2012 (4) TMI 634 - HC - Income Tax

Summary

Issues involved:
Challenging the order passed by the Income Tax Appellate Tribunal for the assessment years 2003-04 and 2004-05 u/s 263 of the Income Tax Act.

Summary:

Issue 1: Interpretation of Section 263(1) of Income Tax Act
The revenue appealed against the order of the Income Tax Appellate Tribunal challenging the correctness of the order passed by the Commissioner of Income Tax u/s 263 of the Income Tax Act. The Tribunal reframed the substantial question of law regarding the interpretation of Section 263(1) in the context of the case.

Issue 2: Correctness of Commissioner's Order
The Commissioner of Income Tax found irregularities in the assessment order of the public charitable and religious trust for the years 2003-04 and 2004-05. The Commissioner exercised powers u/s 263, deemed the Assessing Officer's order as erroneous, and issued a notice to the assessee. The Tribunal concluded that the Commissioner did not provide the assessee with an opportunity and held that the Commissioner cannot act based on one possible view of the Assessing Officer.

Issue 3: Tribunal's Decision
The Tribunal allowed the appeals filed by the assessee, stating that the grounds relied upon by the Commissioner were not applicable to the case. The revenue contended that the Tribunal overlooked the irregularities noted by the Commissioner, leading to an erroneous decision. The Tribunal justified its decision by emphasizing that if the Assessing Officer did not consider the grounds specified by the Commissioner, the matter should be remanded back to the Assessing Officer for reconsideration.

Conclusion:
After hearing both parties, the High Court found that the Tribunal erred in setting aside the Commissioner's order without considering the grounds specified by the Commissioner. The Court ruled in favor of the revenue, setting aside the Tribunal's order and remanding the matter back to the Assessing Officer for fresh consideration to complete the assessment for the respective years.