Commissionerofincometax,Bilaspur (Cg)Bilaspur (Cg v. Indrajeet Singh Saluja

'l'C-fy^'^^^•".^SK"^ §.g?' ffci •^, HIGH COURT OF CHHATTISGARH AT BILASPURTax Case (Income Tax Appeal) No.45 of 2008 APPELLANT:CommissionerofIncomeTax,Bilaspur (CG)VersusBilaspur (CG)VersusRESPONDENT:Indrajeet Singh Saluja, Prop. HotelPreet, Bus Stand, Bilaspur (CG)Preet, Bus Stand, Bilaspur (CG) JUDGMENT FOR CONSIDERATIOh"— Sd/-TVDG'^ -10-2010 HON'BLE SHRI R.N. CHANDRAKAR, J Sd/-R.N. ChandrakarJudge eiu^-i^f^—o -tk POST FOR JUDGMENT ON 7 OCTOBER,2010 Sd/-Dhirendra MishraJudge ^. HIGH COURT OF CHHATTISGARH AT BILASPURTax Case (Income Tax A^peal) No.45 of 2008 APPELLANT: CommissionerofIncomeTax,Bilaspur (CG)Bilaspur (CG) Versus RESPONDENT: Indrajeet Singh Saluja, Prop. HotelPreet, Bus Stand, Bilaspur (CG) Present:Shri Rajeev Shrivastava, counsel for the appellant.Shri RanbirSingh Marhas, counsel for the respondent. Division Bench: Hon'ble Shri Dhirendra Mishra &Hon'ble Shri R.N, Chandrakar. JJ. JUDGMENT(Delivered on-j^ October, 2010) The following judgment of the Court was delivered by Dhirendra Mishra, J. 1.This appeal is admitted on the following substantial question of law:- "Whether on the facts and in the circumstances of the on the facts and in the circumstances of thecase, the ITAT wasjustified inlaw in canceling the orderof the CIT only on the ground that the order was basedon mere change of opinion while overlooking the factsthat specific infirmities and errors hadbeen clearlymentioned in the order?"of the CIT only on the ground that the order was basedon mere change of opinion while overlooking the factsthat specific infirmities and errors hadbeen clearlymentioned in the order?" 2.Briefly stated facts of the case are that the assessee filed his return for theassessmentyear2003-04disclosingthetotalincomeofRs.2,61,676/- including additional income of Rs.7,12,265/- detectedduring survey.The Assessing Officer completed the assessmentunder Section 143 (3) of the Income Tax Act, 1961 (for short 'the Act')on total income of Rs.4,11 ,470/-. 3.The CIT on examination ofthe assessment record found that:- (i)The assessee claimed and was allowed by theA.O. expenses debited in the account (including)prorate depreciation against the said undisclosedinvestment in clear-cut violation of section 69 and69CoftheAct.A.O. expenses debited in the account (including)prorate depreciation against the said undisclosedinvestment in clear-cut violation of section 69 and69CoftheAct. (ii)TheassesseemadethetotalinvestmentofRs.29,04,102/- in the entire hotel and the same asacceptedbytheA.O.withoutmakinganyinvestigation about the sources of the same.Rs.29,04,102/- in the entire hotel and the same asacceptedbytheA.O.withoutmakinganyinvestigation about the sources of the same.(iii)The B/sheet shows that a loan of Rs.25,28,258/-wastakenfrombankoutofwhichonlyRs.18,00,000/-wasapparentlyutilizedtowardsconstruction.ThefateofthebalanceofRs.7,28,258/-was not investigated by the A.O.wastakenfrombankoutofwhichonlyRs.18,00,000/-wasapparentlyutilizedtowardsconstruction.ThefateofthebalanceofRs.7,28,258/-was not investigated by the A.O. (iv) As this was the first year of the return, the sourcesof the amount reflected in the capital account wasnot verified by the A.O.of the amount reflected in the capital account wasnot verified by the A.O. (v)In the absence of any valuation report, it is notknown how the A.O. accepted value of the buildingshownwithouthavinganyguidancefromthecompetent authority."known how the A.O. accepted value of the buildingshownwithouthavinganyguidancefromthecompetent authority." (iv) As this was the first year of the return, the sourcesof the amount reflected in the capital account wasnot verified by the A.O.of the amount reflected in the capital account wasnot verified by the A.O. (v)In the absence of any valuation report, it is notknown how the A.O. accepted value of the buildingshownwithouthavinganyguidancefromthecompetent authority."known how the A.O. accepted value of the buildingshownwithouthavinganyguidancefromthecompetent authority." 4. After issuingnoticeunder Section 263(1) of the Act and afterconsidering the written reply of the assessee, the CIT pointed outspecific errors committed by the Assessing Officer during assessmentproceedings as detailed in paragraphs 4, 4.1, 4.2, 4.3, 4.4 & 5. It wasfurther observed that assessment in the case has been completed bythe A.O. in utter haste, failing in the process both to examine the factsproperly and also in initiating penalty proceedings for the concealmentof particulars of income by the assessee.It suffers from infirmities andaccordingly, it was held that the orderof the A.O. in this case iserroneousandprejudicialto the . interest of therevenue.Theassessment order was cancelled under Section 263 with direction tothe A.O. to frame it afresh.It was further directed that while passingthe order de novo, the A.O. will examine the issues mentioned in the order keeping in view the actions contemplated under Section 271(1)(c)oftheAct. 5. The assessee went up in appeal against the order of the CIT beforethe Tribunal, however, the Tribunal cancelled the order of the CIT withan 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. afterperusingthesamehascompletedtheassessment.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 isnothingbut isbasedonmere 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 isnothing 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 of 2008, 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 caseis squarely covered by the law laid down by this Court in the aforesaidjudgments. 7.Relying upon decisions of this Court in the matters of Commissionerof Income Tax, Bilaspur Vs. Harish Kumar Shah {Tax Case No.46 of 2008, 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 caseis 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 quasi 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 quasi 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) eannot 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) eannot 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. Barve 11. Heard learned counsel for the 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 haspassed the order under Section 263 (1) of the Act in discharge of itsquasi judicial function, but the instant appeal has been preferred bytheCIT 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 filed by thesame authority whose orderhas been reserved by the impugned order.is.After going through theorders of theA.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 ofassessment passed by the A.O., has cancelledthe order of the CIT on the 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). 14. 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 a reasoned order after affording opportunity of hearing to the parties.