2012 (12) TMI 754 - AT - Income Tax

Setting Aside of Assessment u/s 263 Held that - Appeals filed by the assessee for both the years were on substantially different issues, vis- -vis the issues for which proceedings under Section 263 were initiated and completed by the Commissioner of Income Tax, therefore CIT(Appeals) was obliged under law to deal with the grounds taken by assessee for the respective Assessment Years, since orders under Section.263 did not cover these aspects. Set aside the orders of the CIT(Appeals) for both the Assessment Years and remit the matter back to him for re consideration - appeals of the assessee for both the years allowed for statistical purposes.

Summary

Issues: Appeals filed against order dated 24.02.11 of Commissioner of Income Tax for Assessment Years 2006-07 & 2007-08, delay in filing appeals, grounds challenging dismissal of appeals, discrepancies in assessment orders under Section 143(3) and Section 263, failure to adjudicate on relevant grounds by Commissioner of Income Tax(Appeals), differences in issues raised by assessee and Commissioner of Income Tax.

Analysis:
1. Delay Condonation and Admission of Appeals:
The appeals were filed with a delay of 34 days, and a condonation petition was submitted by the assessee. The delay was condoned, and the appeals were admitted after satisfactory reasons were presented.

2. Grounds of Appeal:
The grounds taken for both years challenged the dismissal of the appeals by the Commissioner of Income Tax(Appeals) as infructuous due to the setting aside of assessment orders under Section 263. The appellant argued that the orders were erroneous against the law and the facts of the case, emphasizing the need for a reconsideration of the appeal.

3. Discrepancies in Assessment Orders:
The original assessments for the years under Section 143(3) were set aside by the Commissioner of Income Tax-II for not examining certain aspects. The Commissioner of Income Tax(Appeals) dismissed the appeals based on the setting aside of the assessments under Section 263, leading to discrepancies in the assessment process.

4. Issues Raised by Assessee and Commissioner of Income Tax:
The Authorised Representative contended that the issues raised in the appeals differed from those addressed under Section 263. The Commissioner of Income Tax(Appeals) failed to adjudicate on the grounds relevant to the original appeals, prompting the need for reconsideration of the matter.

5. Assessment Year 2006-07 and 2007-08:
The detailed issues for each assessment year were presented, highlighting specific discrepancies in expenses, disallowances, and investments. The Commissioner of Income Tax had set aside the assessments for different reasons, not covering the grounds raised by the assessee in their appeals.

6. Decision and Remittance:
Considering the substantial differences in the issues raised by the assessee and those addressed under Section 263, the Tribunal set aside the orders of the Commissioner of Income Tax(Appeals) for both assessment years. The matter was remitted back to the Commissioner of Income Tax(Appeals) for reconsideration in accordance with the law, and the appeals of the assessee were allowed for statistical purposes.