CIT Vs Jain Uday Fabrics Pvt. Ltd (Punjab and Haryana High Court)
The appeal arose from an assessment where the Assessing Officer (AO) initially passed an order dated 24.12.2007 under Section 145(3) of the Income Tax Act, 1961, rejecting the assessee’s books of account in the assessee’s absence. The assessee filed an application under Section 144A before the Joint Commissioner, who, by order dated 28.12.2007, directed the AO to complete the assessment on the basis of the books of account at the returned income. The AO thereafter passed a fresh assessment order dated 31.12.2007, making additions of ₹1,55,25,300.87. Subsequently, the Commissioner of Income Tax exercised revisional jurisdiction under Section 263 and set aside the AO’s order on 29.03.2010. The Income Tax Appellate Tribunal, by order dated 22.10.2010, set aside the Commissioner’s order and upheld the AO’s assessment, relying on Malabar Industrial Company Limited v. Commissioner of Income Tax, Kerala State (2000) 243 ITR 83.
The Revenue contended that the Joint Commissioner ought not to have directed the AO to pass the assessment in a particular manner under Section 144A, that the AO should have independently examined the case, that the books of account were never produced before the Joint Commissioner, and that the order under Section 144A was laconic and defective. It was further argued that the ITAT wrongly interfered with the Commissioner’s order under Section 263.
