Engineering Profesional Co. Pvt. Ltd. v. The Deputy Commissioner of Income-tax, Circle-1(1)(1)
[Citation -2020-LL-0107-54]

Citation 2020-LL-0107-54
Appellant Name Engineering Profesional Co. Pvt. Ltd.
Respondent Name The Deputy Commissioner of Income-tax, Circle-1(1)(1)
Court HIGH COURT OF GUJARAT AT AHMEDABAD
Relevant Act Income-tax
Date of Order 07/01/2020
Assessment Year 2004-05
Judgment View Judgment
Keyword Tags disallowance of depreciation • unexplained investment • computation of income • preliminary objection • imposition of penalty • alternative remedy • service of notice • statutory appeal • civil contractor • sufficient cause
Bot Summary: 2 The facts giving rise to this writ application may be summarised as under: 2.1 The writ applicant seeks to challenge the order passed by the respondent under Section 143(3) read with Section 254 of the Income Tax Act, 1961 for the assessment year 2004 2005. 2.4 The writ applicant, thereafter, thought fit to carry the matter before the Income Tax Appellate Tribunal by the time, the writ applicant could prefer the appeal, there was already delay of 329 days in filing such appeal. SUBMISSIONS ON BEHALF OF THE WRIT APPLICANT: 7 Mr. Hemani, the learned senior counsel assisted by Ms. Vaibhavi K. Parikh, the learned counsel appearing for the writ applicant vehemently submitted that the impugned order passed by the Assessing Officer is without jurisdiction. According to her, it would not be correct to interpret the order of the Tribunal to the extent of only asking the Assessing Officer to consider the claim of the writ applicant of lower rate of profit. Nooh, AIR 1958 SC 86 and K.S. Venkataraman and Co. Ltd vs. State of Madras, AIR 1966 SC 1089 have held that though Article 226 confers a very wide powers in the matter of issuing writs on the High Court, the remedy of writ absolutely discretionary in character. In the instant case, neither has the assessee writ petitioner described the available alternate remedy under the Act as ineffectual and non efficacious while invoking the writ jurisdiction of the High Court nor has the High Court ascribed cogent and satisfactory reasons to have exercised its jurisdiction in the facts of instant case. 17 The whole idea in relying upon the aforesaid decision of the Supreme Court is that the Tribunal could not have done two things: first it could have allowed the appeal and quashed and set aside the order of the Assessing Officer or it could have dismissed the appeal of the writ applicant.


IN HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 1997 of 2019 FOR APPROVAL AND SIGNATURE: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA 1 Whether Reporters of Local Papers may be allowed to see judgment ? NO 2 To be referred to Reporter or not ? NO 3 Whether their Lordships wish to see fair copy of judgment ? NO 4 Whether this case involves substantial question of law as to interpretation of Constitution of India or any order NO made thereunder ? ENGINEERING PROFESIONAL CO. PVT LTD. Versus DEPUTY COMMISSIONER OF INCOME TAX CIRCLE 1(1)(1) Appearance: MS VAIBHAVI K PARIKH(3238) for Petitioner(s) No. 1 MRS KALPANAK RAVAL(1046) for Respondent(s) No. 1 CORAM: HONOURABLE MR.JUSTICE J.B.PARDIWALA and HONOURABLE MR. JUSTICE BHARGAV D. KARIA Date : 07/01/2020 ORAL JUDGMENT (PER : HONOURABLE MR.JUSTICE J.B.PARDIWALA) 1 Rule returnable forthwith. Ms. Raval, learned standing counsel appearing for Revenue waives service of notice of rule for and on behalf of Revenue. Page 1 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT 2 By this writ application under Article 226 of Constitution of India, writ applicant (assessee) has prayed for following reliefs: (a) quash and set aside impugned Assessment Order dated 27.12.2018 at Annexure A' to this petition; (b) pending admission, hearing and final disposal of this petition, to stay implementation and operation of Assessment Order dated 27.12.2018 at Annexure to this petition; (c) any other and further relief deemed just and proper be granted in interest of justice; (d) to provide for cost of this petition. 