2012 (6) TMI 538 - HC - Income Tax

Re-opening of assessment jurisdiction - assessing authority over-ruling the objections passed the reassessment order - appellate Commissioner set aside the said order and remanded the matter back to the assessing authority. Again after such remand, the assessing authority passed the assessment order which was again challenged by the assessee before the Appellate Commissioner who set aside the order on merits but did not go into the question of correctness of the re-opening of the assessment under Section 147 of the Act Held that - As the reassessment order has been set aside on merits and it has attained finality, the appellant cannot be said to be an aggrieved person who is entitled to prefer an appeal merely on the ground that the ground of jurisdiction has been held against the assessee. appeal dismissed.

Summary

Issues:
1. Re-opening of assessment under Section 147 of the Income Tax Act, 1961 challenged on jurisdiction and merits.
2. Appeal against the order of the Appellate Commissioner setting aside the reassessment order.
3. Dismissal of cross objections by the assessee regarding the validity of re-opening.
4. Miscellaneous petition filed for recalling the order dismissing the cross objection.

Analysis:

1. The appeal was filed against the order passed by the Tribunal rejecting the cross objection filed by the assessee and the Miscellaneous petition for correction of the error. The assessment order was re-opened under Section 147 of the Income Tax Act, 1961, and the assessee challenged this action on jurisdiction and merits. Despite objections, the reassessment order was passed by the assessing authority, leading the assessee to appeal. The Appellate Commissioner set aside the order and remanded the matter back to the assessing authority. After the reassessment, the Appellate Commissioner set aside the order on merits but did not address the correctness of the re-opening under Section 147. The revenue appealed against the Appellate Commissioner's decision, and the assessee filed cross objections regarding the re-opening issue, which were dismissed. Subsequently, a Miscellaneous petition was filed to recall the order dismissing the cross objection, which was also dismissed, prompting the present appeal.

2. The reassessment order was set aside on merits, and the assessee sought to challenge it on the grounds of jurisdiction as well, which was not accepted by the authorities. The appeal was filed specifically concerning the jurisdiction aspect of the order, as the reassessment order had already been set aside on merits and finalized. The court noted that since the reassessment order had been set aside on merits and reached finality, the appellant could not be considered an aggrieved party solely based on the jurisdiction issue. However, the court reserved liberty for the assessee to challenge the jurisdiction issue if faced with trouble from the department in future proceedings. Consequently, the court found no merit in the appeal and dismissed it.

In conclusion, the judgment addressed the challenges to the re-opening of assessment under Section 147, the setting aside of the reassessment order on merits, and the dismissal of cross objections by the assessee. The court emphasized the finality of the set-aside reassessment order on merits and the limited grounds for appeal based on jurisdiction alone. The liberty was granted for the assessee to raise jurisdictional issues in potential future proceedings, leading to the dismissal of the present appeal.