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2012 Supreme(Del) 2826
DELHI HIGH COURT
S.Ravindra Bhat, R.V.Easwar, JJ.
Commissioner of Income Tax (Central-Ii) - Appellant
Versus
Income Tax Appellate Tribunal & Ors. - Resopndent
W.P. (C) No.4684/2010
Decided On : 03-08-2012
The Court clarified that the assessee could challenge the jurisdiction of the Commissioner of Income Tax in the fresh round of proceedings, and upheld the Tribunal's stay orders as part of its appellate power under the Income Tax Act, 1961.
Headnote:
Income Tax - Assessment Proceedings - Section 132(1), Section 153A, Section 143(3), Section 263 of the Income Tax Act, 1961
Fact of the Case:
The Commissioner of Income Tax filed a writ petition seeking to quash orders passed by the Income Tax Appellate Tribunal in stay applications and appeals filed by the NIIT. The assessment year in question was 1999-2000, and a search was conducted under Section 132(1) of the Income Tax Act, 1961.
Finding of the Court:
The Court dismissed the writ petition, upholding the Tribunal's stay orders and directing the Tribunal to proceed with the hearing of the appeals expeditiously.
Issues: Validity of the orders passed by the Income Tax Appellate Tribunal in stay applications and appeals filed by the NIIT, and the jurisdiction of the Commissioner of Income Tax to revise the assessment orders under Section 263 of the Income Tax Act, 1961.
Ratio Decidendi: The Court held that the Tribunal's stay orders were supported by ample authority and were part of the exercise of its appellate power under Section 254(1) of the Income Tax Act, 1961. The Court also clarified that the assessee could challenge the jurisdiction of the Commissioner of Income Tax in the fresh round of proceedings.
Final Decision: The writ petition was dismissed, and all interim orders were vacated. The Tribunal was directed to proceed with the hearing of the appeals expeditiously.
R.V. Easwar, J.
1. This writ petition under Article 226/227 of the Constitution of India has been filed by the Commissioner of Income Tax seeking the issuance of a writ of certiorari or any other appropriate writ, order or direction quashing the orders dated 21.05.2010 and 06.07.2010, both passed by the Income Tax Appellate Tribunal, Delhi Bench “F”, New Delhi (hereinafter referred to as “Tribunal”), passed in Stay Application Nos.24 to 30/Del/2010 (in ITA Nos.2057 to 2063/Del/2010) and in ITA Nos.2057 to 2063/Del/2010 respectively. These orders were passed by the Tribunal in the stay applications and in the appeals filed by the NIIT before the Tribunal. The petitioner has arrainged/arrayed the Tribunal as the first respondent and NIIT Ltd. (hereinafter referred to as the “Assessee”) as the second respondent.
2. The events leading to filing of the present writ petition are somewhat longish and we shall try to refer briefly to them. The assessee is a public limited company engaged in the business of information technology education and export of software services. We are concerned with the assessment year 1999-2000, the relevant previous year being the financial year ended on 31.03.1999 and in this year the assessee, besides the above income, derived income from export business, capital gains and income from other sources. A search was conducted under Section 132 (1) of the Income Tax Act, 1961 (hereinafter referred to as the “Act) in the office premises of the assessee and the residential premises of its Director on 10.11.2004. On 05.10.2005 the assessee filed its return for the assessment year under consideration, declaring an income of Rs. 10,11,66,660/-. An assessment order under Section 153A read with Section 143(3) of the Act was passed on 01.06.2006 determining the total income at Rs. 10,36,86,880/-, the only addition made being the disallowance of the technical know-how fees of Rs. 25,20,000/-.
3. On 23.07.2007 the CIT sought to revise the assessment order under Section 263 of the Act on the ground that it was erroneous and prejudicial to the interest of the Revenue and accordingly issued a show-cause notice to the assessee. After hearing the assessee, he passed an order under Section 263 on 19.06.2008 by which he set-aside the assessment order dated 01.06.2006 with directions to the Assessing Officer to frame the assessment afresh after affording an opportunity of being heard to the assessee and after making proper inquiries and verification. The assessee challenged the order passed by the CIT as above in W.P. (C) No.4722/2007, in which the principal contentions were that the order of the CIT was in violation of principles of natural justice, that the assessment order dated 01.06.2006 was passed after being monitored by the CIT/Central Board of Direct Taxes (CBDT), that the proceedings under Section 263 were on the instructions of the authorities superior to the CIT and that no satisfaction was arrived at by the CIT independently to the effect that the assessment order was erroneous and prejudicial to the interest of the Revenue.
4. On 15.07.2009 this Court passed an interim order in the aforesaid writ petition allowing the assessee (petitioner in the writ petition No.4722/2007) to inspect the records of the CIT. It would appear that similar proceedings under Section 263 initiated for the assessment years 2000-01 to 2005-06 which were also challenged in separate writ petitions were stayed by the Court on 06.08.2009. The Court directed the CIT to produce the records of the assessment/revisional proceedings and permitted the assessee to inspect them. As per the directions of the Court the records were shown to the representative of the assessee and its counsel on 11.08.2009.
5. On 11.12.2009, this Court passed final orders in the writ petition. The operative part of the judgment reads as under: -
“23. The upshot of the aforesaid discussion is that WP (C) No.4722/2008 is allowed and the impugned order dated 19.6.2008