2 facts giving rise to this writ application may be summarised as under: 2.1 writ applicant seeks to challenge order passed by respondent under Section 143(3) read with Section 254 of Income Tax Act, 1961 (for short, 'the Act, 1961') for assessment year 2004 2005. assessee is company incorporated under Companies Act, 1956. assessee is in business of construction. return of income for year under consideration was filed on 1st November 2004 declaring total income at Rs.11,16,785/ (Rupees Eleven Lakh Sixteen Thousand Seven Hundred Eighty Five only) and same was processed under Section 143(1) of Act. 2.2 case of assessee came to be selected for scrutiny and various details were called for by Assessing Officer. In such circumstances, best judgement assessment came to be framed under Section 144 of Act vide order dated 8th December 2006 assessing Page 2 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT income of assessee at Rs.1,25,93,920/ (Rupees One Crore Twenty Five Lakh Ninety Three Thousand Nine Hundred Twenty only) in view of provisions of Section 44AD of Act. 2.3 writ applicant challenged assessment order dated 8th December 2006 by preferring appeal before CIT (Appeals). said appeal came to be dismissed by CIT(Appeals) vide order dated 31st December 2007. 2.4 writ applicant, thereafter, thought fit to carry matter before Income Tax Appellate Tribunal, but, by time, writ applicant could prefer appeal, there was already delay of 329 days in filing such appeal. Income Tax Appellate Tribunal declined to condone delay. In such circumstances, writ applicant came before this Court by filing Tax Appeal No.1465 of 2011. Tax Appeal No.1465 of 2011 came to be allowed by this Court vide order dated 11th December 2012 and matter was remitted to Appellate Tribunal. order passed by this Court dated 11th December 2012 referred to above reads as under: 1. Learned counsel Mr. Sudhir Mehta appears for respondent in response to our notice of final disposal issued on 18.9.2012. 2. Assessee has challenged decision of Income Tax Appellate Tribunal dated 5.8.2011 by which appeal of present appellant came to be dismissed on ground that there was delay of 329 days in filing appeal and assessee, despite several opportunities, had not filed any application explaining such delay and seeking condonation thereof. 3. Counsel for appellant submitted that assessee is engaged in business of construction as Civil Contractor and persons responsible for assessee company need to continuously travel in relation with their work, due to which, instructions could not be immediately supplied to counsel for filing application for condonation of delay. She submitted that before Tribunal request was made for granting one more Page 3 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT opportunity. However, Tribunal, considering passage of time, proceeded to dismiss appeal only on ground that there was delay in presenting appeal and no condonation was sought. 4. Having perused order of Tribunal and having heard Counsel for parties, we are of opinion that appellant, of course, subject to certain strict conditions, is required to be granted one last opportunity of filing application for condonation of delay before Tribunal. 5. Under circumstances, order of Tribunal is reversed. Proceedings are placed back before Tribunal to permit appellant to file application for condonation of delay. This shall, however, be subject to following conditions that appellant : 1) shall deposit sum of Rs.5000/ with Gujarat State Legal Services Authority latest by 31.12.2012; 2) shall file appropriate application for condonation of delay before Tribunal also latest by said date. Appeal is disposed of accordingly. 2.5 Appellate Tribunal partly allowed appeal preferred by writ applicant herein holding as under: 6 We have carefully perused contents of application for condonation of delay along with affidavit. In our considered opinion, assessee prevented by reasonable and sufficient cause for not filing appeal on time. Therefore, in interest of Justice and fair play, delay is condoned. 7. Coming to merits of case, we find that assessment order was made ex parte u/s. 144 of Act which was confirmed by ld. CIT(A). 8. perusal of order of authorities below shows that because of non attendance by assessee, A.O. proceeded by applying rate of 8% following guidelines of Section 44AD of Act. 9. In our considered opinion and understanding of facts in issue, since e return was accompanied with Audit Report u/s 44AB of Act provisions of Section 44AD are not applicable. Page 4 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT 10. Therefore, in interest of justice, we deem it fit to restore issue to files of A.O. Assessee is directed to attend assessment proceedings and justify its claim of lower rate of profit in accordance with its books of accounts. A.O. is directed to verify same and decide issue afresh after giving reasonable and fair opportunity of being heard to assessee. 11 In result, appeal filed by Assess is treated as allowed for statistical purpose. 