Commissioner Of Income Tax-7, New Delhi v. Odeon Builders Pvt. Ltd . .

Factual and Procedural Background

The Revenue (Commissioner of Income Tax-7, New Delhi) had questioned an order deleting a disallowance of Rs. 19,39,60,866/- made solely on third-party information. The Commissioner of Income Tax (Appeals) found that the Assessing Officer had relied exclusively on statements obtained by the Investigation Wing without supplying those statements to the assessee or offering an opportunity for cross-examination. Accepting documentary evidence produced by the assessee, the CIT(A) deleted the addition.

The Revenue’s appeals were successively dismissed by the Income Tax Appellate Tribunal on 16 May 2014 and by the High Court on 5 July 2017. The High Court held that the concurrent factual findings were not perverse and that no substantial question of law arose.

When the matter reached the Supreme Court in Civil Appeals Nos. 9604–9605 of 2018, the Court dismissed the appeals on 17 September 2018, noting that the disputed tax effect appeared to be below the Rs. 1 crore threshold prescribed in the CBDT circular governing Revenue appeals.

In the present proceedings, the Revenue filed Review Petition (Civil) Diary No. 22394/2019, contending that the actual tax effect is Rs. 6,59,27,298/-—well above the threshold—and sought recall of the earlier dismissal. Delay in filing the review petition was separately condoned.

Legal Issues Presented

1. Whether the Supreme Court should recall its order dated 17 September 2018 dismissing the Revenue’s appeals on the ground that the tax effect was below Rs. 1 crore when, in fact, it exceeds that amount.
2. Whether any error apparent on the face of the record exists warranting review, given the concurrent findings of the CIT(A), ITAT, and High Court that the disallowance was unsustainable because it rested solely on unverified third-party information.

Arguments of the Parties

The opinion does not contain a detailed account of the parties' legal arguments.

Table of Precedents Cited

No precedents were cited in the provided opinion.

Court's Reasoning and Analysis

The Court acknowledged that, if the tax effect were the only consideration, its earlier order would ordinarily have been recalled because the disputed amount actually exceeds Rs. 1 crore. However, the Justices examined the merits of the case by reviewing the decisions of the CIT(A), ITAT, and High Court.

They noted that the entire disallowance of Rs. 19,39,60,866/- was predicated on third-party information that had never been independently verified by the Assessing Officer, nor had the assessee been furnished copies of the statements or afforded cross-examination. The assessee, on the other hand, had produced substantial documentary evidence—purchase bills, transport documents, confirmed accounts, cheque payments, VAT registrations, and sellers’ income-tax returns—satisfying the initial burden of proof.

The appellate authorities had therefore deleted the addition, and those concurrent findings were affirmed by the High Court as being free from perversity. Seeing no manifest error in those factual determinations, the Supreme Court concluded that no ground for review existed, despite the higher tax effect.

Holding and Implications

The review petitions are dismissed; the prior dismissal of the Revenue’s civil appeals stands affirmed.

The immediate consequence is that the deletion of the Rs. 19.39 crore disallowance in favour of M/s Odeon Builders Pvt. Ltd. remains undisturbed. The Court did not create new precedent; it merely reaffirmed that review jurisdiction will not be exercised where concurrent factual findings remain unassailed on perversity grounds, even if the monetary threshold for appeal is met.