2015 (7) TMI 355 - AT - Income Tax

Validity of CIT s order passed u/s.251(1)(c) - appeal preferred before the CIT(A) is against the order of assessment i.e., re-assessment u/s.147 - whether CIT(A) in his wisdom specifically mentioned clause 251(1)(c), which does not apply to the proceedings pending before him? - Held that - CIT(A) has not adjudicated the issue at all in its correct perspective. While adjudicating the issue, it is his duty to examine the facts, verify the applicable law and give a decision based on facts and provisions of law. He cannot shirk his responsibility and direct the Assessing Officer to examine the issues and decide appeal accordingly. As rightly contended by the Revenue, the Assessing Officer does not have the power to re-visit the assessment again and cannot gain the power from the order of CIT(A), which is not according to the provisions of Income Tax Act, 1961. In view of this, we have no hesitation in setting aside the order of CIT(A) and restore the appeal to the file of CIT(A) to consider it afresh and pass appropriate order on merits after examining assessee s contentions. He should also give a finding whether the assessment was re-opened within four years or after four years and if so, should analyze the applicable case law and the provisions of the Act to give a finding whether assessment order can be upheld or not? If required, he should also give a finding in the merits on the additions made by Assessing Officer. With these observations, appeal before the CIT(A) is restored by setting aside the impugned order of the CIT(A). - Decided in favour of assessee and revenue for statistical purposes.

Summary

Issues involved:
- Interpretation of provisions under Section 251(1) of the Income Tax Act
- Validity of directions given by CIT(A) under Section 251(1)(c)
- Assessment reopening within four years or after four years
- Delegation of authority by CIT(A) to the Assessing Officer

Analysis:

1. Interpretation of provisions under Section 251(1) of the Income Tax Act:
The judgment involves a detailed analysis of the powers conferred upon the Commissioner (Appeals) under Section 251(1) of the Income Tax Act. The Tribunal emphasized that the CIT(A) has specific powers to confirm, reduce, enhance, or annul the assessment under Section 251(1)(a) in the case of an appeal against an order of assessment. The Tribunal highlighted the limitations of the CIT(A) to set aside any assessment or delegate the same to the Assessing Officer. The judgment underscored the importance of the CIT(A) examining and deciding issues within the scope of the powers conferred under Section 251(1)(a) only.

2. Validity of directions given by CIT(A) under Section 251(1)(c):
The judgment scrutinized the validity of the directions issued by the CIT(A) under Section 251(1)(c) in the context of an appeal against an order of assessment. The Tribunal pointed out that the CIT(A) should have invoked the powers under Section 251(1)(a) for appeals related to assessment orders. By specifically mentioning Section 251(1)(c) in the order, the CIT(A) deviated from the appropriate provisions, leading to a potential misapplication of powers. The judgment highlighted the need for the CIT(A) to adhere to the correct provisions while passing orders in appeal cases.

3. Assessment reopening within four years or after four years:
The judgment delved into the issue of the timing of assessment reopening, whether it was done within four years or after four years from the end of the assessment year. The Tribunal noted discrepancies in the records regarding the timing of the assessment reopening, which played a crucial role in the overall decision-making process. The judgment emphasized the significance of accurately determining the timeline of assessment reopening to ensure compliance with the provisions of the Income Tax Act.

4. Delegation of authority by CIT(A) to the Assessing Officer:
The judgment addressed the contentious issue of the CIT(A) delegating his jurisdiction to the Assessing Officer, particularly in the context of directing the Assessing Officer to examine another file and decide the appeal's outcome. The Tribunal highlighted that such delegation of authority to the Assessing Officer was not permissible under the provisions of the Income Tax Act. The judgment underscored the importance of the CIT(A) fulfilling his responsibility to examine and decide issues based on facts and applicable law without passing on the decision-making process to the Assessing Officer.

In conclusion, the judgment set aside the order of the CIT(A) and restored the appeal to the file of the CIT(A) for fresh adjudication on all issues, emphasizing the need for a thorough analysis of facts, applicable law, and a proper decision-making process in line with the provisions of the Income Tax Act.