3 Thus, Appellate Tribunal took into consideration following: [a] assessment order was ex parte under Section 144 of Act. [b] authority ought not to have proceeded by applying rate of 8% following guidelines of Section 44AD of Act. [c] As return was accompanied with audit report under Section 44AB of Act, provisions of Section 44AD would not be applicable. 4 In such circumstances referred to above, Appellate Tribunal thought fit to direct Assessing Officer to reconsider claim of assessee of lower rate of profit in accordance with its books of account. direction issued by Tribunal is very specific. Tribunal directed Assessing Officer to verify claim of lower rate of profit and decide issue fresh after giving reasonable opportunity of hearing to writ applicant. 5 On matter being remitted to Assessing Officer, Assessing Officer appears to have travelled beyond scope of issue Page 5 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT on which Tribunal remitted matter. In fresh assessment order, Assessing Officer held as under: 12 After discussion and on basis of data made available on record, total income of assessee for year under consideration is assessed as under: Computation of income In Rs. Total income as per return of income 11,18,785/ Add: On account of disallowance of sundry 33,03,66,066/ creditors as discussed in para 8 On account of disallowance of unexplained 84,83,340/ expenses in para 9 On account of unexplained investment as 19,85,627/ discussed in para 10 On account of disallowance of depreciation 94,317/ as discussed in para 10.3 On account of disallowance of trade 1,28,38,395/ 5,37,67,745/ payable as discussed in para 11 Assessed income 5,48,84,530/ 13 Assessed u/s. 143(3) r.w.s. 254 of Income Tax Act, 1961. Give credit for prepaid taxes, after verification. Charge interest u/s. 234A, u/s.234B, 234C & 234D of I.T. Act, 1961 as applicable. Issued show cause notice u/s. 274 r.w. Section 271(1)(c) of Act. Issue demand notice and challan accordingly. 6 Being dissatisfied with order passed by Assessing Officer, assessee is here before this Court with present writ application. SUBMISSIONS ON BEHALF OF WRIT APPLICANT: 7 Mr. Hemani, learned senior counsel assisted by Ms. Vaibhavi K. Parikh, learned counsel appearing for writ applicant vehemently submitted that impugned order passed by Assessing Officer is without jurisdiction. learned senior counsel would submit Page 6 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT that what cannot be done directly could not have been done indirectly. It is submitted that order of Tribunal remitting matter, more particularly, last part of direction is very specific and clear. According to learned senior counsel, Assessing Officer was asked to look into claim of assessee with regard to lower rate of profit and while undertaking such exercise, Assessing Officer appears to have travelled much beyond issue upon which he was asked to look into. This is principal and only argument of learned senior counsel while assailing order passed by Assessing Officer. 8 In such circumstances referred to above, learned senior counsel appearing for writ applicant prays that there being merit in this petition, same be allowed and impugned order be quashed and set aside and Assessing Officer may be asked to once again look into matter in accordance with original directions of Tribunal. SUBMISSIONS ON BEHALF OF REVENUE: 9 On other hand, Ms. Raval, learned standing counsel appearing for Revenue has vehemently opposed this writ application. Ms. Raval would submit that no error, not to speak of any error of law could be said to have been committed by Assessing Officer in passing impugned order. Ms. Raval has raised preliminary objection with regard to maintainability of this writ application. According to Ms. Raval, writ applicant ought to have preferred statutory appeal before CIT (Appeals) and could not have come straight before this Court invoking extraordinary jurisdiction under Article 226 of Constitution of India. 10 Ms. Raval, without prejudice to her preliminary objection as Page 7 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT regards alternative remedy available to writ applicant, further submitted that direction of Appellate Tribunal is being misconstrued or rather misinterpreted. According to her, it would not be correct to interpret order of Tribunal to extent of only asking Assessing Officer to consider claim of writ applicant of lower rate of profit. learned standing counsel would submit that once Tribunal takes view that Section 44AD would not be applicable, entire assessment would be vast open and it would be within jurisdiction of Assessing Officer to look into other aspects also of matter. 