Assessee can raise contention before ITAT without filing cross-objections on issues related to question of law: HC

Case details: Peter Vaz v. CIT - [2021] 128 taxmann.com 180 (Bombay)

Judiciary and Counsel Details

• • M.S. Sonak and Smt. M.S. Jawalkar, JJ.
  • P. Pardiwala, Sr. Adv. J. Sanghavi and H.D. Naik, Advs. for the Appellant
  • Ms. S. Linhares, Standing Counsel for the Respondent

Facts of the Case

Assessees were partners holding 50 percent stake respectively in a partnership firm. Pursuant to search, assessees responded to notices under section 153C and submitted that returns originally filed by them under section 139(1) may be treated as returns in response to notices under section 153C.

Assessing Officer (AO) made additions to income of assessee which was challenged by assessee before the Commissioner (Appeals). The CIT(A) allowed appeals of assessee. Thereafter, revenue instituted appeals before Tribunal. During pendency of appeals, assessees requested AO to furnish them a copy of ‘satisfaction’ for issuance of notice under section 153C. He also contended that in the absence of satisfaction, no action in terms of section 153C was competent.

However, the Tribunal prevented assessees from raising this jurisdictional issue inter alia on ground that there was a necessity of filing cross-objections expressly raising such a jurisdictional issue. Assessees filed cross-objections before the Tribunal accompanied by an application seeking condonation of delay of 248 days in filing cross-objections.
Tribunal allowed appeals filed by revenue but dismissed cross-objections filed by assessees by refusing to condone delay of 248 days in filing of same. Aggrieved-assessee filed the instant appeal before the Bombay High Court.

High Court Held

The Bombay High Court held that the Tribunal should not have stopped assessee from raising issue in appeals instituted by revenue without necessity of filing any cross objections when it came to conclusion that issues raised in cross-objection were legal issues.

Tribunal had not focused on issue of whether there was sufficient cause for explaining 248 days delay in instituting cross-objections but rather had faulted assessees for not raising the issue of non-compliance with jurisdictional parameters. These were not relevant considerations at stage of deciding whether sufficient cause was shown to explain 248 days delay in instituting cross-objections.

Therefore, the matter was to be remanded to Tribunal for fresh consideration of appeals instituted by revenue after permitting assessees to raise issue of non-compliance within jurisdictional parameters of section 153C.

Case Review

• • Order of ITAT dated 2-12-2016 (para 52) set aside.

List of Case Referred to

• • B.R. Bamasi v. CIT [1972] 83 ITR 223 (Bom.) (para 17)
  • CIT v. Edward Keventer Sucessors (P.) Ltd . [1980] 123 ITR 200 (Delhi) (para 17)
  • National Thermal Power Co. Ltd. v. CIT [1998] 97 Taxman358/229 ITR 383 (SC) (para 17)
  • CST v. Sarjoo Prasad Ram Kumar [1976] 37 STC 533 (SC) (para 17)
  • Mavany Brothers v. CIT [2015] 62 taxmann.com 50 (Bom.) (para 17)
  • DIT (International Taxation) v. Ingram Micro India Exports (P.) Ltd . [2015] 60 taxmann.com 57/234 Taxman 464 (Bom.) (para 17)
  • Dahod Shakari Kharid Vechan Sangh Ltd. v. CIT [2005] 149 Taxman 456/[2006] 282 ITR 321 (Guj.) (para 18)
  • S. Nazeer Ahmed v. State Bank of Mysore [2007] 11 SCL 75 (para 18)
  • Indian Bank v. Manilal Govindji Khona [2015] 56 taxmann.com 133/130 SCL 311 (SC)(para 19)
  • Collector Land Acquistion v. MST. Katiji 1987 taxmann.com 1072 (SC) (para 19)
  • Rathna Stores (P.) Ltd. v. CIT [2020] 120 taxmann.com 260/274 Taxman 489 (Mad.) (para 19)
  • CIT v. Vijaybhai N. Chandrani [2013] 35 taxmann.com 580/217 Taxman 138/357 ITR 713 (SC) (para 20)
  • Municipal Commissioner v. Sahil Kumar Banerjee [2004] 4 SCC 108 (para 20)
  • CIT v. Ng Technologies Ltd. [2015] 57 taxmann.com 389/370 ITR 7 (Delhi) (para 20)
  • N. Balakrishnan v. M. Krishnamurthy [1998] 7 SCC 123 (para 40).