Calcutta High Court
Principal Commissioner Of Income Tax 1 ... vs Fateh Chand Chindalia on 22 January, 2024
Author: Hiranmay Bhattacharyya
Bench: T.S. Sivagnanam, Hiranmay Bhattacharyya
O-51
IN THE HIGH COURT AT CALCUTTA
SPECIAL JURISDICTION (INCOME TAX)
ORIGINAL SIDE
ITAT/252/2023
IA NO: GA/2/2023
PRINCIPAL COMMISSIONER OF INCOME TAX 1 KOLKATA
VS
FATEH CHAND CHINDALIA
BEFORE :
THE HON'BLE THE CHIEF JUSTICE T.S. SIVAGNANAM
And
THE HON'BLE JUSTICE HIRANMAY BHATTACHARYYA
Date : 22nd January, 2024
Appearance :
Mr. Vipul Kundalia, Sr. Adv.
Mr. Soumen Bhattacharjee, Adv.
Ms. Oindrila Ghosal, Adv.
...for appellant
Mr. S.M. Surana, Sr. Adv.
...for respondent
The Court:- This appeal by the revenue filed under section 260A of the
Income Tax Act [the Act] is directed against the order dated 16.3.2023 passed
by the Income Tax Appellate Tribunal "A" Bench, Kolkata [Tribunal] in ITA
No.185/Kol/2022 for the assessment year 2011-12.
The revenue has raised the following substantial questions of law for
consideration.
[I] Whether the learned Tribunal has committed substantial error in
law by observing that the Assessing Officer has examined the
particular source of investments and the assessee has fully
explained the said source of investments ?
[II] Whether the learned Tribunal has committed substantial error in
law in quashing the order under Section 263 of the said Act ignoring
the fact that the Assessing Officer in his order under Section 143[3]
read with Section 147 dated 28.12.2018 concluded that the source
of investment is made out of accumulated Bank balance of the
assessee, whereas as per records the said accumulated Bank
balance has come from sale of penny share M/s. Tuni Textiles Ltd.
After elaborate hearing of the learned Advocates for the parties and
carefully perusing the materials placed on record, we find that the learned
Tribunal was fully justified in following the decision of the Hon'ble Supreme
Court in the case of Commissioner of Income Tax, Chennai vs. M/s. Alagendran
Finance Ltd., [2007] 293 ITR 1 [SC]. In paragraph 15 of the judgment, it has
been held as follows.
" We, therefore, are clearly of the opinion that keeping in view the facts
and circumstances of this case and, in particular, having regard to the fact
that the Commissioner of Income Tax exercising its revisional jurisdiction
reopened the order of assessment only in relation to lease equalization
fund which being not the subject of the reassessment proceedings, the
period of limitation provided for under sub-section [2] of Section 263 of the
Act would begin to run from the date of the order of assessment and not
from the order of reassessment. The revisional jurisdiction having, thus,
been invoked by the Commissioner of Income Tax beyond the period of
limitation, it was wholly without jurisdiction rendering the entire
proceeding a nullity."
The Tribunal examined the facts of the case and found that the doctrine of
merger did not apply and the period of limitation would commence from the date
of original assessment and not from the reassessment since the latter had not
anything to do with the said item of income.
Thus, we find there is no error in the order passed by the Tribunal.
Accordingly, the appeal is dismissed and the questions of law are
answered against the revenue.
(T.S. SIVAGNANAM)
CHIEF JUSTICE
(HIRANMAY BHATTACHARYYA, J.)
Pkd/GH.
