Bombay High Court
Commissioner Of Income Tax vs Dhanraj Harichand Khandelwal Amt on 7 September, 2017
Bench: Ravi K. Deshpande
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IN THE HIGH COURT OF JUDICATURE AT BOMBAY
NAGPUR BENCH : NAGPUR.
INCOME TAX APPEAL NO. 90
OF 20
04
APPELLANT: The Commissioner of Income Tax-III,
2nd Floor Saraf Chambers, Sadar,
Nagpur.
-VERSUS-
RESPONDENT: Shri Dhanraj Harichand Khandelwal,
Amravati.
Shri. Bhushan Mohta with Shri Anand Parchure, Advocates
for Appellant.
Shri. C.J. Thakkar, Advocate for Respondent.
CORAM: R.K.DESHPANDE & MANISH PITALE, JJ
DATED:
7 SEPTEMBER
th
, 201
7
.
Oral Judgment (Per R.K.Deshpande, J)
1. The Commissioner of Income Tax, exercising his
jurisdiction under Section 263 of the Income Tax Act, 1961,
(for short "the said Act") passed an order on 28/03/2003,
whereby the order passed by the Assessing Officer on
28/02/2001, was held to be erroneous and prejudicial to the
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interest of Revenue and thus, the order regarding Block
Assessment has been set aside with a direction to the
Assessing Officer to make proper inquiry into the genuineness
of the sub-contract.
2. The aforesaid order was the subject matter of
appeal before the Income Tax Appellate Tribunal, at Nagpur
which has been allowed by an order dated 30/01/2004,
setting aside the order passed by the Commissioner of Income
Tax under Section 263 of the said Act. The Tribunal records
the finding that the order passed by the Assessing Officer
cannot be said to be erroneous and prejudicial to the interest
of the Department and therefore sets aside the order of the
Commissioner of Income Tax.
3. On 22/03/2007 this Court has passed order as
under :-
" Heard Shri Jaiswal, learned counsel
for the appellant.
Admit, on the following question:-
"Where the Income-tax Appellate
Tribunal was justified in setting aside
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the order passed by C.I.T. under
Section 263 of the Income-tax Act even
though the Assessing Officer in the
block assessment had failed to consider
the vital evidence in the form of
recovery of the Bank Account books,
cheque book from the possession of
assessee duly signed by the sub-
contractors together with the
statement of sub-contractor which was
noticed during the course of search?"
We have heard Shri Mohta, the learned counsel for
the Department; and Shri C.J. Thakkar, learned counsel for
the Assessee.
4. We have gone through the order passed by the
Income Tax Appellate Tribunal. What we find is that in the
facts and circumstances of this case, before recording the
finding that the order passed by the Assessing Officer cannot
be said to be erroneous as contemplated under Section 263 of
the Income Tax Act, the Tribunal ought to have recorded the
finding as to whether it is the case of "lack of inquiry" or an
"inadequate inquiry", on the issue as to genuineness of the
sub-contract in question. None of the counsels could point out
to us any such finding recorded by the Tribunal in its order.
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In our view the recording of finding as to the lack of inquiry
or inadequate inquiry became sine qua non in the facts and
circumstances of this case for holding that the order is
erroneous. In the absence of such finding by the Tribunal, it is
not possible for us to consider the substantial question of law,
which was framed by this Court on 22/03/2007. We are,
therefore, left with no alternative but to set aside the order
passed by the Tribunal with an order of remand.
5. The learned counsels appearing for the parties also
agree for the remand of the matter back to the Tribunal and
to leave all questions open to be adjudicated by the Tribunal,
after recording the finding as to whether it is the case of "lack
of inquiry" or "inadequate inquiry".
In view of the above, the petition is allowed and
the following order is passed:-
ORDER
1) The order dated 30/01/2004 passed by the
Income Tax Appellate Tribunal, Nagpur in appeal No. IT(SS)
A No.45/Nag/2003 is hereby quashed and set aside.
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2) The matter is remitted back to the Tribunal to
decide it afresh, keeping in view the observations made by
this Court. We have not recorded any finding on the merits of
the matter, and all questions are required to be decided by
the Tribunal.
JUDGE JUDGE
nandurkar
