2012 (7) TMI 314 - HC - Income Tax

Rejection of cross-objections being time barred - cross-objection that ITAT had not issued notice and that the appellant became aware of the pendency of the remitted appeals only upon noticing them in the cause list - Held that - Tribunal could not have rejected the cross-objections without entering into the factual matrix and being satisfied itself that the appellant had not in fact filed cross-objections at the time when it could have originally when the appeals had been filed before the ITAT - the impugned order itself appears to have proceeded on the assumption that the assessee did not choose to file cross-objections despite service of notice whereas the assessee s argument is that notice in fact was not served even after remand from this Court and that the cross-objection was filed since the pendency of appeals was noticed. Thus, the Tribunal could have examined whether the cross objections could be entertained in the facts and circumstances of the case having regard to the independent power to entertain them contained u/s 253 (5) - direction to consider cross-objections after giving due notice to the parties - in favour of assessee.

Summary

Issues Involved:
1. Whether the Tribunal erred in holding the Appellant's cross-objections under Section-253 (4) of the Income Tax Act as barred.

Analysis:
1. The case involved the Appellant objecting to the assumption of jurisdiction by the Assessing Officer (A.O.) under Section-147 of the Income Tax Act and challenging the addition of certain amounts on merits. The Commissioner of Appeals upheld the order on jurisdiction but accepted the appeal on merits. The matter was then taken to the ITAT, where the appellant did not file any appeal or cross-objections. There was a dispute regarding whether the notice of appeals was received by the appellant. The ITAT decided the appeals, and the matter was later brought before the High Court. The High Court's order directed the Tribunal to re-adjudicate the matter on specific issues related to Rule-46(A) and remand to the A.O.

2. Subsequently, the appellant filed cross-objections before the ITAT under Section-253 (4) of the Act. The Revenue objected to the cross-objection, leading to the dismissal of the cross-objections by the Tribunal. The Tribunal's reasoning included the view that its jurisdiction was limited to the directions given by the High Court and that no new issues could be considered at that stage. The Tribunal also cited legal principles to support its decision, emphasizing that the cross-objections filed after the High Court's decision were impermissible.

3. The High Court found that the Tribunal erred in rejecting the cross-objections without examining the factual matrix regarding the filing timeline and notice issuance. The High Court noted that the Tribunal should have considered whether the cross-objections could be entertained based on the circumstances and the independent power granted under Section-253 (5) of the Act. The High Court set aside the Tribunal's orders and directed the Tribunal to consider the cross-objections, allowing the parties to address any issues, including any delays in filing, with appropriate notice and affidavits.

4. Consequently, the High Court allowed the appeals to the extent of setting aside the Tribunal's orders and instructed the Tribunal to consider the cross-objections, giving the parties an opportunity to address any relevant contentions, including issues of delay in filing, with proper notice and affidavits.