Ita/247/2011 Of Commissioner Of Income Tax Ii v. M/S Vijay Bharat Cigarette Store

IN THE HIGH COURT OF PUNJAB & HARYANA AT CHANDIGARH Income Tax Appeal No. 247 of 2011Date of Decision:D7[th]May, 2015The Commissioner of Income TaxIl, Amritsar..Appellant VerSwUS M/s Vijay Bharat Cigarette Store, Dhalhousie Road, Pathankot..Respondent CORAM:HON'BLE MR. JUSTICE S.J.VAZIFDAR, ACTING CHIEF JUSTICE.HON'BLE MR. JUSTICE GS.SANDHAWALIA. | Present:Mr. Denesh Goyal, Advocate, for the appellant. Mr. S.K.Mukhi, Advocate, for the respondent. FS 2S S.J.VAZIFDAR, ACTING CHIEF JUSTICE This is an appeal against the order of the Income Tax Appellate| Tribunal allowing the respondent’s appeal against the order of the Commissioner|of Income Tax (Appeals) passed under Section 263 of the Income Tax Act, 1961(for short ‘the Act’) for the assessment year 2004-05. The appellant contends|that the tollowing substantial question of law arises in this appeal:- CWhether on the facts and circumstances of the case,Hon’ble ITAT Bench was justified in law and on thefacts|in holding that learned CIT has no jurisdiction under|section 263 of the Act to substitute his view in place of|view taken by the A.O. being quasi-judicial authority. In our view, the substantial question of law does not arise in this| Case. oOOn 01.11.2004, the respondent filed its return of income in the sum|oft7,07,630/-. On 11.02.2005, the return was processed under section 143(1)|of the Act. The Assessing Officer adopted proceedings for reopening under| ITA No. 247 of 2011 Sections 147 and 148 of the Act and on 03.07.2007 made an assessment under|section 143(3) and 147 of the Act at an income of9.21,340/-. 3On 13.08.2007, the respondent filed an appeal against the above|order of assessment dated (03.07.2007. The Commissioner of [Income Ta(Appeals) dealt with in detail the respondent’s case regarding payment of|interest to its partners. By an order dated 02.01.2012, C.I.T. (A) noted that under|Clause 17 of the partnership-deed, the partners were entitled to receive from the|firm the interest @ 12% per annum on their capital as per books of the firm to becalculated in their credit balance in the firm’s books as on the first day of the|accounting period. It was held that the payment of interest was in accordance|with the provisions of Section 40(b)(iv) of the Act and the C.I.T. (A) deleted|disallowance of1,66,968/- and held the respondent to be entitled to total reliefot2,13,710/-. It is important to note that it was held that the partners had acredit balance on the last date of the previous accounting year and could claim|interest on this balance as per the terms of the partnership deed. This order has|attained finality and has not been challenged. | 4AIn the meantime, the C.I.T. (A) had initiated proceedings under|section 263 of the Act contending that the Assessing Officer had failed to make|necessary enquiries and to consider the matter in its correct perspective. On|25.01.2010, a notice to show-cause was issued in respect of the proceedings|under section 263 of the Act. By an order dated 12.03.2010, C.I.T. passed an|order in the proceedings under section 263 of the Act. The C.I.T. set-aside the|assessment order dated 03.07.2007 and directed the Assessing Officer to pass a_fresh order after proper examination of the matter. ITA No. 247 of 2011 5 _By the order dated 31.01.2011 impugned in the present appeal, the|Tribunal set-aside the order dated 12.03.2010. 6_This brings us to parallel proceedings in revision which has led to|the passing of the order impugned in the present appeal. ITA No. 247 of 2011 5 _By the order dated 31.01.2011 impugned in the present appeal, the|Tribunal set-aside the order dated 12.03.2010. 6_This brings us to parallel proceedings in revision which has led to|the passing of the order impugned in the present appeal. J |On 30.12.2010, a fresh assessment order was passed by the|Assessing Officer pursuant to the order dated 12.03.2010 passed under section|263 of the Act. By an order dated 24.03.2011, the Tribunal set-aside this order inview of the order dated 31.01.2011 which is impugned in the present appeal. Aswe noted earlier, the order dated 31.01.2011 set-aside the order dated 12.03.2010passed under section 263 of the Act. As we also noted earlier, by an order dated|Q2.01.2012 C.I.T. (A) had allowed the respondent’s appeal against the order ofassessment dated 03.07.2007and this order has attained finality. It has)admittedly not been challenged by the respondent. &In view of the fact that the order dated 02.01.2012 has attained|finality, it would in any event not be possible to proceed any further in the|parallel proceedings under section 263 of the Act. The observations in the order|dated 02.01.2012regarding the validity of the payment of interest by therespondent/assessee have also attained finality. © 9The appellant can not succeed in the proceedings under section 263only by an order and upon a finding which would be contrary to and in conflict|with the findings and the decision dated 02.01.2012 of the C.I.T. (A) in the|appeal filed by the respondent against the order of assessment dated 03.07.2007.This would be impermissible as two parallel proceedings cannot be allowed|against the same assessment order. ITA No. 247 of 2011 10. The question of law, therefore, not only does not, but cannot arise| in the present case. 11. The appeal is therefore, dismissed. (S.J.VAZIFDAR),ACTING CHIEF JUSTICE (GS.SANDHAWALIA),JUDGE27[th]May,2015‘ravinder’Whether to be referred to the reporter or not. Yes No