- (1.) The Revenue is before us, challenging order dated August 26, 2013 (annexure A-3), passed by the Income-tax Appellate Tribunal, Amritsar Bench, Amritsar, pertaining to the assessment year 2009-10, on the following substantial questions of law: "(i) Whether the impugned order of the hon'ble Tribunal is perverse in applying the net profit rate of 5 per cent, while accepting the returned income of the assessee whereas the Tribunal has upheld the action of the Assessing Officer, in invoking the provisions of section 145(3) of the Income-tax Act, 1961? (ii) Whether the hon'ble Tribunal is right in law in reducing the net profit rate to 5 per cent, as against 10 per cent, applied by the Assessing Officer and also as against 8 per cent, applied by the Commissioner of Income-tax (Appeals), and, thus, ignoring the judgment delivered by the jurisdictional High Court in the case of Shivam Construction Co. (I.T.A. No. 167 of 2007 and I.T.A. No. 183 of 2007), relied upon by the Assessing Officer? Counsel for the Revenue submits that in the absence of any reason for applying the net profit rate at 5 per cent, or reference to the relevant facts like: past history of the assessee, assessment orders that may have attained finality, the nature of the assessee's business, the value of the contract, prevailing economic condition, etc., as set out in I.T.A. No. 269 of 2014 Tele-links v. CIT, 2015 377 ITR 158 decided on November 29, 2014, the impugned order is perverse and arbitrary and may be set aside.
(2.) Counsel for the assessee submits that as the past history of the assessee is referred to by the Assessing Officer and the Commissioner of Income-tax (Appeals), it may be presumed that the Income-tax Appellate Tribunal was conscious of the past history and, therefore, proceeded to assess the net profit rate of 5 per cent. It is also contended that in the previous year, the assessee was assessed at a net profit rate of 4.22 per cent. The assertion by counsel for the Revenue that the net profit rate of 5 per cent, has been applied arbitrarily is, therefore, factually and legally incorrect.
(3.) We have heard counsel for the parties, perused the impugned order and are inclined to answer the questions of law in favour of the Revenue.;