T.c.(A) v. The Assistant Commissioner Of Income Taxcentral Circle I (3)

Dated : 31.08.2010 Coram : THE HONOURABLE MR.JUSTICE F.M.IBRAHIM KALIFULLAandTHE HONOURABLE MR.JUSTICE M.M.SUNDRESH T.C.(A) No.824 of 2010M/s SRM Systems & Software (P) LtdNo.2, Veerasamy StreetWest MambalamChennai 33. : Appellant v. The Assistant Commissioner of Income TaxCentral Circle I (3)121, Nungambakkam High RoadChennai 34. : Respondent Prayer :- Tax Case Appeal filed against the order of the Income Tax Appellate Tribunal, ChennaiBench 'C' dated 31.03.2009 in ITA.No.1221/Mds/2008. For appellant : Dr.Anitha SumanthFor respondent : Mr.K.Subramanian, SSC J U D G M E N T (Judgment of the Court was delivered byF.M.IBRAHIM KALIFULLA ) The assessee is the appellant and the appellant seeks to raise the following substantial questions oflaw:- "(i) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal isright in law in confirming the order of the Commissioner of Income Tax under Section 263 of theIncome Tax Act? (2) Whether on the facts and in the circumstances of the case the Income Tax Appellate Tribunal isright in law in holding that there was a receipt of Rs.6,87,77,922/- from Valliammai Society and thatthe Assessing Officer failed to make any enquiry in that regard and that the assumption ofjurisdiction by the Commissioner of Income Tax is justified?". 2. The brief facts are that there was a search under Section 132 of the Income Tax Act conducted atthe SRM Group and Educational Institutions as well as its Chairman Shri.T.R.Pachamuthu on12.08.2004 including his residence at Valasaravakkam. During the course of search, documentsrelating to the assessee were seized which inter-alia revealed the transactions of M/s Valliammai Society with the appellant/assessee, which were contained in the Compact Discs seized from thepremises of Shri.T.R.Pachamuthu. Nevertheless, with reference to a sum of Rs.6,87,77,922/-received by the assesseee from M/s Valliammai Society, there was no consideration in the order ofassessment. In the said circumstances, invoking the revisional jurisdiction under Section 263 of theIncome Tax Act, the Commissioner of Income Tax (Appeals) issued a show cause notice dated20.09.2007 making it clear that the order of the Assessing Authority was erroneous and was alsoprejudicial to the interest of the revenue. The appellant/assessee asked for copies of the materialsrelied upon by the department, which were also supplied. Certain explanations were also offered bythe appellant/assessee. It was in those circumstances, the Commissioner of Income Tax (Appeals)passed final orders on 27.03.2008 holding that the Assessing Authority completed the SearchAssessment Order under Section 153 C read with Section 153 A dated 29.12.2006, withoutconsidering and verifying the contents of the 9 CDs, which was erroneous and prejudicial to theinterests of the revenue and consequently directed the Assessing Officer to examine the said issuesand redo the same afresh by providing sufficient opportunity of hearing to the assessee under theprovisions of the Income Tax Act. 3. On further appeal by the assessee before the Tribunal, the Tribunal by relying upon the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. Vs CIT reported in 243 ITR83 held that inasmuch as even before the Commissioner of Income Tax (Appeals) there was noexplanation offered by the assessee regarding the treatment of certain portions of the expenditurerelating to the sum of Rs.6,87,77,922/- received from M/s Valliammai Society and the conclusion ofthe Commissioner of Income Tax (Appeals) that the Assessing Authority's order was absolutely silenton that aspect was justified. The Tribunal therefore held that the direction of the Commissioner ofIncome Tax (Appeals) that the Assessing Officer should examine the issue contained in theconcerned CDs after giving an opportunity to the appellant cannot be found fault with. 4. Having considered the orders of the Commissioner of Income Tax (Appeals) and that of the 4. Having considered the orders of the Commissioner of Income Tax (Appeals) and that of the Tribunal, we are not inclined to take a different view. As rightly held by the Commissioner of IncomeTax (Appeals), when the Assessing Officer completely omitted to deal with the receipt of a sum ofRs.6,87,77,922/- which was revealed from the CDs seized in the course of search held on 12.08.2004,certainly the order of the Assessing Authority was erroneous and consequently there was seriousprejudice caused to the interest of the revenue. In such circumstances, when the Commissioner ofIncome Tax (Appeals) has only directed the Assessing Officer to redo the exercise relating to thereceipt of a sum of Rs.6,87,77,922/- from M/s Valliammai Society by giving due opportunity to theappellant cannot be faulted. Since we do not find any lapse or wrong exercise of power by theCommissioner of Income Tax (Appeals), while invoking the jurisdiction under Section 263 of theIncome Tax Act, there is no scope to entertain this appeal by interfering with the orders of the lowerauthorities. Therefore, there is no question of law to be examined much less substantial question oflaw in this appeal. The appeal fails and the same is dismissed. We make it clear that we have notgone into the merits of the issue and it is for the Assessing Authority to consider the issues on itsown merits and in accordance with law. No costs. To 1.The Assistant Commissioner of Income TaxCentral Circle I (3)121, Nungambakkam High RoadChennai 34. 2. Income Tax Appellate Tribunal, Chennai Bench 'C' rg