2006 (8) TMI 625 - AT - Income Tax

Summary

Issues:
Appeal against assessment order passed under s. 264/144 - Maintainability of appeal before CIT(A).

Analysis:
1. The appeals were directed against separate orders of the CIT(A) for the assessment year 1994-95. The lands of the appellants were acquired by the defense authority, leading to a dispute regarding the assessment of interest income received during the acquisition process.

2. The Assessing Officer (AO) assessed the interest income received between 9th April, 1991, and 4th Nov., 1992, on a receipt basis due to the absence of maintained books of account by the villagers. The appellants filed a petition under s. 264 of the Act to revise the assessment order, challenging the taxability of the interest income.

3. The CIT set aside the assessment orders, directing the AO to reframe the assessments in line with his observations. Subsequently, the AO passed orders under s. 264/144 on 24th Jan., 2001, against which the appellants filed appeals. The CIT(A) dismissed the appeals, stating that no appeals against orders passed under s. 264/144 were maintainable, citing s. 244A.

4. During the hearing, the main issue was the maintainability of the appeals before the CIT(A) against the orders passed by the AO under s. 264/144. The CIT(A) contended that the orders were not fresh assessment orders, hence not appealable under s. 246A.

5. The Tribunal analyzed the provisions of sec. 245A and s. 246A, concluding that the CIT(A) erred in deeming the orders as non-appealable. The orders passed under s. 264 were revisions leading to fresh assessment orders, making them appealable under s. 246A(1)(a).

6. Relying on precedents, the Tribunal distinguished the present case from previous judgments, emphasizing that the assessment orders were set aside for fresh framing, making them appealable. The Tribunal held that the appeals against the assessment orders passed in compliance with the CIT's directions under s. 264 were indeed appealable.

7. Consequently, the Tribunal allowed both appeals for statistical purposes, directing the CIT(A) to reconsider them on their merits and in accordance with the law. The decision highlighted the appealability of the fresh assessment orders framed following the directions of the CIT under s. 264.