11 In such circumstances referred to above, learned standing counsel prays that there being no merit in this writ applicant, same be rejected. 12 Having heard learned counsel appearing for parties and having gone through materials on record, following two questions fall for our consideration: [1] Whether we should entertain this writ application in view of fact that there is alternative remedy available to writ applicant by preferring appeal before CIT (Appeals)? [2] If we take view that this writ application is maintainable, then whether impugned order passed by Assessing Officer is sustainable in law? 13 Having regard to basic infirmity in impugned order passed by Assessing Officer, we are of view that we should not reject this writ application only ground that writ applicant has Page 8 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT alternative efficacious remedy of preferring appeal before CIT (Appeals). In this context, we may refer to decision of Supreme Court in case of Commissioner of Income Tax vs. Chhabil Dass Agarwal [2013] 357 ITR 357 (SC). We rely upon observations made in paras 15 to 20. same reads thus: 15. Before discussing fact proposition, we would notice principle of law as laid down by this Court. It is settled law that non entertainment of petitions under writ jurisdiction by High Court when efficacious alternative remedy is available is rule of self imposed limitation. It is essentially rule of policy, convenience and discretion rather than rule of law. Undoubtedly, it is within discretion of High Court to grant relief under Article 226 despite existence of alternative remedy. However, High Court must not interfere if there is adequate efficacious alternative remedy available to petitioner and he has approached High Court without availing same unless he has made out exceptional case warranting such interference or there exist sufficient grounds to invoke extraordinary jurisdiction under Article 226. (See: State of U.P. vs. Mohammad Nooh, AIR 1958 SC 86; Titaghur Paper Mills Ltd vs. State of Orissa, (1983) 2 SCC 433; Harbanslal Sahnia vs. Indian Oil Corpn. Ltd. (2003) 2 SCC 107; State of H.P. Vs. Gujarat Ambuja Cement Ltd., (2005) 6 SCC 499). 16. Constitution Benches of this Court in K.S. Rashid and Sons vs. Income Tax Investigation Commission, AIR 1954 SC 207; Sangram Singh vs. Election Tribunal, Kotah, AIR 1955 SC 425; Union of India vs. T.R. Varma, AIR 1957 SC 882; State of U.P. Vs. Mohd. Nooh, AIR 1958 SC 86 and K.S. Venkataraman and Co. (P) Ltd vs. State of Madras, AIR 1966 SC 1089 have held that though Article 226 confers very wide powers in matter of issuing writs on High Court, remedy of writ absolutely discretionary in character. If High Court is satisfied that aggrieved party can have adequate or suitable relief elsewhere, it can refuse to exercise its jurisdiction. Court, in extraordinary circumstances, may exercise power if it comes to conclusion that there has been breach of principles of natural justice or procedure required for decision has not been adopted. (See: N.T. Veluswami Thevar vs. G. Raja Nainar, AIR 1959 SC 422; Municipal Council, Khurai vs. Kamal Kumar, (1965) 2 SCR 653; Siliguri Municipality vs. Amalendu Das, (1984) 2 SCC 436; S.T. Muthusami vs. K. Natarajan, (1988) 1 SCC 572; Rajasthan SRTC vs. Krishna Kant, (1995) 5 SCC 75; Kerala SEB vs. Kurien E. Kalathil, (2000) 6 SCC 293; A. Venkatasubbiah Naidu vs. S. Chellappan, (2000) 7 SCC 695; L.L. Sudhakar Reddy vs. State of A.P., (2001) 6 SCC 634; Shri Sant Sadguru Page 9 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT Janardan Swami (Moingiri Maharaj) Sahakari Dugdha Utpadak Sanstha vs. State of Maharashtra, (2001) 8 SCC 509; Pratap Singh vs. State of Haryana, (2002) 7 SCC 484 and GKN Driveshafts (India) Ltd. vs. ITO, (2003) 1 SCC 72). 17. In Nivedita Sharma vs. Cellular Operators Assn. of India, (2011) 14 SCC 337, this Court has held that where hierarchy of appeals is provided by statute, party must exhaust statutory remedies before resorting to writ jurisdiction for relief and observed as follows: 12. In Thansingh Nathmal v. Supdt. of Taxes, AIR 1964 SC 1419 this Court adverted to rule of self imposed restraint that writ petition will not be entertained if effective remedy is available to aggrieved person and observed: (AIR p. 1423, para 7). 