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U.P. Forest Corporation And Others Versus Commissioner of Income Tax And Another

2015 (8) TMI 1100 - ALLAHABAD HIGH COURT

Revision u/s 263 - Assessment Officer has not complied with the directions given by the Tribunal in its judgment & order - ITAT upholding order passed under section 263 by CIT(A) - Held that:- Tribunal had remanded the case to the Assessment Officer for statistical purposes. Therefore, it was mandatory for Assessment Officer to examine the statements furnished by Assessee and to verify it with account books in the light of provisions of Section 11 of Income-tax Act, 1961. It is, therefore, appar .....

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t Officer has failed to discharge his legal obligation to ascertain truth of statement furnished by the Assessee by means of verification with account books. The Commissioner has rightly held that assessment order is erroneous and prejudicial to the interest of revenue. There is no illegality or infirmity in the impugned order passed by the Commissioner in exercise of power conferred by Section 263 of Income-tax Act, 1961. Commissioner has rightly vide impugned order remanded the case to the Ass .....

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ssee U. P. Forest Corporation, 21/475, Indira Nagar, Lucknow under section 260-A of Income Tax Act, 1961 against the common judgment & order dated 27.8.2013, passed by the Income Tax Appellate Tribunal, Lucknow Bench, Lucknow in five Income Tax Appeals i.e. I.T.A. No. 258/Luc/2012 to I.T.A. No. 262, Lucknow/2012, U.P. Forest Corporation vs. Commissioner of Income Tax-1, Ayakar Bhawan, Lucknow whereby the learned Tribunal has dismissed the said appeals arising out of five separate orders, pas .....

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so the same, the above appeals are being decided by a common judgment. Parties have filed their Written Statements which have been taken on record. In all the above appeals following substantial questions of law have been raised by the Appellant-Assessee for determination: (I) Whether the Tribunal has committed substantial illegality by not considering ratio of the cases referred by the appellant during the course of hearing as mentioned in para 39 and 40 of present appeal? (II) Whether under th .....

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nsel for the respondents. Learned counsel for the Assessee-Appellant contended that assessment order has been passed by the Assessment Officer for each relevant year in compliance of judgment & order dated 30.1.2009, passed by Income-tax Appellate Tribunal in ITA No. 302/lucknow/2012 and other connected appeals relating to relevant assessment years. As such, Commissioner of Income-tax was not competent to set aside assessment order passed in compliance of order of the Tribunal. Learned couns .....

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ncome-tax Commissioner under section 263 of the Income-tax Act is illegal and without jurisdiction and the Tribunal has committed illegality of substantial nature in upholding impugned orders of Commissioner. Learned counsel for Assessee-Appellant contended that following judicial pronouncements rendered by Hon'ble Apex Court as well as by Hon'ble High Court, Allahabad were referred and placed before the Tribunal but the Tribunal did not follow ratio of decisions referred: 1. Bhopal Suga .....

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f Income Tax, U.P. reported in (1978) 111 ITR page 326, 7. Commissioner of Income Tax vs. Kashi Nath & Co., reported in (1988) 170 ITR page 28 8. Commissioner of Income Tax vs. Mahendra Kumar Bansal, reported in (2008) 297 ITR page 99 Learned counsel for the Income-tax Department contended that the Assessment Officer has not complied with the directions given by the Tribunal in its judgment & order dated 30.1.2009. He has not examined the statistical details in view of section 11 of Inco .....

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s for the relevant years have been passed by the Assessment Officer in compliance of the judgment & order dated 30.1.2009, passed by the Income Tax Appellate Tribunal (hereinafter referred to as 'Tribunal') in Income-tax Appeal No. 302/Lucknow/2001/U.P. Forest Corporation vs. Addl. CIT, Special Range, Lucknow alongwith other connected appeals relating to the relevant years. Paras 52 and 54 of the judgment and order of the Tribunal are relevant to be extracted here: " 52. Regardi .....

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927/Luc/02, 301/Luc/01, 556/Luc/02, 764/Luc/04 and C.O. No. 11/Luc/2000 are partly allowed for statistical purposes. All the Departmental Appeals in I.T.A. No. 280/Luc/01, 535/Alld/98, 279/Luc/01 and 662/Luc/02 are allowed for statistical purposes while I.T.A. No. 800/Luc/04 is partly allowed for statistical purposes." Section 11 (1) of the Income-tax Act, 1961 reads as follows: "11. (1) Subject to the provisions of sections 60 to 63, the following income shall not be included in the .....

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roperty held under trust in part only for such purposes, the trust having been created before the commencement of this Act, to the extent to which such income is applied to such purposes in India; and, where any such income is finally set apart for income so set apart is not in excess of (fifteen) per cent of the income from such property; (C) income (derived) from property held under trust- (I) created on or after the 1st day of April, 1952, for a charitable purpose which tends to promote inter .....

