M/S Krishna Ice Factory & Cold Storage v. Income Tax Officer

IN THE HIGH COURT OF PUNJAB AND HARYANA ATCHANDIGARH. I.T.A. No.555 of 2010 Date of decision: 22.11.2010 M/s Krishna Ice Factory & Cold Storage Vs. Income Tax Officer. -----Appellant. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOELHON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:-Mr. Avneesh Jhingan, Advocatefor the appellant. for the appellant. --- ADARSH KUMAR GOEL, J. 1. This appeal has been preferred by the assesseeunder Section 260-A of the Income Tax Act, 1961 (for short, “theAct”) against the order of the Income Tax Appellate Tribunal,Chandigarh dated 27.2.2009 in I.T.A. No.59/Chandi/2008proposing to raise following substantial questions of law:- “i)Whether in the facts, and circumstances of the case,the case appellant fell within clause 2(q) of theguidelines for the scrutiny of the cases and could thecase be selected for scrutiny?the case appellant fell within clause 2(q) of theguidelines for the scrutiny of the cases and could thecase be selected for scrutiny? ii)Whether in the facts, and circumstances of the case,the findings of the Tribunal that from the returns anddocuments filed it was not clear that the amountdistributed among the partners was of sale proceed offactory land is not perverse?the findings of the Tribunal that from the returns anddocuments filed it was not clear that the amountdistributed among the partners was of sale proceed offactory land is not perverse? iii)Whether in the facts, and circumstances of the case,the assessment under Section 143 (3) could havethe assessment under Section 143 (3) could have been done in violation of the guidelines issued by theCBDT?CBDT? iv)Whether in the facts, and circumstances of the case,the matter could have been remanded to A.O. forallowing an opportunity to cross examine theRevenue official when the evidence being relied uponthe Department was no evidence in the eyes of law? 2. Case of the assessee was taken up for scrutiny, asper Clause 2(q) of the CBDT guidelines i.e. introduction of freshcapital exceeding `10 lacs. The Assessing Officer, accordingly,made assessment, making addition to the declared income of theassessee. The CIT(A) remanded the matter for fresh assessmentby giving further opportunity to the assessee on the quantum ofaddition. The Tribunal modified the order of the CIT(A) withregard to valuation and left the matter open to be decided againby the Assessing Officer. Cross-objection of the assessee againstfinding on the issue of applicability of guidelines for scrutiny wasrejected by holding that at the time of picking up of the return inscrutiny, the Assessing Officer prima facie formed the requisiteopinion of introduction of capital exceeding `10 lacs. Even if onsubsequent examination of books of account, the quantum ofcapital introduced was not shown to be of that extent, the scrutinyassessment could not be set aside. 3. We have heard learned counsel for the assessee. 4. Only plea which has been now raised is that the viewtaken by the Tribunal was perverse and mere prima facie view oftaken by the Tribunal was perverse and mere prima facie view of introduction of capital exceeding `10 lacs was not sufficient. Itwas further submitted that there was no basis for forming such aprima facie opinion. 5.We are unable to accept the submission. At the stageof selection of case in scrutiny, final view about merits cannot betaken and it is only prima facie opinion on the basis of whichdecision to take a case in scrutiny is taken. In view of findingconcurrently recorded by the CIT(A) and the Tribunal that case ofthe assessee was picked up for scrutiny in accordance with theapplicable instructions, no substantial question of law arises. 6. The appeal is dismissed. (ADARSH KUMAR GOEL) JUDGE November 22, 2010ashwani (AJAY KUMAR MITTAL) JUDGE