2003 (4) TMI 88 - HC - Income Tax

Assessment under section 144/145(3) of the Income-tax Act, 1961. - By this writ application the writ petitioner has challenged an assessment order passed - The assessing authority, therefore, acted without jurisdiction in reopening the assessment notwithstanding the fact that such right was not conferred upon him by the appellate authority. There is no dispute that the order of the appellate authority has not been impugned by the Department and as such the same has attained finality. - I, thus, set aside the order impugned on the ground that the Assistant Commissioner acted without jurisdiction in reassessing the matter in the absence of any direction from the appellate authority.

Summary

Issues involved: Challenge to assessment order under section 144/145(3) of the Income-tax Act, 1961 based on lack of jurisdiction due to absence of specific direction for reassessment by the appellate authority.

Analysis:

The writ petitioner challenged an assessment order passed by the Assistant Commissioner of Income tax, Circle 32, under section 144/145(3) of the Income-tax Act, 1961. The petitioner contended that a previous order by the appellate authority had set aside the assessing authority's order, and this decision had attained finality. The petitioner argued that without a specific direction from the appellate authority to reopen the assessment, the assessing authority had no jurisdiction to reassess the matter. The respondents, however, claimed that the intention of the appellate authority was to direct the assessing authority to reopen the assessment, even though no specific direction was given in the order. The key question was whether the order of the appellate authority conferred any right upon the assessing authority to reopen the assessment.

The appellate authority's order highlighted that certain issues needed further examination, such as purchases based on sales tax permits and valuation matters, which would require considerable time for exploration and investigation. Despite these observations, the appellate authority did not provide a specific direction for reassessment. The Court noted that the absence of a direction for reassessment in the appellate authority's order indicated that the assessing authority acted without jurisdiction in reopening the assessment. As the order of the appellate authority had not been challenged by the Department and had attained finality, the Court set aside the assessing authority's order on the grounds of lack of jurisdiction.

In conclusion, the Court allowed the writ application, emphasizing that the assessing authority had acted without jurisdiction in reassessing the matter without a specific direction from the appellate authority. The judgment highlighted the importance of adherence to procedural requirements and the need for a clear direction for reassessment to be valid.