M/S Heena Export Corporation, Link Road, Faridabad v. Chief Commissioner Of Income Tax, (Osd), Faridabad & Another

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.A No. 380 of 2007 Date of decision : September 02, 2008 M/S Heena Export Corporation, Link Road, Faridabad ...... Appellant. through Mr.Akshay Bhan, Advocate v. Chief Commissioner of Income Tax, (OSD), Faridabad & another, ...... Respondents CORAM : HON'BLE MR.JUSTICE ADARSH KUMAR GOEL HON'BLE MR.JUSTICE AJAY TEWARI *** 1. Whether Reporters of Local Newspapers may be allowed to see the judgment ? judgment ? 2. To be referred to the Reporters or not ? 3. Whether the judgment should be reported in the Digest ? *** AJAY TEWARI, J The present appeal proposes the following substantial questions of law :- “1. Whether the CCIT was justified in passing the orderdated 30.3.2006 when under section 263 the powers arevested in the Commissioner and not any other officereven the Chief Commissioner ? 2. Whether the order passed by the learned AppellateTribunal is legally sustainable in view of the fact that theAssessment Order passed in the present case was neithererroneous nor prejudicial to the interest of Revenue ? 3.Whether in the facts and circumstances of the present case, the essential attributes of Section 263 of theIncome Tax Act, 1961 i.e the order of Assessment beingprejudicial to the interest of the revenue or beingerroneous, not being met, the impugned order of thelearned Tribunal is legally sustainable in the eyes of law?The order impugned is of the Income Tax Appellate Tribunal,dated 13.4.2007 whereby the appeal of the appellant against the orderpassed by the Chief Commissioner of Income Tax dated 30.3.2006 underSection 263 of the Income Tax Act, 1961 (for short “the Act”) cancellingthe assessment earlier made and directing the Assessing Officer to make theassessment afresh, has been dismissed. A perusal of the impugned orders reveals that the ChiefCommissioner found as many as six reasons to support the order ofcancellation of the earlier assessment. Learned counsel for the appellant has relied upon the decisionof the Hon'ble Supreme Court in Malabar Industrial Companyv.Commissioner of Income Tax, 243 ITR 83 to canvass that the impugnedorders do not satisfy the condition that the assessment was prejudicial to therevenue. He further states that the reasons spelt out only indicate that twoviews are possible and that if it is so, it cannot be held that the assessmentorder was prejudicial to the revenue. Learned Tribunal, after discussing a catena of judgments 'including Malabar Industrial Companys case(supra), found that theassessment order does not contain any discussion, does not refer to anycorrespondence, does not indicate that the Assessing Officer had made anyinquiry to verify expenditure etc. and that no reasons have been given to support the findings. After a careful consideration of the matter, we feel that eventhough some of the reasons advanced by the Chief Commissioner may notmeet the test of being erroneous, all of them cannot be held to be perverse. The other contention is that the order under Section 263 of theAct could have been passed only by the Commissioner and not by the ChiefCommissioner of Income Tax. We find no such water tightcompartmentalization in Section 263 of the Act. In view of the discussion above, none of the questionsproposed can be held to be substantial questions of law. Consequently, thepresent appeal is dismissed with no order as to costs. ( AJAY TEWARI ) JUDGE September 02, 2008'kk' ( ADARSH KUMAR GOEL ) JUDGE