The division bench of Himachal Pradesh High Court yesterday dismissed Income Tax Appeal filed by Himachal Chief Minister Virbhadra Singh against the order passed by the Income Tax Appellate Tribunal, calling for a fresh assessment pertaining to the 2009-2010 financial year.
The appellant-assessee, the Chief Minister of Himachal Pradesh had filed returns for the years 2009-10 to 2011-12 by conceding total income of Rs 44,67,584 along with agricultural income of Rs 15 lakhs. In the year 2012, the assessee filed a revised return in which the agricultural income was shown as 2.8 crores. Against the return, the assessment was completed on 2013, which were rejected by the CIT by invoking revisional jurisdiction u/s. 263 and held that the assessment order was erroneous and prejudicial to the interests of the revenue, on the ground that the revision of return was wrongly accepted, accounting principles were wrongly considered and accepted in as much as the agricultural income was not declared on the basis of mercantile system of accounting.
The division bench comprising of Acting Chief Justice Sanjay Karol and Justice Sandeep Sharma upheld the ITAT order and observed that, “in the given facts and circumstances, we hold the Tribunal to have correctly affirmed the order passed by the Commissioner. Also, it cannot be said that the Tribunal erred in accepting the additional evidence placed on record by the Revenue. It also cannot be said that the Tribunal committed any material irregularity and violated any procedure and such action is illegal or bad in law. In fact, we find principles of natural justice and fair play to have been adhered to and fully complied with”.
While dismissing the appeal, the Court also reiterated the sub-section (1) of Section 263 confers sufficient powers upon the Commissioner to decide all issues of law, after recording its satisfaction that the order passed by the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. The power is wide enough to take in its sweep the action of modifying, cancelling or directing fresh assessment, particularly when it is a case of “no inquiry”.
The Court also observed that, “We are of the considered view that no inquiry, as envisaged in law, was carried out, hence, question of the Commissioner taking an alternate possible view does not arise. The Assessing Officer cannot be said to have taken a plausible view, as envisaged in law, and the view taken by the Commissioner to be an alternative one. Finding of the Commissioner that the order is erroneous is not on account of his mere disagreement with the view taken by the Assessing Officer. Any inquiry, without application of mind, is nonest”.
Read the full text of the Judgment below.
