CIT Vs Rajesh Mahajan (Punjab & Haryana High Court)
The Punjab and Haryana High Court dismissed the Revenue’s appeals in CIT, Karnal v. Rajesh Mahajan and CIT, Karnal v. Sangeeta Mahajan, holding that the Income Tax Appellate Tribunal’s factual findings did not warrant interference under Section 260A of the Income-tax Act, 1961. The dispute concerned the Commissioner’s exercise of revisional jurisdiction under Section 263 on the allegation that the Assessing Officer had mechanically accepted the assessees’ returns without adequate scrutiny. The appeals had earlier been decided on 1 February 2011 without an opportunity of hearing to the assessees. On 31 October 2011, the Supreme Court set aside that judgment in Civil Appeal Nos. 8955–8956 of 2011 and remitted the matter for fresh consideration. It emphasised the need for reasoned findings when the High Court overturns an ITAT decision, while expressing no view on the merits.
On remand, the Revenue argued that the Assessing Officer had not independently verified the cash available at the time of search. The assessees submitted that questionnaires and supporting evidence had been considered in respect of cash found at the Panipat and Delhi residences, unsecured loans and fresh investments. The High Court noted the ITAT’s findings that the relevant documents and enquiries appeared in the paper book, including pages 130–150 and 151–154. The High Court held that an assessment order need not detail every enquiry conducted by the Assessing Officer. Its brevity, even if confined to a single page, does not by itself establish error where the record shows that the officer sought explanations and examined evidence. The two requirements for revision under Section 263—an erroneous order and prejudice to the Revenue—were not established. As no substantial question of law arose, both appeals were dismissed and pending applications disposed of.
FULL TEXT OF THE JUDGMENT/ORDER OF PUNJAB AND HARYANA HIGH COURT
The present appeals have com up before this Court after the order dated 3 1.10.2011 passed by the Hon’bl e Supreme Court in Civil Appe l No.8955-895 6 of 2011, wherein the apex Court has held as under:-
“We are of the view that, in this case, detailed reasons ere required to be given by the division Bench of the High ourt, particularly when, by the i pugned judgement, the High ourt has overruled the decision o ITAT. Since statutory appeallies to the High Court under Section 260A of the Act, the High ourt ought to have given it’s findings in detail, particularly on the question whether there was an error of law in the decision ITAT and whether that error caused prejudice to the Revenue. In any event, this Court is of the view that, on the facts and circumstances of this case, since the appellant (assessee) was ot heard, indulgence is being shown to him to appear before the High Court on the appointed date and argue the matter. For this reason alone, we set aside the impugned judgement of the igh Court and remit the case for de novo consideration in ccordance with law. We do not wish to express any opinion on the merits of the case. The impugn d judgement is set aside only n the ground that an opportunity needs to be given to the ppellant (assessee) to argue his c se before the High Court.
The civil appeals are, acc rdingly, allowed.”
2. It is noticed that earlier the present Appeals were decided by this Court on 0 1.02.2011 without giving opportunity of hearing to the respondent(s) and the Division Bench held mechanically any materia proceedings.
3. Learned counsel for the appellant/Revenue has again asserted its submissions Income Tax Act of 1961” Officer dated passed by th various block periods was liable to be set asid
4. on the other hand, learne respondent(s)/assessee(s) submits that before order, a questionnaire was put to him with explain the s ource of cash found during the course of search and seizure. A detailed enquiry was conducted by the Asse ssing Officer before reaching to conclusionsa don four issues i.e. (a) cas found at the premises of th e assessee at P nipat House; (b) cash found at elhi House; (c) unsecured loan ;
and (d) fres h investment, the respondent( s)/assessee(s) had submitted is details and it is thereafter the Assessing Officer passed an order of assessmen .
5. Learned counsel for the appellant/Revenue has, however, pointe out that ev en after the explanations h aving been submitted by th e respondent(s) , the issue regarding availability of cash with the respondent( ) as on the dat e of search remained to be examined and the Assessing Offic r ought to have made its own enquiries with re ard to the same.
6. We have carefully examined the order passed by the ITA . Finding of th e fact has been arrived at by the ITAT that the queries were raised by the Assessing Officer and supporti g evidence was produced by the respondent(s) regarding the cash found at anipat House and Delhi House which is on r cord at particular Pages as men ioned in the ITAT order (namely Pages 130 to 150 and Pages 151 to 154) of the paper book.
7. We are of the considered view that in the final order passed by the Assessing Officer, he need not mention about the detailed enquiry which he has conducted and merely because the A one page ord r, imposing the required tax to required, or reaches to a conclusion that no payment is required to be mad , the entire en quiry proceedings can be seen from the paper-book since, th e ITAT has ex mined the paper-book and found that queries were raised by th e Assessing Oficer and after due enquiry an d after examining the necessary evidence, the is not errone examining theregarding investing assessment order has been pass us, cannot be again re-examine factual aspects again.
8. The question before this Court would only arise to the aspect regarding invoking of power qua non for invoking powers under Section 263 of the Act of 1961 are (i) the Assessing Officer has passed the order erroneously; resulted in causing loss of revenue and against the interest of the Revenue. both the counts, we find that the order of the Assessing Officer was not required to be interfered with as has been already found by the ITAT. s under Section 263 of t the Act of 1961.The that and (ii) sine hatthe order has On required to be interfered with as has been already found by the ITAT.
9. No substantial question of law Appeals. Accordingly, these appeals are arises for examination dismissed in dismissed.
10. All pending applications filed in these Appeals shall stand
