2015 (6) TMI 99 - HC - Income Tax

Non-service of notice or otherwise under Section 143(2) - Held that - The decision of the Tribunal to remand the matter on the limited issue of giving findings of fact appears to be unassailable considering that a pure question of law recently settled by the Supreme Court in the case of Assistant Commissioner, Income Tax & another Vs. Hotel Blue Moon & Ors 2010 (2) TMI 1 - SUPREME COURT OF INDIA has been raised by the assessee before the Tribunal but there being no finding of fact on the question of valid service of notice under Section 143(2) within the period of limitation provided under the Act, the said pure question of law could not have been decided in the absence of first there being finding of fact regarding the service or non-service of notice under Section 143(2) of the Act. No ground to interfere with the order of the Tribunal

Summary

Issues:
Appeal against order of Income Tax Appellate Tribunal for block period 1991-92 to 7.6.2000 - Validity of notice under Section 143(2) of Income Tax Act - Remand by Tribunal for adjudication - Permission to raise new issues before Tribunal - Assailing Tribunal's order.

Analysis:
The judgment pertains to an appeal filed against the order of the Income Tax Appellate Tribunal for the block period 1991-92 to 7.6.2000. The key issue raised by the assessee before the Tribunal was the absence of a notice under Section 143(2) of the Income Tax Act, citing a Supreme Court decision. The Tribunal, noting the lack of factual findings on the notice issue, remanded the case to the CIT (Appeal) for further examination in light of the Supreme Court decision. The Tribunal emphasized that the issue of notice was fundamental to the case and directed that if the objection on notice was incorrect, the other grounds raised by the assessee would be considered. The same procedure was outlined for the Revenue's appeal as well.

The Standing Counsel for the Income Tax Department contested the Tribunal's decision, arguing that the notice issue was not raised before the CIT (Appeal) and should not have been introduced for the first time at the Tribunal level. However, the High Court found the Tribunal's decision to remand the case for factual findings on the notice issue to be justified. The Court reasoned that a pure question of law raised by the assessee required factual determination on the service of notice under Section 143(2) within the statutory limitation period before a legal decision could be made. As such, the Court upheld the Tribunal's order and dismissed the appeal, finding no grounds for interference.

In conclusion, the High Court affirmed the Tribunal's decision to remand the case for factual findings on the notice issue, emphasizing the necessity of establishing facts before addressing legal questions. The judgment underscores the importance of procedural compliance and factual clarity in tax matters, highlighting the significance of addressing foundational issues before delving into legal interpretations.