2011 (4) TMI 123 - HC - Income Tax

Search and seizure - Revision - Valuation report - It is manifest from a perusal of the assessment orders that the two assessees assumed an abnormally defiant approach, and refused to disclose informations called for by the learned Assessing Officer in spite of repeated notices and calls - the assessees are extremely dishonest persons who have no respect for the laws of the land, the established procedure, and the authorities charged with the duties under the Act. - the learned Tribunal has failed to attach due importance to the vital omissions indicated by the learned Commissioner. In such a situation, the two judgments relied on by the learned counsel for the assessees are inapplicable to the facts and circumstances of the present case. The issues are indeed not concluded by findings of facts. The superior court or quasi-judicial authority should normally act with restrain while setting aside the impugned order with a view to remit the matter to the same authority or the court, because such an order of remand sets at naught the entire effort made till then to resolve the dispute. The function of the appellate court is to rectify the errors and the mistakes committed in the impugned order. An order of remand can be passed under limited circumstances so that no injustice is done to any side. It is equally well settled that the superior court or quasi judicial authority do not normally interfere with an order of remand where the parties will have adequate & reasonable opportunity to present their cases. In the present case, the learned Commissioner remitted the matter for valid reasons discussed in detail in his orders, and the learned Tribunal erred in interfering with the same for unconvincing reasons and perfunctory approach. - Order of CIT u/s 263 restored.

Summary

Issues:
Appeals under section 260A of the Income-tax Act against a judgment of the Income-tax Appellate Tribunal, Patna; Consideration of substantial questions of law; Validity of orders of remand passed by the Commissioner of Income-tax under section 263 of the Act; Allegations of non-cooperation by the assessees; Correctness of the Tribunal's decision to set aside the orders of the Commissioner of Income-tax and restore the orders of the Assessing Officer.

Analysis:

1. The appeals were filed by the Department of Income-tax under section 260A of the Income-tax Act against a judgment of the Income-tax Appellate Tribunal, Patna, setting aside the orders of remand passed by the Commissioner of Income-tax under section 263 of the Act. The substantial questions of law included whether all inquiries and verifications were conducted by the Assessing Officer, the correctness of observations regarding investments in specific properties, and the applicability of a Supreme Court decision regarding assessment completion and valuation reports.

2. The case involved assessment proceedings for the assessees, including Rita Keshri and Shekhar Keshri, for different assessment years. The Commissioner of Income-tax had remitted the matters for fresh consideration due to perceived vital flaws in the assessment orders. The Tribunal allowed the appeals, setting aside the Commissioner's orders and restoring those of the Assessing Officer.

3. The Tribunal's decision was challenged on the grounds that the Commissioner had identified significant flaws in the assessment orders, which were not adequately addressed by the Tribunal. The non-cooperation of the assessees was highlighted as a crucial factor leading to incomplete assessments.

4. Section 263 of the Act empowers the Commissioner to revise orders prejudicial to revenue, which was invoked in this case due to the dishonest and uncooperative behavior of the assessees. The Commissioner's detailed findings were not given due importance by the Tribunal, leading to an erroneous decision to set aside the orders of remand.

5. The Court emphasized the importance of not interfering with orders of remand unless necessary, especially when parties have opportunities to present their cases adequately. The Commissioner's decision to remit the matter was deemed valid, considering the lack of cooperation from the assessees and the vital omissions in the assessment orders.

6. Ultimately, the Court set aside the Tribunal's judgment and restored the orders of the Commissioner of Income-tax, ruling in favor of the revenue. The dishonest conduct of the assessees and the need for constant surveillance by tax authorities were highlighted to prevent revenue loss and unnecessary legal burdens.

7. The judgment was delivered jointly by two judges, S.K. Katriar and S.P. Singh, with the latter concurring with the decision to uphold the orders of the Commissioner of Income-tax.