PCIT (Central)-2 Vs S.S. Con Build Pvt. Ltd. (Delhi High Court)
Summary: Delhi High Court dismissed the Revenue’s appeal against the ITAT order dated 18 February 2021 in ITA No. 6447/Del/2015 for AY 2006-07, thereby sustaining deletion of the Rs.7 crore addition made under Section 68 of the Income Tax Act. The Revenue contended that the ITAT had wrongly relied upon CIT vs Kabul Chawla, [2016] 380 ITR 573 to delete the addition on the jurisdictional issue under Section 153A without examining the facts and merits of the addition. It was also argued that in the first round of litigation the matter had been remanded to the Assessing Officer for fresh adjudication on merits and the jurisdictional issue had not been decided.
The High Court, however, recorded that the case was admittedly covered by CIT vs Kabul Chawla because the additions were not based on seized material. The Court further held that an issue concerning jurisdiction goes to the root of the matter and can be raised even at a belated stage of the proceedings, including in appeal, referring to Kanwar Singh Saini vs High Court of Delhi, (2012) 4 SCC 307 and M/s Mavany Brothers vs. CIT, 2015 SCC Online Bom 1686. Finding that no substantial question of law arose for consideration, the Delhi High Court dismissed the Revenue’s appeal.
Read SC Judgment in this case: SC Dismisses Revenue SLP on Section 153A Addition Without Incriminating Material
Cases Discussed
- CIT vs Kabul Chawla, [2016] 380 ITR 573— Followed. The High Court recorded that the present case was admittedly covered by this decision since the additions were not based on seized material.
- Kanwar Singh Saini vs High Court of Delhi (Supreme Court), (2012) 4 SCC 307 — Relied upon for the settled principle that an issue of jurisdiction goes to the root of the cause and can be raised even at a belated stage of proceedings, including in appeal.
- M/s Mavany Brothers vs. CIT (Bombay High Court), 2015 SCC Online Bom 1686 — Relied upon for the proposition that a jurisdictional issue can be raised at a belated stage, including in appellate proceedings.
FULL TEXT OF THE JUDGMENT/ORDER OF DELHI HIGH COURT
Present appeal has been filed challenging the order dated 18th February, 2021 passed by Income Tax Appellate Tribunal [ITAT] in ITA No. 6447/Del/2015 for the Assessment Year 2006-07.
2. Learned counsel for the Appellant states that ITAT has erred in deleting the addition of Rs.7,00,00,000/- made by the Assessing Officer under Section 68 of Income Tax Act, 1961 (for short ‘the Act’) relying upon the judgment of this Court in CIT vs Kabul Chawla, [2016] 380 ITR 573. He states that ITAT has further erred in deleting the addition on the issue of jurisdiction under Section 153A of the Act without adverting to the facts and merits of the addition.
3. He emphasises that ITAT was not justified in law in not appreciating the fact that in the first round the case was remanded back to the Assessing Officer for fresh adjudication on merits of the addition. He further states that ITAT has erred in not considering that in the first round of litigation the issue of jurisdiction was not decided and the additions were decided/remanded back on merits of the addition.
4. Admittedly, the present case is covered by the decision of the Division Bench in CIT vs Kabul Chawla (supra), as the additions were not based on the seized material.
5. Further, it is settled law that the issue of jurisdiction goes to the roots of the cause and such an issue can be raised at any belated stage of the proceeding including appeal. (See: Kanwar Singh Saini vs High Court of Delhi, (2012) 4 SCC 307 and M/s Mavany Brothers vs. CIT, 2015 SCC Online Bom 1686.)
6. Consequently, this Court is of the view that no substantial question of law arises for consideration in the present appeal. Accordingly, the present appeal is dismissed.
