2012 (5) TMI 255 - HC - Income Tax

Recalling of ex parte order of the HC - held that - when power is exercised under Section 142A, exercise of such power cannot be held to be incompetent on the basis of the Law laid down by the Hon ble Supreme Court in Amiya Bala Paul (2003 (7) TMI 4 (SC)). In the circumstances, the first contention of the applicant to the effect that the order of this court holding that the order of the Tribunal is incorrect, in view of Amiya Bala Paul, is not sustainable. There is no dispute that the original assessments were made on or before 30th September 2004. There is also no dispute that the matter reached the Tribunal on or before 30th September 2004. At the same time, the judgment of the Tribunal was also rendered before 30th September 2004. However, the fact remains, within the period of limitation, an appeal against the judgment of the Tribunal was preferred before this court. The question in such circumstances is, whether, could it be said that the assessment was made before 30th September 2004. - held that - it could not be said that the assessment was made before 30th September 2004. It can only be said that the assessments was made on the date when the appeal was decided. Ordered recalled - matter remitted back to the Tribunal.

Summary

Issues:
1. Condonation of delay in filing the application for recalling the ex parte order.
2. Validity of the order passed by the court in light of the law governing the subject.
3. Application of Section 142A of the Income Tax Act in the assessment.
4. Interpretation of the Proviso in Section 142A regarding the timing of assessments and appeals.
5. Need for remand to the Tribunal for further consideration.

Analysis:

1. The judgment addresses the issue of condonation of delay in filing an application to recall an ex parte order. The court acknowledged the reasons provided for the delay were not convincing but allowed it due to the health conditions of the involved parties. The application for recalling the court's order was considered, as the appellant claimed the order was erroneous and needed to be revisited based on the applicable law.

2. The judgment delves into the validity of the court's order concerning the application of the law governing the subject matter. It discusses a case where the Assessing Officer added additional income to the assessee based on a Valuation Officer's report. The Tribunal's decision favored the assessee citing a Supreme Court judgment. However, the court analyzed Section 142A of the Income Tax Act and concluded that the Tribunal's decision was incorrect in light of the newly applicable law.

3. The application of Section 142A of the Income Tax Act in the assessment process is thoroughly examined in the judgment. The court emphasized that when the Assessing Officer exercises power under Section 142A, it cannot be deemed incompetent based on previous judgments. The interpretation of Section 142A's language led to the conclusion that the power exercised under it is valid and not affected by past decisions.

4. The judgment scrutinizes the interpretation of the Proviso in Section 142A regarding the timing of assessments and appeals. It addresses the argument that assessments concluded before a specified date should not be subject to Section 142A. The court disagreed with previous court decisions, emphasizing that an appeal is a continuation of the original proceeding, and the timing of the appeal filing determines when the assessment is considered made.

5. Lastly, the judgment discusses the need for remand to the Tribunal for further consideration. The court found merit in the contention that certain aspects of the case were not adequately addressed by the Tribunal. Therefore, the court recalled the order and remitted the matter back to the Tribunal for a more comprehensive review, focusing on the relevant grounds raised by the parties and the correct application of Section 142A in the case.