Principal Commissioner Of Income Tax 13 ... vs Champalal Omprakash
2025 Latest Caselaw 1126 Cal/2

Calcutta High Court

Principal Commissioner Of Income Tax 13 ... vs Champalal Omprakash on 5 February, 2025

Author: T.S Sivagnanam

Bench: T.S Sivagnanam

od 6
                         IN THE HIGH COURT AT CALCUTTA
                        SPECIAL JURISDICTION (INCOME TAX)
                                  ORIGINAL SIDE

                              ITAT/5/2025
                      IA NO: GA/1/2025, GA/2/2025
          PRINCIPAL COMMISSIONER OF INCOME TAX 13 KOLKATA
                                   VS
                         CHAMPALAL OMPRAKASH


BEFORE :
THE HON'BLE THE CHIEF JUSTICE T.S SIVAGNANAM
             -A N D-
HON'BLE JUSTICE BIVAS PATTANAYAK
DATE : February 05, 2025.
                                                                          Appearance :
                                                                       Mr. Aryak Dutt, Adv.
                                                            Mr. Soumen Bhattacharjee, Adv.
                                                                             ...for appellant
                                                                   Mr. J P Khaitan, Sr. Adv.
                                                                   Mr. Akhilesh Gupta, Adv.
                                                                    Mrs. Swapna Das, Adv.
                                                                            Mr. S. Das, Adv.
                                                                           ...for respondent

The Court :- We have heard learned Counsel on behalf of either sides.

This appeal has been filed by the revenue under Section 260A of the Income

Tax Act, 1961 challenging the order dated 15.01.2024 passed by the learned Income

Tax Appellate Tribunal "B" Bench (The Tribunal) in ITA/1169/Kol/2019 for the

asessment year 2011-2012. The revenue has raised the following substantial

questions of law for consideration :-

"1. Whether the learned Tribunal has committed substantial error in law by

allowing appeal in view of finding of Hon'ble Madras High Court's Judgement, in

M/s. Home Finders Housing Limited vs. The Income Tax Officer [W.A. No.463 of

2017], that non-compliance of procedure indicated in GKN Driveshafts [India]

Ltd. [2002] 125 Taxmann 963 [SC]?

2. Whether the learned Tribunal has committed substantial error in law by

allowing the appeal of the assessee, quashing the assessment order u/s

147/143[3] of the Income Tax Act, 1961 dated 29.12.2017, by deleting the

addition of Rs.4,13,29,247/- made by AO only for not disposing off the

objections raised by the assessee to the reason recorded for reopening of the

case, before completion of the assessment ?

3. Whether the learned Tribunal has committed substantial error in law by not

going into the merit of the case, more so in the light of judgment of Hon'ble

High Court at Calcutta in the case, Principal Commissioner of Income Tax -5,

Kolkata versus Swati Bajaj reported in the year of 2022 where it was observed

that the assessee has failed to discharge legal obligations to prove the

genuineness of the transaction and creditworthiness of the transaction ?"

There is a delay of 191 days in filing the appeal. As the explanation offered for

the delay is acceptable, the application is allowed and the delay is condoned.

The revenue is aggrieved by a common order passed by the learned Tribunal in

the appeals filed by the assessee as well as the department against the order passed

by the Commissioner of Income Tax - 13(Appeals) Kolkata, CIT(A) dated 19th March,

2019 by which the CIT(A) affirmed the assessment order dated 29.12.2017. Though

several issues were raised before the learned Tribunal the first issue is taken up for

consideration by the learned Tribunal was whether the assessing officer was right in

not disposing of the written objection submitted by the assessee for reopening of the

assessment. In fact, this ground was canvassed by the assessee before the CIT(A)

which call for a remand report but unfortunately the assessing officer did not submit

the remand report and the CIT(A) proceeded to take a decision on merits and

particularly allowed the appeal of the assessee but with regard to the percentage of the

gross profit rate on the entire turnover and made a restriction thereof. The learned

Tribunal, in our view, rightly took note of the decision of the Hon'ble Court in GKN

Driveshafts [India] Ltd. vs. ITO [2003] 259 ITR 19 [SC]. The duty cast upon the

assessing officer is to decide the written objections given by the assessee to the

proposed reopening and passing a speaking order and if the order goes against the

assessee, the assesee has a liberty to challenge the order by filing a writ petition as no

other alternative remedy is provided under the provisions of the Income Tax Act, 1961.

In the instant case, it is not in dispute that the assessing officer did not follow the

procedure laid down by the Hon'ble Court in GKN Driveshafts [India] Ltd. [supra].

Therefore, the learned Tribunal was justified in allowing the assessee's appeal on the

said ground. Thus, we find no ground to interfere with the impugned order.

Accordingly, the appeal filed by the revenue is dismissed and the substantial question

of law No. 1 is decided against the revenue and in favour of the assessee.

Consequently, the three substantial questions of law are left open. The application is

also dismissed.

(T.S. SIVAGNANAM) CHIEF JUSTICE

(BIVAS PATTANAYAK, J.)

pkd/GH.