Compucom Software Limited v. Principal Commissioner Of Income Tax, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Income Tax Appeal No. 3/2023 Compucom Software Limited, Having Its Address At It-14-15,Epip Sitapura, Jaipur. ----Appellant Versus Principal Commissioner Of Income Tax, Jaipur 2, Jaipur, HavingIts Address At New Central Revenue Building, Bhagwan DadRoad, Jaipur ----Respondent For Appellant(s) : Mr. Siddharth Ranka with Ms. Apeksha Bapna HON'BLE THE CHIEF JUSTICE AUGUSTINE GEORGE MASIH HON'BLE MR. JUSTICE SAMEER JAIN Order 03/10/2023ORAL 1.Being aggrieved and dissatisfied with the impugned orderdated 31.08.2022, passed by the learned Income Tax AppellateTribunal, Jaipur Bench, Jaipur (for short “ITAT”), in Income TaxAppeal No. 153/JP/2022, whereby the appeal of the appellant-assessee was allowed to the extent of remanding the matter backto Principal Commissioner of Income Tax (for short “PCIT”) forafresh consideration, the present appeal has been filed by theappellant-assessee under Section 260A of the Income Tax Act,1961 (for short “IT Act”). 2.Heard learned counsel for the appellant-assessee. 3.Learned counsel for the appellant-assessee submitsthat the appellant-assessee filed its return of income on28.11.2017 for the FY 2017-2018 declaring the total income at Rs. 10.91 crores (approx). The said return was selected for scrutinyand thereafter the Additional Commissioner of Income Tax (forshort “ACIT”) passed an assessment order dated 17.12.2019under Section 143(3) of the IT Act wherein the total income wasassessed at Rs. 11.17 crores (approx) after making additions ofRs. 25.89 lakhs (approx) under various heads. The PCIT, inexercise of his revisionary power, found the assessment order tobe prejudicial and against the interest of the revenue andaccordingly issued notice to the appellant-assessee under Section263 of the IT Act on 12.03.2022 and date of hearing was fixed on21.03.2022. It is contended that since the notice and date ofhearing were fixed at the fag end of the financial year, theappellant-assessee filed an adjournment application on21.03.2022 on the Income Tax Portal and the said application wassuccessfully submitted. However, despite that, the PCIT passedthe order dated 27.03.2023 with the specific observation thatsince no reply was filed by the appellant-assessee, the order isbeing passed on the basis of material available on record. The saidorder dated 27.03.2023 was assailed before the ITAT and the ITAT,vide order dated 31.08.2022 allowed the appeal, by noting thatthere were violations of principles of natural justice, but only tothe extent of remitting the matter back to the PCIT. 4.The primary grievance of the appellant-assessee is thatthe ITAT, in the case of Ashutosh Bhargava vs. PCIT-2 Jaipur(ITA No. 20/JP/2021; decided on 06.01.2022), in similarfacts and circumstances, had set aside the entire revisionalproceedings initiated under Section 263 of the IT Act, whereas in the case of the appellant-assessee, the matter was remandedback to the PCIT. Reliance was also placed on Apex Courtjudgment of Maneka Gandhi vs. Union of India and Ors.reported in AIR 1978 SC 597 and judgment of Allahabad HighCourt in the case of M/s M.L. Chains vs The Pr. Commissionerof Income Tax-1 & Ors. (Writ Tax No. 638/2022; Decidedon 16.08.2023; Neutral Citation: 2023:AHC:163882) 5.Having heard the learned counsel for the appellant-assessee and upon consideration of the material on record, thisCourt is of the considered view that the contentions raised by theappellant, asserting that the entire proceedings initiated underSection 263 of the IT Act should be set aside, is not tenable forthe following reasons: 5.1)Because it is undisputed that proceedings under Section263 of the IT Act were initiated well within the statutory timelimit, albeit towards the fag end; 5.Having heard the learned counsel for the appellant-assessee and upon consideration of the material on record, thisCourt is of the considered view that the contentions raised by theappellant, asserting that the entire proceedings initiated underSection 263 of the IT Act should be set aside, is not tenable forthe following reasons: 5.1)Because it is undisputed that proceedings under Section263 of the IT Act were initiated well within the statutory timelimit, albeit towards the fag end; 5.2)Because the appellant-assessee was afforded areasonable opportunity of hearing and to present their contentions,even though the notice period for hearing was somewhat short onaccount of impending expiration of the assessment period. 5.3)Because the adjournment application was also filed by theappellant-assessee on the day of the hearing, despite reasonableopportunity being given. 5.4)Because the reliance placed upon the order of AshutoshBhargava (supra), issued by the ITAT, is predicated on distinguishablefactual circumstances. In the case of Ashutosh Bhargava (supra),the assessee was an individual, and it was observed that sufficient timeand opportunity had not been provided to him. It is noteworthy that the factual matrix in the present case is disparate from that of AshutoshBhargava(supra). Even otherwise, it is imperative to recognize thatthe said order emanated from the ITAT and does not possess bindingauthority over this Court. 5.5)Because the ITAT, in its considered judgment, took note ofthe fact that the assessee was not accorded sufficient opportunityduring the prior proceedings, thereby deviating from the principles ofnatural justice. Consequently, the ITAT exercised its discretion toremand the case for afresh consideration. It is essential to underscorethat such a decision cannot be characterized as perverse. Given thecircumstances at hand, the remand order stands as a valid andappropriate course of action. 6.An appeal from the order of the learned ITAT can only beadmitted on a substantial question of law. The law on admitting anappeal from an order of a tribunal, on substantial question of law, hasbeen clarified by the Hon’ble Supreme Court in Steel Authority ofIndia Ltd. vs. Designated Authority, Directorate General of Anti- Dumping and Allied Duties and Ors. (Neutral Citation:2017/INSC/356) reported in (2017) 13 SCC 1, wherein the ApexCourt has held that if the tribunal, on consideration of the material andrelevant facts, had arrived at a conclusion which is a possibleconclusion, the same must be allowed to rest even if the higher Courtsare inclined to take another view of the matter. 7.In light of the prevailing facts and circumstances, whensubstantial relief has already been granted, there exists nojustifiable reason to intervene or formulate substantial questionsof law. 8.Accordingly, the present appeal stands dismissed. Pending application(s), if any, shall stand disposed of. (SAMEER JAIN),J (AUGUSTINE GEORGE MASIH),CJ Pooja /19