Mr.ashok Kumar Jainno v. The Commissioner Of Income Tax Appeals – V Room

IN THE HIGH COURT OF JUDICATURE AT MADRAS DATED : 22.08.2019 CORAM THE HONOURABLE MR.JUSTICE M.SUNDAR W.P.No.24772 of 2019 & W.M.P.Nos.24412 and 24414 of 2019 Mr.Ashok Kumar JainNo.32, Narayana Mudali StreetSowcarpet, Chennai – 600 079 ... Petitioner -Vs- 1. The Commissioner of Income Tax Appeals – V Room No.215, 2[nd] Floor, Ayankar Bhavan No.121, M.G.Road, Nungambakkam Chennai – 600 034 Room No.215, 2[nd] Floor, Ayankar Bhavan No.121, M.G.Road, Nungambakkam Chennai – 600 034 2.The Chief Commissioner of Income Tax-I Chennai Chennai 3.The Income Tax Officer Business Award – X(1) Chennai...Respondents Business Award – X(1) Chennai...Respondents PRAYER: Writ Petition filed under Article 226 of theConstitution of India praying for issuance of a Writ ofCertiorari calling for the records pertaining to the orderhearing ITA No.03/2018, 19/A-5 dated 18.07.2019 for theAssessment Year 2006-2007 passed by the 1[st] Respondent and quashthe same as null and void. For Respondents : Ms.Hema Muralikrishnan Senior Standing Counsel (IT) Mr.P.J.Sri Ganesh, learned counsel on record for writpetitioner and Ms.Hema Muralikrishnan, learned senior StandingCounsel, who has accepted notice on behalf of all the threerespondents, are before this Court. 2.With consent of learned counsel on both sides, main writpetition itself is taken up, heard out and is being disposed of. 3.After hearing both sides, it comes to light that theentire matter turns on a very narrow compass now. Therefore,short facts shorn of elaboration will suffice. 4.Writ petitioner is an assessee under 'Income Tax Act,1961' ('IT Act' for brevity), that an Assessment Order came tobe passed against the writ petitioner with regard to AssessmentYear 2006-07, that writ petitioner carried the matter in appealto the Appellate Authority, namely Commissioner of Income Tax(Appeals) and thereafter, has also filed a further appeal,obviously post orders of Appellate Authority and that thisfurther appeal is to 'Income Tax Appellate Tribunal, Chennai'('ITAT' for brevity). The assessment order is dated 21.03.2014and the order of ITAT is dated 04.03.2019 in ITANo.1426/Chny/2018. The operative portion of the order of ITATis contained in Paragraph 5 of the impugned order and therelevant portion of Paragraph 5 reads as follows: '5........ Accordingly, the orders of both theauthorities below are set aside and the entire issue isremitted back to the file of the Assessing Officer.The Assessing Officer shall bring on record the role ofthe assessee in promoting the company and relationshipof the assessee with the other promotors role of theassessee in inflating the price of shares etc. TheAssessing Officer shall also furnish a copy of thereport said to be received from DIT (I&CI), New Delhito the assessee and thereafter decide the issue afreshin accordance with law, after giving a reasonableopportunity to the assessee.' 5. Therefore, it comes out clearly that ITAT, remanded thematter back to the Original Authority, namely the Assessingofficer. To be noted, the impugned order pertains to penaltyunder Section 271(1)(c) of IT Act. 6. Adverting to the 'order passed by the first respondentdated 18.07.2019 in ITA No.03/2018-19/A-5' (hereinafter'impugned order' for brevity), learned counsel for writpetitioner submits that it has been passed on the erroneousassumption that the writ petitioner has not carried the matterto ITAT. This comes out clearly from Paragraph 4 of theimpugned order and the relevant portion reads as follows:'4...... On appeal, the Commissioner of IncomeTax (Appeals)-5, Chennai vide his order dated26.10.2016 dismissed the quantum appeal by confirmingthe addition made at Rs.15,39,444/- on account of 6. Adverting to the 'order passed by the first respondentdated 18.07.2019 in ITA No.03/2018-19/A-5' (hereinafter'impugned order' for brevity), learned counsel for writpetitioner submits that it has been passed on the erroneousassumption that the writ petitioner has not carried the matterto ITAT. This comes out clearly from Paragraph 4 of theimpugned order and the relevant portion reads as follows:'4...... On appeal, the Commissioner of IncomeTax (Appeals)-5, Chennai vide his order dated26.10.2016 dismissed the quantum appeal by confirmingthe addition made at Rs.15,39,444/- on account of disallowance of claim of exemption of long term capitalgains u/s.10(38) of the IT Act, 1961. The appellantdid not appeal further.'(Underlining made by this Court to highlight and supplyemphasis) 7. Ms.Hema Muralikrishnan, learned counsel, who hasaccepted notice on behalf of all the respondents, submitted thatITAT has remanded the matter back to the Original Authority,namely the Assessing Officer, subject matter of appeal beforeITAT is the assessment order for the assessment year concerned,namely 2006-2007 and it is always open to the third respondentto commence penalty proceedings subject of course to the ordersof the Assessing officer post remand by ITAT. Though obvious,it is clear that it depends on the nature of the order which theAssessing Officer passes. 8. However, the sole pivotal point in the instant writpetition is, impugned order has been passed by the firstrespondent on the erroneous presumption that writ petitionerhas not carried the matter in appeal after first AppellateAuthority, namely Commissioner of Income Tax Appeals, whereasthere is a further appeal to ITAT which has passed an ordersetting aside the Assessment Order and remanding the matter toAssessing officer as mentioned supra. 9. Absent assessment order there can be no penaltyproceedings. Therefore, in the light of the narrative thus far,the impugned order dated 18.07.2019 bearing reference ITANo.03/2018-19/A-5 is set aside. It is made clear that impugnedorder is set aside on the sole ground that it has been passed ona wrong premise that writ petitioner has not appealed furtherafter order of first Appellate Authority or in other words, ithas been passed without appreciating the factual matrix thatwrit petitioner carried the matter to ITAT from Commissioner ofIncome Tax Appeals. This writ petition is allowed albeit with the rider thatit is open to the third respondent to initiate penaltyproceedings if the need arises subject to and after orders arepassed by the Assessing Officer post remand by ITAT. No costs.Consequently, connected miscellaneous petitions are closed.gpa Sd/- Assistant Registrar //True Copy// Sub Assistant Registrar To 1. The Commissioner of Income Tax Appeals – V Room No.215, 2[nd] Floor, Ayankar Bhavan No.121, M.G.Road, Nungambakkam Chennai – 600 034 2.The Chief Commissioner of Income Tax-I Chennai Chennai 3.The Income Tax Officer Business Award – X(1) Chennai Business Award – X(1) Chennai +1cc to Ms.Hema Muralikrishnan, Advocate, SR.No.72051+1cc to Mr.P.J.Rishikesh, Advocate, SR.No.71895+1cc to the Govt.Pleader, Vide Sr.No.74069 W.P.No.24772 of 2019 &W.M.P.Nos.24412 and 2441 of 2019 Kak(24/09/2019)