2010 (2) TMI 386 - HC - Income Tax

Revision- Power- Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was right in law in holding that the order passed under section 263 by the Commissioner of Income-tax, Rohtak was only a change of opinion and consequently did not meet the requirements of the provisions for invoking his powers under section 263 of the Income-tax Act? Held that- the Tribunal was right in holding that the conclusion drawn by the Commissioner was not based on facts. the order of revision was not valid.

Summary

Issues:
Challenge under section 260A of the Income-tax Act, 1961 regarding the order passed by the Income-tax Appellate Tribunal for the assessment year 2000-01. Question of law regarding the order under section 263 by the Commissioner of Income-tax, Rohtak and its compliance with the provisions of the Income-tax Act.

Analysis:
The appellant, the Revenue, challenged the order of the Income-tax Appellate Tribunal for the assessment year 2000-01 under section 260A of the Income-tax Act, 1961. The main question raised was whether the Tribunal was correct in holding that the order passed by the Commissioner of Income-tax, Rohtak under section 263 was merely a change of opinion and did not meet the requirements for invoking powers under section 263 of the Income-tax Act.

The facts of the case revealed that the assessee was running a proprietary business named M/s. Saini Traders, dealing in agricultural implements. The assessment for the year 2000-01 was reopened based on information received from the Income-tax Department. The assessing authority framed the assessment under section 143(3) read with section 147 of the Act, making additions to the income of the assessee, including a house allegedly purchased from undisclosed income and rental income.

The Commissioner of Income-tax (Appeals), Rohtak, issued a show-cause notice under section 263, considering the assessment order prejudicial to the Revenue's interest. The Commissioner disagreed with the Assessing Officer's view, based on the construction timeline of the house, leading to the revisional jurisdiction being exercised.

The Tribunal, upon appeal by the assessee, found that the Assessing Officer had considered substantial evidence and witness testimonies indicating the house construction period between 1993-96. The Tribunal noted the value of the property specified by the Departmental Valuation Officer and the ADIT (Investigation) report, concluding that the house construction could not be included in the assessment year 2000-01. The Tribunal highlighted the lack of reliance on evidence by the Commissioner of Income-tax, Rohtak, and deemed his conclusion as bald and perverse.

The High Court, after detailed analysis, concluded that the findings were factual in nature, focusing on the construction timeline of the house. The Assessing Officer's reliance on expert reports and references to ADIT (Investigation) was considered valid, while the Commissioner's conclusion lacked evidential support. The Court emphasized that these were factual issues, not raising any substantial question of law, leading to the dismissal of the appeal by the Revenue.

In summary, the High Court upheld the Tribunal's decision, emphasizing the factual nature of the findings regarding the construction timeline of the house and the lack of evidential support for the Commissioner's conclusion under section 263 of the Income-tax Act.