2004 (10) TMI 52 - HC - Income Tax

Depreciation - expenditure incurred for travel tour of the managing director - Petitioner contend that Assessing Officer has no jurisdiction or authority to issue the impugned notices. By the earlier order, the issue of depreciation of the electric meters and the amount of expenses incurred on account of foreign tour undertaken has been decided and consequently recomputed income and allowed refund. It is clear from the aforesaid order that the assessment for the relevant year, viz., 1994-95, is a complete one and by this impugned notice the Assessing Officer has sought to do piecemeal assessment. - I do not think, therefore, that the Assessing Officer has exceeded his jurisdiction or has improperly exercised jurisdiction. The order dated February 12, 2002, substantially relates to the reassessment under section 147 of the said Act in relation to the payment of sales tax. Therefore, I dispose of the writ petition having found no merit in the contention upon deep and close scrutiny

Summary

Issues:
Challenge to impugned notice dated May 15, 2002, regarding assessment year 1994-95 under the Income-tax Act, 1961, and related proceedings, notices, and orders. Disallowance of depreciation claimed and expenditure for managing director's travel tour.

Analysis:
The petitioner challenged the notice dated May 15, 2002, related to the assessment year 1994-95 under the Income-tax Act, 1961. The petitioner had purchased electric meters from the Gujarat Electricity Board and claimed depreciation on them. The Assessing Officer disallowed the depreciation claim and also refused to accept the rental income for taxing. The Commissioner of Income-tax (Appeals) partially allowed the appeal, granting depreciation on the book value of the meters. The Income-tax Appellate Tribunal set aside the decision on depreciation and directed a fresh decision by the Assessing Officer. The issue of expenses on foreign travel was also directed to be re-examined. The Revenue's cross objections were dismissed as being time-barred.

The Tribunal directed the Assessing Officer to re-examine the depreciation claim and expenses on foreign travel. The Assessing Officer issued a notice for fresh adjudication based on the Tribunal's order. The petitioner contended that the Assessing Officer had no jurisdiction to issue the notice after passing the order on February 12, 2002, which included a refund order. The petitioner argued that the assessment for the relevant year was complete, and piecemeal assessment was impermissible. The Department argued that the notice was to give effect to the Tribunal's direction and reassessment was done under section 147 for a different issue.

The High Court held that the order dated February 12, 2002, did not decide on the depreciation or travel expenses issues, as directed by the Tribunal. The Assessing Officer was required to decide afresh as per the Tribunal's direction, and failure to do so would breach quasi-judicial discipline. The court emphasized the importance of hierarchical discipline in quasi-judicial proceedings. The court distinguished cases cited by the petitioner, stating that the notice was not for reassessment but to implement the Tribunal's direction. The Assessing Officer did not exceed jurisdiction, and the order related to reassessment under section 147 for a different issue.

The High Court directed the Assessing Officer to complete the rehearing on the depreciation and travel expenses issues within two months from the date of the order, finding no merit in the petitioner's contentions after thorough scrutiny. No costs were awarded in the matter.