2004 (12) TMI 43 - HC - Income Tax

(i) Whether Tribunal was right in law in not sending the matter back to the CIT (Appeals) to decide the issues on merits when in fact the CIT (Appeals) order did not deal with the grounds on merits but allowed the assessee s appeal on a preliminary point? (ii) Whether Tribunal was right in law in upholding the validity of the assessment order when the order sent to the assessee was not signed by the AO? - Once the Tribunal had come to the conclusion that the assessment order had been signed by the AO and is valid in the eyes of law while reversing the order of the CIT (Appeals) on this count it was incumbent upon the Tribunal to restore the matter to the file of the CIT (Appeals) - Held that the Tribunal ought to have restored the matter to the file of the CIT (Appeals) after having decided the preliminary issue against the assessee.

Summary

Issues involved:
1. Failure of Tribunal to send the matter back to the Commissioner of Income-tax (Appeals) for deciding issues on merits.
2. Validity of the assessment order due to lack of signature by the Assessing Officer.

Analysis:

Issue 1: Failure to send matter back to Commissioner of Income-tax (Appeals) for deciding issues on merits
The appellant raised a preliminary objection regarding the unsigned assessment order before the Commissioner of Income-tax (Appeals), who accepted the objection and canceled the assessment order, not addressing the original grounds of appeal. The Tribunal, after finding the assessment order to be valid, allowed the Departmental appeal without sending the matter back to the Commissioner of Income-tax (Appeals) for deciding other grounds on merits. The appellant moved a miscellaneous application seeking to recall the order of the Tribunal, citing reasons of natural justice. The Tribunal rejected the application, leading to the appellant's plea to restore the matter for deciding the controversy on merits. The High Court held that the Tribunal should have sent the matter back to the Commissioner of Income-tax (Appeals) for deciding the original grounds of appeal, as the appellant had not given up its right of appeal and had challenged the additions made by the Assessing Officer on merits. The Court emphasized that the appellant's success in the appeal before the Commissioner of Income-tax (Appeals) did not require filing a cross-objection in the Revenue's appeal before the Tribunal.

Issue 2: Validity of the assessment order
The Commissioner of Income-tax (Appeals) had held the assessment order to be non-existent due to lack of the Assessing Officer's signature. However, the Tribunal found the assessment order to be valid, bearing the signature of the Assessing Officer at two different places. The Tribunal allowed the Departmental appeal and restored the order of the Assessing Officer. The High Court acknowledged the validity of the assessment order but emphasized that despite this, the Tribunal should have sent the matter back to the Commissioner of Income-tax (Appeals) for deciding the merits of the original grounds of appeal raised by the assessee.

In conclusion, the High Court allowed the appeal, holding that the Tribunal should have sent the matter back to the Commissioner of Income-tax (Appeals) for deciding the merits of the original grounds of appeal. The Court restored the matter to the file of the Commissioner of Income-tax (Appeals) to enable a decision on the merits of the controversy between the parties. The Court emphasized the importance of ensuring natural justice and the right of appeal for the assessee.