2011 (1) TMI 900 - AT - Income Tax

Rectification of order - it was submitted by the revenue that a search was conducted in the premises of the assessee on 17-1-2008 under section 132 of the Act. Subsequently, notice under section 153A of the Act was issued on 23-9-2008 and, accordingly, assessment was concluded on 4-12-2009. This fact was, inadvertently, not brought to the notice of the Tribunal by both the parties at the time of the earlier hearing - held that - If the above plea of the Revenue is accepted, the CIT(A) s order which is in favour of assessee is untouched. For this reason also, this Miscellaneous Petition filed by the revenue becomes an empty formality and the same cannot be entertained. Further, when an order is passed by the Assessing Officer under section 143(3) of the Act, unless and otherwise barred by law, the appellate proceedings are set into motion by virtue of the Act, if one of the party or either party prefers an appeal. Limitations specified under the Act also come into play. In such circumstances, Tribunal is duty bound to adjudicate the case before it assuming jurisdiction. - Further referring the circular no. 7/2003, petition by revenue dismissed.

Summary

Issues involved:
- Appeal against deletion of addition made by Assessing Officer
- Error apparent on the face of the order passed by the Tribunal
- Jurisdictional issue due to existence of two live orders on the same issue and assessment year

Analysis:

1. Appeal against deletion of addition made by Assessing Officer:
The Revenue appealed against the deletion of an addition made by the Assessing Officer on account of excess payment to laborers. The crux of the issue was whether the entire payment was made out of business expediency. The Tribunal, after hearing both parties, upheld the decision of the CIT(A) based on a ruling of the Hon'ble Karnataka High Court. The Revenue contended that a subsequent search and assessment order under section 153A of the Act should have been considered, which was inadvertently not brought to the notice of the Tribunal during the earlier hearing. The Revenue relied on various case laws to support their argument.

2. Error apparent on the face of the order passed by the Tribunal:
The Revenue argued that there was an error apparent on the face of the Tribunal's order dated 30-6-2010 due to the existence of two live orders - one under section 143(3) and the other under section 153A of the Act - on the same issue and assessment year. The Revenue contended that the Tribunal should rectify the order as the subsequent search and assessment order under section 153A of the Act affected the jurisdiction of the appellate proceedings. The Tribunal analyzed the provisions of section 153A and concluded that there was no mistake apparent on the face of the order passed by the Tribunal. The Tribunal noted a jurisdictional issue arising from the Act's silence on how to deal with appellate proceedings in such circumstances.

3. Jurisdictional issue due to existence of two live orders:
The Tribunal addressed the jurisdictional issue arising from the existence of two live orders on the same issue and assessment year. The Tribunal emphasized that the Act did not provide clarity on how to handle appellate proceedings in such situations. The Tribunal highlighted that the essence of the Miscellaneous Petition was beyond its jurisdiction to decide the appeal, as the subject matter had already been considered in the assessment completed under section 153A. The Tribunal dismissed the Revenue's Miscellaneous Petition, emphasizing that the CIT(A)'s order in favor of the assessee remained untouched.

In conclusion, the Tribunal dismissed the Revenue's Miscellaneous Petition, emphasizing the lack of jurisdiction to decide the appeal due to the existence of two live orders on the same issue and assessment year. The Tribunal highlighted the jurisdictional issues arising from the Act's silence on handling appellate proceedings in such circumstances and upheld the decision in favor of the assessee based on the rulings and legal propositions involved.