Principal Commissoner Of Income Tax 1Principal Commissoner Of Income Tax 1 v. Aura Securities Pvt Ltd

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 877 of 2018 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE M.R. SHAH andHONOURABLE MR.JUSTICE A.Y. KOGJE ====================================== 1 Whether Reporters of Local Papers may be allowed to see the judgment ?allowed to see the judgment ? 2 To be referred to the Reporter or not ? 3 Whether their Lordships wish to see the fair copy of the judgment ?copy of the judgment ? 4 Whether this case involves a substantial question of law as to the interpretation of the Constitution of India or any order made thereunder ?question of law as to the interpretation of the Constitution of India or any order made thereunder ? ======================================PRINCIPAL COMMISSONER OF INCOME TAX 1PRINCIPAL COMMISSONER OF INCOME TAX 1 Versus AURA SECURITIES PVT LTD ======================================Appearance: MRS MAUNA M BHATT(174) for the APPELLANT(s) No. 1MR VIJAY S RANJAN(6126) for the RESPONDENT(s) No. 1====================================== CORAM: HONOURABLE MR.JUSTICE M.R. SHAH andHONOURABLE MR.JUSTICE A.Y. KOGJE Date : 23/07/2018 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE M.R. SHAH) [1.0]Feeling aggrieved and dissatisfied with the impugned order passed by the learned Income Tax Appellate Tribunal “B” Bench, Ahmedabad (hereinafter referred to as “the learned Tribunal”)dated 05/09/2017 in ITA No.849/Ahd/2015 for the Assessment Year 2008-09 by which the learned Tribunal has dismissed the said Appeal preferred by the revenue and has confirmed the order passed by the learned CIT(A) quashing and setting aside the order passed under Section 154 of the Income Tax Act, revenue has preferred the present Tax Appeal with the following proposed question of law; “Whether the Appellate Tribunal has erred in law and on facts in quashing the order made u/s 154 of the Act?” [2.0]The facts leading to the present Appeal in nutshell are as under; [2.1]The assessee filed the return of income on 28/09/2008 declaring the total income of Rs.3,79,41,880/-. Thereafter, revised return of income was filed by the assessee declaring the total income at Rs.2,77,42,980/-. The case was selected for scrutiny, and therefore, notice under Section 143(2) of the Income Tax Act was issued. During the course of assessment proceedings, the assessee claimed long term capital gain against transfer of shares of M/s Anagram stockbroking Ltd. and M/s Anagram Comtrade Ltd. The same was allowed by the learned Assessing Officer by a detailed order and considering the claim of the assessee in detail, the learned Assessing Officer passed the assessment order on 27/12/2010 assessing the total income of Rs.8,04,06,985/- by working out “indexed cost” at Rs.7,71,50,007/- and computed the long term capital gain at Rs.7,30,05,993/-. At this stage, it is required to be noted that the assessment was scrutiny assessment. Thereafter, the learned Assessing Officer in exercise of powers under Section 154 of the Income Tax Act passed the revised assessment order and recalculated the indexed cost of acquisition applying the provisions of Section 48(iii) of the Income Tax Act, which worked out to Rs.4,67,61,819/- as against Rs.7,71,50,007/- shown by the assessee and long term capital gain of Rs.10,33,94,94,181/- as against Rs.7,30,05,993/- shown by the assessee. Consequently, the learned Assessing Officer enhanced the long term capital gain by Rs.3,03,88,188/-. Feeling aggrieved and dissatisfied with the order passed by the learned Assessing Officer under Section 154 of the Income Tax Act, the assessee preferred Appeal before the learned CIT(A) and the learned CIT(A) quashed and set aside the order passed under Section 154 of the Income Tax Act by observing that the learned Assessing Officer wrongly assumed the jurisdiction as the original assessment order was scrutiny assessment order and was passed after detailed consideration of the claim, and therefore, it cannot be said that there was any error apparent and /or mistake, which was required to be corrected in exercise of powers under Section 154 of the Income Tax Act. The order passed by the learned CIT(A) has been confirmed by the learned Tribunal by the impugned order. Hence, revenue has preferred the present Tax Appeal with the aforesaid proposed question of law. [3.0]Heard Mrs Mauna Bhatt, learned Advocate appearing on behalf of the appellant and Ms. Urvija Shah, learned advocate appearing for Shri Vijay Ranjan, learned advocate appearing for the respondent – assessee. We have gone through the original assessment order as well as the subsequent order passed by the learned Assessing Officer under Section 154 of the Income Tax Act as well as the order passed by the learned CIT(A). Considering the original assessment order, it appears that the learned Assessing Officer passed a detailed order after considering the claim made by the assessee on long term capital gain and considering the indexed costs of acquisition after a detailed enquiry and considering the material /record. Thereafter in exercise of powers under Section 154 of the Income Tax Act, the learned Assessing Officer has revised the original assessment order by holding that the learned Assessing Officer did not calculate the indexed cost of acquisition in accordance with law and under the provisions of Section 48(iii) of the Income Tax Act, and therefore, having opined that there was a mistake on the part of the learned Assessing Officer while passing the original assessment order, the learned Assessing Officer recalculated the indexed cost of acquisition and passed the revised assessment order under Section 154 of the Income Tax Act. As rightly observed by the learned CIT(A), confirmed by the learned Tribunal, there was no error apparent and /or mistake apparent on the part of the learned Assessing Officer in passing the original assessment order for which the powers under Section 154 of the Income Tax Act were required to be exercised. Considering the order passed by the learned Assessing Officer under Section 154 of the Income Tax Act, it appears that while passing the order under Section 154 of the Income Tax Act, the learned Assessing Officer has considered the entire issue afresh as if the regular assessment proceedings. When the original assessment order was passed the same was after long drawn process of reasoning and as per catena of decisions powers under Section 154 of the Income Tax Act are not required to be exercised. As rightly observed, powers under Section 154 of the Income Tax Act can be exercised only when the mistake, which is sought to be rectified is an obvious mistake, which is apparent from the record and not a mistake, which is required to be established by long drawn process of reasoning on points. Under the circumstances, in the facts and circumstances of the case and considering the original assessment order passed by the learned Assessing Officer as well as the subsequent order passed by the learned Assessing Officer under Section 154 of the Income Tax Act, we see no reason to interfere with the impugned order passed by the learned Tribunal. No substantial question of law arises in the present Tax Appeal. Under the circumstances, present Tax Appeal deserves to be dismissed and is accordingly dismissed. (M.R. SHAH, J.)