7. High Court does not therefore act as court of appeal against decision of court or tribunal, to correct errors of fact, and does not by assuming jurisdiction under Article 226 trench upon alternative remedy provided by statute for obtaining relief. Where it is open to aggrieved petitioner to move another tribunal, or even itself in another jurisdiction for obtaining redress in manner provided by statute, High Court normally will not permit by entertaining petition under Article 226 of Constitution machinery created under statute to be bypassed, and will leave party applying to it to seek resort to machinery so set up. 13. In Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433 this Court observed: (SCC pp. 440 41, para 11) 11. It is now well recognised that where right or liability is created by statute which gives special remedy for enforcing it, remedy provided by that statute only must be availed of. This rule was stated with great clarity by Willes, J. in Wolverhampton New Waterworks Co. v. Hawkesford, 141 ER 486 in following passage: (ER p. 495) There are three classes of cases in which liability may be established founded upon statute. But there is third class viz. where liability not existing at common law is created by statute which at same time gives special and particular remedy for enforcing it. remedy provided by statute must be followed, and it is not competent to party to pursue course applicable to cases of second class. form given by statute must be adopted and adhered to. rule laid down in this passage was approved by House of Lords in Neville v. London Express Newspapers Ltd., 1919 AC 368 and has been Page 10 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT reaffirmed by Privy Council in Attorney General of Trinidad and Tobago v. Gordon Grant and Co. Ltd., 1935 AC 532 (PC) and Secy. of State v. Mask and Co., AIR 1940 PC 105 It has also been held to be equally applicable to enforcement of rights, and has been followed by this Court throughout. High Court was therefore justified in dismissing writ petitions in limine. 14. In Mafatlal Industries Ltd. v. Union of India, (1997) 5 SCC 536 B.P. Jeevan Reddy, J. (speaking for majority of larger Bench) observed: (SCC p. 607, para 77) 77. So far as jurisdiction of High Court under Article 226 or for that matter, jurisdiction of this Court under Article 32 is concerned, it is obvious that provisions of Act cannot bar and curtail these remedies. It is, however, equally obvious that while exercising power under Article 226/Article 32, Court would certainly take note of legislative intent manifested in provisions of Act and would exercise their jurisdiction consistent with provisions of enactment. (See: G. Veerappa Pillai v. Raman & Raman Ltd., AIR 1952 SC 192; CCE v. Dunlop India Ltd., (1985) 1 SCC 260; Ramendra Kishore Biswas v. State of Tripura, (1999) 1 SCC 472; Shivgonda Anna Patil v. State of Maharashtra, (1999) 3 SCC 5; C.A. Abraham v. ITO, (1961) 2 SCR 765; Titaghur Paper Mills Co. Ltd. v. State of Orissa, (1983) 2 SCC 433; H.B. Gandhi v. Gopi Nath and Sons, 1992 Supp (2) SCC 312; Whirlpool Corpn. v. Registrar of Trade Marks, (1998) 8 SCC 1; Tin Plate Co. of India Ltd. v. State of Bihar, (1998) 8 SCC 272; Sheela Devi v. Jaspal Singh, (1999) 1 SCC 209 and Punjab National Bank v. O.C. Krishnan, (2001) 6 SCC 569) 18. In Union of India vs. Guwahati Carbon Ltd., (2012) 11 SCC 651, this Court has reiterated aforesaid principle and observed: 8. Before we discuss correctness of impugned order, we intend to remind ourselves observations made by this Court in Munshi Ram v. Municipal Committee, Chheharta, (1979) 3 SCC 83. In said decision, this Court was pleased to observe that: (SCC p. 88, para 23). 23. when revenue statute provides for person aggrieved by assessment thereunder, particular remedy to be sought in particular forum, in particular way, it must be sought in that forum and in that manner, and all other forums and modes of seeking [remedy] are excluded. 19. Thus, while it can be said that this Court has recognized some Page 11 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT exceptions to rule of alternative remedy, i.e., where statutory authority has not acted in accordance with provisions of enactment in question, or in defiance of fundamental principles of judicial procedure, or has resorted to invoke provisions which are repealed, or when order has been passed in total violation of principles of natural justice, proposition laid down in Thansingh Nathmal case, Titagarh Paper Mills case and other similar judgments that High Court will not entertain petition under Article 226 of Constitution if effective alternative remedy is available to aggrieved person or statute under which action complained of has been taken itself contains mechanism for redressal of grievance still holds field. Therefore, when statutory forum is created by law for redressal of grievances, writ petition should not be entertained ignoring statutory dispensation. 