The Commissioner Of Income Tax, Rohtak v. M/S Escorts Employees Ancillaries Ltd.,Faridabad

IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH Income Tax Appeal No.214 of 1999 Date of Order: 10.12.2013. The Commissioner of Income Tax, Rohtak ...Appellant Versus M/s Escorts Employees Ancillaries Ltd.,Faridabad. ..Respondent CORAM: HON'BLE MR. JUSTICE RAJIVE BHALLA HON'BLE MR. JUSTICE DR. BHARAT BHUSHAN PARSOON Present:Mr. Tejender K. Joshi, Advocatefor the appellant Mr. Akshay Bhan, Advocate and Ms. Supriya Garg, Advocate,for the respondent. RAJIVE BHALLA, J (Oral) The revenue is before us, challenging order dated 31.05.1999,passed by the Income Tax Appellate Tribunal, Delhi Bench “C”, Delhi,dismissing appeals filed by the revenue pertaining to assessment years1989-90 and 1990-91, raising the following substantial question of law:- “Whether on the facts and in the circumstances of thecase, the Hon'ble Tribunal was justified in deleting theadditional tax and confirming the order of Ld. CIT(A)even ignoring the provisions relating to charging ofadditional tax which were amended by the Finance Act,1993 with retrospective effect from 01.04.1989 i.e., afterdelivery of the Hon'ble High Court judgments relied upon by the Hon'ble ITAT?” Counsel for the revenue fairly concedes that the revenue hasfailed to frame a significant question, namely, that the Tribunal has failed to consider an argument raised as to the illegality of order passed by the CIT(A), setting aside the order passed under Section 154 of the Income TaxAct (hereinafter referred to as 'the Act').Counsel for the revenue praysthat a substantial question of law may be framed accordingly. Counsel for the assessee, on the other hand, submits that asthe revenue has not framed this question of law, it should not be allowed, atthis belated stage, to frame an additional question of law as such a coursewould necessarily cause prejudice to the assessee. We have heard counsel for the parties on this preliminaryissue, perused order passed by the CIT(A) as well as the order passed bythe ITAT and are satisfied that the revenue did indeed raise an argumentthat the order passed by the CIT(A), setting aside the order passed underSection 154 of the Act, is contrary to law. The learned Tribunal, however,failed to deal with this argument. We, therefore, proceed to frame asubstantial question of law in the following term:- “Whether the Income Tax Appellate Tribunal hascommitted an error of jurisdiction in failing to deal withthe argument raised by the revenue that theCommissioner of Income Tax (Appeals) was not justifiedin setting aside the order passed under Section 154 ofthe Act?” A perusal of the order passed by the ITAT reveals that, though,arguments were addressed on the question of legality of order passed bythe CIT(A), setting aside order passed by the Assessing Officer, invokingSection 154 of the Income Tax Act, the ITAT has not recorded any opinionthereon. The order passed by the ITAT, therefore, suffers from an error ofjurisdiction and must necessarily be rectified. As regards the second substantial question of law, the CIT(A) and the ITAT have apparently ignored Section 153(1)(a) as well asjudgment of the Hon'ble Supreme Court of India in AssistantCommissioner of Income-taxv. J.K.Synthetics Ltd., (2001) 251ITR0200, which, in our considered opinion, have a significant bearing onthe controversy in hand, namely, whether additional income can bedemanded if the addition so made still discloses a loss of income. In view of what has been recorded hereinabove, we allow theappeal, set aside the impugned order and remit the matter to the IncomeTax Appellate Tribunal, Delhi Bench “C”, Delhi,, to decide the matter afreshand in accordance with law. Parties are directed to appear before the Income Tax AppellateTribunal, Delhi Bench “C”, Delhi, on 30.01.2014. (RAJIVE BHALLA) JUDGE December 10, 2013nt (DR. BHARAT BHUSHAN PARSOON) JUDGE