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y contributions made with a specific direction that they shall form part of the corpus of the trust or institution. (Explanation- For the purposes of clauses (a) and (b)- (1) in computing the (fifteen) per cent of the income which may be accumulated or set apart, any such voluntary contributions as are referred to in Section 12 shall be deemed to be part of the income;" Para 2 of the Assessment Order passed by the Assessment Officer in compliance of judgment & order dated 30.1.2009, pas .....

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ions, exemption claimed by the assessee under section 11 is allowed and the returned income is accepted." Section 263 of the Income Tax Act, 1961 reads as under: "263. (1) The [Principal Commissioner or ] Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the [Assessing] Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity .....

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o furnish documents and written submission in support of his claim and has fixed date 23.12.2009 for the said purpose. Admittedly, said notice was served on assessee on 23.12.2009 and assessee appellant filed reply of said notice on 29.12.2009 (Annexure No. 8 to the Memo of Appeal) in which he submitted detailed statements for computation of income with reference to Section 11 of the Income-tax Act but simultaneously submitted that Sri Vinod, Accounts Officer who is conversant with the facts and .....

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self that the statement furnished by the Assessee has been verified with account books. As mentioned above, Tribunal had remanded the case to the Assessment Officer for statistical purposes. Therefore, it was mandatory for Assessment Officer to examine the statements furnished by Assessee and to verify it with account books in the light of provisions of Section 11 of Income-tax Act, 1961. It is, therefore, apparent that Assessment Officer has not complied with the directions of the Tribunal cont .....

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375 Delhi High Court has held as under: "The Income-tax Officer is not only an adjudicator but also an investigator. He cannot remain passive in the face of a return which is apparently in order but calls for further enquiry. It is his duty to ascertain the truth of the facts stated in the return when the circumstances of the case are such as to provoke an inquiry." In this case Delhi High Court has further held that "the word 'erroneous' in section 263 includes the failur .....

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gality or infirmity in the impugned order passed by the Commissioner in exercise of power conferred by Section 263 of Income-tax Act, 1961. Commissioner has rightly vide impugned order remanded the case to the Assessment Officer to pass a fresh order in accordance with law in terms of remand order dated 30.1.2009, passed by the Tribunal in appeal. In the case of Bhopal Sugar Industries Ltd. vs. Income-tax Officer (supra) Hon'ble Apex Court as well as in the case of Commissioner of Income-tax .....

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ourt, Allahabad has held as under: "We are of the considered opinion that merely because the Income-tax Officer had not written lengthy order, it would not establish that the assessment order passed under section 143 (3)/148 of the Act is erroneous and prejudicial to the interests of the Revenue without bringing on record specific instances,..." In the case of Commissioner of Income-tax vs. Max India Ltd. (supra) Hon'ble Apex Court has held as under: "Every loss of revenue as .....

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is unsustainable in law...." In the case of Commissioner of Income Tax vs. Goyal Private Family Specific Trust (supra) Hon'ble High Court, Allahabad has held as follows: " The orders of the Income Tax Officer may be brief and cryptic, but that by itself is not sufficient reason to brand the assessment orders as erroneous and prejudicial to the interest of the Revenue. Writing an order in detail may be a legal requirement, but the order not fulfiling this requirement cannot be said .....

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, of the opinion that without going into the merits of the claim of the assessee, it was not possible for the Commissioner to say that the order of the Income Tax Officer had caused any prejudice to the interests of the revenue and, as such, he was not competent to set aside the assessment order and remand the matter to the Income -tax Officer." In the case of Commissioner of Income Tax vs. Kashi Nath & Co. (Supra), the Division Bench of this Court has held that "the power of the C .....

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m) wherein Bombay High Court has observed as under: "....if a query is raised during the assessment proceedings and responded to by the assessee, the mere fact that it is not dealt with in the assessment order would not lead to a conclusion that no mind had been applied to it." Ratio laid down in above pronouncements, are not helpful to assessee-appellant on the facts and circumstances of the case, as in present case the Assessment Officer has not complied with direction of the Tribuna .....

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x and another, reported in (2010) 324, ITR, 381; (3) Commissioner of Income-tax vs. Palghat Shadi Mahal Trust reported in (1995) 212, ITR, page 287; (4) Addl. Commissioner of Income-tax and another vs. A.L.N. Rao Charitable Trust, reported in (1995) 216 ITR page 697; (5) Commissioner of Income-tax vs. Gabriel India Ltd., reported in (1993) 203 ITR,page 108. (6) Commissioner of Income-tax vs. Vikas Polimers, reported in (2012) 341 ITR page 537 (7) Commissioner of Income-tax vs. DLF Ltd. Reported .....

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