20. In instant case, Act provides complete machinery for assessment/re assessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by Revenue Authorities, and assessee could not be permitted to abandon that machinery and to invoke jurisdiction of High Court under Article 226 of Constitution when he had adequate remedy open to him by appeal to Commissioner of Income Tax (Appeals). remedy under statute, however, must be effective and not mere formality with no substantial relief. In Ram and Shyam Co. vs. State of Haryana, (1985) 3 SCC 267 this Court has noticed that if appeal is from Caesar to Caesar s wife existence of alternative remedy would be mirage and exercise in futility. In instant case, neither has assessee writ petitioner described available alternate remedy under Act as ineffectual and non efficacious while invoking writ jurisdiction of High Court nor has High Court ascribed cogent and satisfactory reasons to have exercised its jurisdiction in facts of instant case. 14 Thus, dictum of law, as laid in aforesaid decision, is that although Act provides complete machinery for assessment / reassessment of tax, imposition of penalty and for obtaining relief in respect of any improper orders passed by Revenue Authorities, yet remedy under statute, however, must be effective and not mere formality with no substantial relief. It is true that when statutory forum is created by law for redressal of grievance, writ petition should not be entertained ignoring statutory dispensation. But, such principles, in given case, may be given go bye, if Court is convinced that on Page 12 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT face of it, impugned order is not sustainable in law. We are of view that we should look into matter on merits while overruling preliminary objection raised on behalf of Revenue. 15 We are convinced that impugned order passed by Assessing Officer is not sustainable in law. We once again fall back on directions issued by Appellate Tribunal. directions are plain and simple. Tribunal takes view that Section 44AD of Act is not applicable. It directed assessee to attend assessment proceedings and justify its case on lower rate of profit in accordance with its books of account. Assessing Officer was directed to verify same and decide issue fresh (the Tribunal says that decide issue fresh means issue with regard to claim of lower rate of profit). 16 Mr. Hemani, learned senior counsel appearing for writ applicant invited our attention to decision of Supreme Court in case of MCorp Global P. LTD vs. Commissioner of Income Tax [2009] 309 ITR 434 (SC) wherein Supreme Court has observed as under: In case of Hukumchand Mills Ltd. v. CIT reported in [1967] 63 ITR 232 this Court has held that under section 33(4) of Income Tax, 1922 (equivalent to section 254(1) of 1961 Act), Tribunal was not authorized to take back benefit granted to assessee by Assessing Officer. Tribunal has no power to enhance assessment. 17 whole idea in relying upon aforesaid decision of Supreme Court is that Tribunal could not have done two things: first it could have allowed appeal and quashed and set aside order of Assessing Officer or it could have dismissed appeal of writ applicant. Page 13 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 C/SCA/1997/2019 JUDGMENT 18 If appeal would have been dismissed without there being any direction of remitting matter to Assessing Officer, then effect would have been as if Tribunal has accepted that case would fall within Section 44AD of Act thereby justifying 8% rate of profit. Here is case where Assessing Officer, by its impugned order, has absolutely created new liability for writ applicant and that too, contrary to directions issued by Appellate Tribunal. 19 For foregoing reasons, we are convinced that impugned order passed by Assessing Officer is not sustainable in law. 20 In result, this writ application succeeds and is hereby allowed. impugned order passed by Assessing Officer is hereby quashed and set aside. matter is remitted to Assessing Officer for fresh consideration of issue as specifically directed by Appellate Tribunal. We once again clarify that Assessing Officer now needs to reconsider issue with regard to claim of writ applicant for lower rate of profit and not at rate of 8%. Rule is made absolute to aforesaid extent. (J. B. PARDIWALA, J) (BHARGAV D. KARIA, J) CHANDRESH Page 14 of 14 Downloaded on : Thu Jan 09 10:32:23 IST 2020 Engineering Profesional Co. Pvt. Ltd. v. Deputy Commissioner of Income-tax, Circle-1(1)(1)
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