2012 (8) TMI 1084 - AT - Income Tax

Summary

Issues involved: Appeal against order of ld. CIT(A) on various grounds including jurisdiction of ld. CIT(A) to direct Assessing Officer to reinitiate proceedings u/s 148, validity of direction under section 150, and powers of ld. CIT(A) under section 251 of the Income-tax Act, 1961.

Jurisdiction of ld. CIT(A) to direct Assessing Officer to reinitiate proceedings u/s 148:

The appeal was filed against the order of ld. CIT(A) directing the Assessing Officer to reinitiate proceedings under section 148 by recording proper reasons and seeking approval of superior authorities. The appellant contended that no income chargeable to tax had escaped assessment and the direction given by the ld. CIT(A) was illegal. The ld. CIT(A) was found to have no jurisdiction to issue such a direction as it was beyond the scope of his powers under section 251 of the Act. The direction was considered uncalled for and was set aside, ultimately leading to the allowance of the appeal.

Validity of direction under section 150:

The appellant challenged the direction given under section 150 by the ld. CIT(A) as being in excess and amounting to an improper exercise of jurisdiction. It was argued that the reasons recorded by the Assessing Officer were not relevant for initiating proceedings under section 147, making the direction improper. The direction for reinitiation of proceedings under section 147 based on a revised return was deemed to be a fresh exercise of jurisdiction reserved for the Assessing Officer alone. The direction was further contended to be barred by limitation and beyond the jurisdiction of the ld. CIT(A) under section 150 of the Act. The order appealed against was considered contrary to facts, law, and principles of natural justice.

Powers of ld. CIT(A) under section 251 of the Income-tax Act, 1961:

The ld. CIT(A) was analyzed in terms of his powers under section 251 of the Act, which allow him to confirm, reduce, enhance, or annul the assessment. The appellant argued that the ld. CIT(A) had no authority to direct the Assessing Officer to frame an assessment in a specific manner. The Tribunal found that the ld. CIT(A) lacked the power to issue such a direction after annulling the assessment, as it was not within his jurisdiction. The direction given by the ld. CIT(A) to the Assessing Officer was deemed beyond the scope of his powers under section 251, leading to the setting aside of the order passed in this regard and the allowance of the appeal.