2022 (2) TMI 498 - HC - Income Tax

High Court clarifies Commissioner's jurisdiction under Income Tax Act

Principal Commissioner Of Income Tax-11, Kolkata Versus Bravo Sponge Iron [P] Ltd.

The High Court of Calcutta addressed a delay in filing an appeal and the scope of the Commissioner's jurisdiction under Section 263 of the Income Tax Act, ... Revision u/s 263 by CIT - whether the Commissioner of Income Tax, Kolkata-1 [CIT(A)] while issuing a notice under Section 263 of the Act and adjudicating the matter can travel beyond the allegations set out in the said notice? - HELD THAT:- This issue has been settled in several decisions and it will be beneficial to take note of the decision in the case of Commissioner of Customs vs. Toyo Engg. India Ltd. [2006 (8) TMI 184 - SUPREME COURT]wherein the Hon’ble Supreme Court held that the department cannot travel beyond the show cause notice. This decision which was followed by the High Court of Delhi in the case of CIT vs. Contimeters Electricals (P) Ltd.[2008 (12) TMI 4 - HIGH COURT DELHI]was rightly taken note of by the Tribunal and the appeal filed by the assessee was allowed. Therefore, we find that there is no error committed by the Tribunal in deciding the issue in favour of the assessee. For such reason, the appeal is dismissed and the substantial question of law is answered against the revenue. Issues: Delay in filing appeal, Scope of Commissioner's jurisdiction under Section 263 of the Income Tax Act, 1961.Delay in filing appeal:The High Court of Calcutta addressed a delay of 64 days in filing an appeal, noting that the order being appealed was from 2016 and the appeal was filed in 2017. Despite the delay, the Court decided to hear the matter on its merits with the consent of the appellant's counsel, ultimately condoning the delay and disposing of the application accordingly.Scope of Commissioner's jurisdiction under Section 263:In the appeal under Section 260A of the Income Tax Act, 1961, the High Court considered whether the Commissioner of Income Tax, Kolkata-1, could go beyond the allegations in the notice issued under Section 263 while adjudicating the matter. The Court referred to precedents, including the case of Commissioner of Customs vs. Toyo Engg. India Ltd., where the Supreme Court held that the department cannot exceed the scope of the show cause notice. The Court also mentioned the High Court of Delhi's decision in CIT vs. Contimeters Electricals (P) Ltd., supporting the view that the Commissioner's jurisdiction is limited by the notice. Based on these precedents, the High Court found no error in the Tribunal's decision to allow the appeal filed by the assessee, dismissing the appeal by the revenue and answering the substantial question of law against the revenue.Conclusion:The High Court of Calcutta, in the judgment delivered by Hon'ble Justice T.S. Sivagnanam and Hon'ble Justice Hiranmay Bhattacharyya, addressed the delay in filing the appeal and discussed the scope of the Commissioner's jurisdiction under Section 263 of the Income Tax Act, 1961. The Court condoned the delay in filing the appeal and dismissed the appeal by the revenue, finding that the Commissioner cannot exceed the allegations in the notice while adjudicating the matter, based on relevant legal precedents. The stay application was also dismissed accordingly.