The Delhi High Court permitted the writ petition in favour of Mitsubishi Corporation and quashed the assessment order since the tribunal losses to regard the entire powers granted to it u/s 254 of the Income Tax Act of 1961, and the order was quashed to the extent that they denied consideration of the additional reasons that had been raised by the applicants.
The taxpayer, Mitsubishi Corporation, filed its Income Tax Return ( ITR ) dated 31-10-2005 declaring an income of INR 4,18,98,800/-. Afterwards, a revised income was filed, declaring the total income as Rs. 61,05,41,430. The revision was a result of Rs. 53.82 crore attributed to the activities of its liaison office in India and Rs. 3.06 crore in respect of actual sales to the Delhi Metro Rail Corporation.
The assessment officer (AO) refused to accept the above-said declarations when drafting an order of assessment dated December 31, 2008, and consequently decided not to move additionally with the settlement that had been cited.
The taxpayer who was dissatisfied with the aforesaid order filed a petition before the Commissioner of Income Tax (Appeals) and added additional grounds attacking the order taken by the AO. In the order of CIT(A), the additional grounds were dismissed.
Thereafter the applicant has approached the Income Tax Appellate Tribunal (ITAT). As per ITAT, it is interested in justice to remand the case back to the AO to decide afresh post providing the taxpayer a chance to be heard since the taxpayer has raised additional grounds for the initial time before the CIT(A) and no material was there to the AO during the framing of the assessment.
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The applicants claimed relief in the writ petition shall result in the income tax levying falling below the limit as shown in its ITR. For the applicants Mayank Nagi and Tarun Singh appeared, arguing that a taxpayer is forced by a return as furnished and stands restrained from advocating any divergences from it excluding filing a revised return, this limitation does not apply when an assessment is possible to be conducted under a directive issued by a court or tribunal.
The bench, led by Justice Yashwant Varma and Justice Ravinder Dudeja, determined that the Tribunal neglected to consider the extensive powers granted to it under Section 254 of the Income Tax Act. The bench also noted that, since the tribunal had instructed the Assessing Officer (AO) to reconsider the issue, this instruction could not be disregarded by citing Circular No. 549 on 31 October 1989.
The writ petition has been permitted by the bench and quashed the assessment order on 30 November 2021 insofar as they denied to acknowledge the other grounds that have been raised via the applicants. The bench asked the AO to pass fresh orders as per the law.
| Case Title | Mitsubishi Corporation Vs Assistant Commissioner of Income Tax |
| Citation | W.P.(C) 12911/2021 |
| Date | 30.07.2024 |
| Counsel For Appellant | Mr Mayank Nagi & Mr Tarun Singh, Advocates. |
| Counsel For Respondent | Mr Sanjay Kumar & Ms Easha Kadian, Advocates. Ms Nidhi Raman, CGSC with Mr Zubin Singh & Ms Rashi Kapoor |
| Delhi High Court | Read Order |
