues mentioned in the order keeping in view the actionscontemplated under Section 271 (1)(c) ofthe Act. The assessee was served with a notice under Section 263 (1) of the 4. Actandafter affordingopportunity of hearingto theassessee,infirmitieswerefoundintheassessmentorderasdetailedinparagraphs[4,][ 4.1,][ 4.2, 4.3,][ 4.4][ &][ 4.5][ of][ the][ order.][ The][ CIT][ held][ that]the order passed by the A.O. is erroneous and prejudicial to theinterest of the revenue and accordingly, cancelled the same underSection 263 of the Act with direction to the A.O. to frame it afresh.Itwas furi:her directed that while passing the order de novo, the A.O. willexamine the issues mentioned in the order keeping in view the actionscontemplated under Section 271 (1)(c) ofthe Act. 5. The assessee went up in appeal against the order of the CIT beforethe Tribunal, however, the Tribunal cancelled the order of the CIT withthe Tribunal, however, the Tribunal cancelled the order of the CIT with -:^^ 1 !SQs£ass^^jSS^ . an observation that "a close perusal of the relevant documents andevidences, which have been placed before us in form of paper books,makes it clear that the assessee has placed all the documents andevidences in respect of these items before the A.O. and the A.O. afterperusingthesamehascomptetedtheassessment.Since theassessment under section 143(3) was completed by the A.O. only afterperusing the relevant details and evidences placed by the assessee,the action of Id. CIT in invoking the provision under section 263 isnothingbutisbasedonmere change of opinion,whichis notpermissibleunder thelaw asheldby thedifferentCourtsandTribunals." 6.Learned counsel for the appellant submitted that CIT after carefulexamination of the record has detailed various aspects in its orderwhich clearly points out that assessment was completed in haste andwithout proper enquiry. The order under Section 263 was passed afterdue notice and after affording opportunity of hearing to the assessee,however, the ITAT without dealing with various aspects detailed in theorder of the CIT has cancelled the order with an observation that theorder under Section 263 of the Act is nothing but is based on merechange of opinion which is not permissible under the law. 7.Relying upon decisions of this Court in the matters of Commissionerof Income Tax, Bilaspur Vs. Harish Kumar Shah {Tax Case No.46 of2008, decided on 8January, 2010} and Commissioner of IncomeTax, Bilaspur (CG) Vs. Dr. Smt. Anju Goyal {Tax Case No.36/2008,decided on 1September, 2009}, it was argued that the present case is squarely covered by the law laid down by this Court in the aforesaidjudgments. 8.On the other hand,learned counsel for the respondent/assesseesubmitted that the instant appeal has been preferred by the CITwhereas the order under Section 263 (1) has been passed by the CITin exercise of its quas/ judicial function.The appeal by the revenueunder Section 260-A can be preferred by the Chief Commissioner orthe Commissioner of Income Tax.Filing of appeal by the CIT forvindication of its own order passed under Section 263 (1) whiledischarging quasi judicial function is impermissible and the instantappeal ought to have been filed by the Chief Commissioner.On thisground alone, the appeal deserves to be dismissed.submitted that the instant appeal has been preferred by the CITwhereas the order under Section 263 (1) has been passed by the CITin exercise of its quas/ judicial function.The appeal by the revenueunder Section 260-A can be preferred by the Chief Commissioner orthe Commissioner of Income Tax.Filing of appeal by the CIT forvindication of its own order passed under Section 263 (1) whiledischarging quasi judicial function is impermissible and the instantappeal ought to have been filed by the Chief Commissioner.On thisground alone, the appeal deserves to be dismissed. 9.It was further argued that the Tribunal has passed the impugned orderafter going through the relevant documents and evidences which havebeen placed before it in form of paper book and the Assessing Officerhas also completed the assessment after perusing the same.after going through the relevant documents and evidences which havebeen placed before it in form of paper book and the Assessing Officerhas also completed the assessment after perusing the same. 10. In these circumstances, the order of the Commissioner under Section263 (1) cannot be affirmed by setting aside the order of the Tribunalonly on the ground that the Tribunal has not dealt with errors andinfirmities pointed out by the CIT by a reasoned order. At the most, thematter may be remanded to the Tribunal for passing a reasoned orderafresh after affording opportunity of hearing to the parties.263 (1) cannot be affirmed by setting aside the order of the Tribunalonly on the ground that the Tribunal has not dealt with errors andinfirmities pointed out by the CIT by a reasoned order. At the most, thematter may be remanded to the Tribunal for passing a reasoned orderafresh after affording opportunity of hearing to the parties. 11. Heard learned counsel forthe parties. 12. So far as objection of the respondent against the appeal preferred bythe CIT against the order of the Tribunal is concerned, though CIT hasthe CIT against the order of the Tribunal is concerned, though CIT has Barve passed the order under Section 263 (1) of the Act in discharge of itsquasi judicial function, but the instant appeal has been preferred by theCIT in his administrative capacity in the interest of the revenue.Therefore, we are of the considered opinion that the instant appealcannot be dismissed only on the ground that it has been flled by thesame authority whose order has been reversed by the impugned order. is.After going through the orders of the A.O. as also of the CIT passedunder Section 263 (1) and the impugned order, we find that theTribunal, without adverting to the reasons assigned by the CIT forcanceling the order of assessment passed by the A.O., has cancelledthe order of the CIT onthe ground that the same is based on merechange of opinion. The issue involved in this appeal has already beenconsidered and decided by this Court in the matters of Dr. Smt. AnjuGoyal and Harish Kumar Shah (Supra). l4.For the aforesaid reasons, we are of the opinion that the impugnedorder of the ITAT cannot be sustained.Accordingly, the same ishereby set aside. The matter is remanded to the Tribunal to decide theappeal preferred by the assessee against the order of CIT afresh by areasoned order after affording opportunity of hearing to the parties.