2015 (12) TMI 130 - AT - Income Tax

Jurisdiction of the Joint Commissioner of Income-tax without order u/s.120(4)(b) of the I.T.Act, 1961 - Held that - The definition of the Assessing Officer under Section 2 7(A) includes the Joint Commissioner of Income Tax. In a case which falls under proviso to Section 127(1) of the then Act, which deals with transfer from one Assessing Officer to another Assessing Officer of the same city, locality or place, no opportunity need to be given to the assessee and consequently there is no need to record reasons for transfer See M/s Karandhai Tamil Sangam Versus The Commissioner of Income Tax-II 2011 (8) TMI 324 - MADRAS HIGH COURT - Decided against assessee. Addition on account of sale of milk, rental receipts and interest income in the assessment order passed u/s.144 - Held that - Admittedly, in this case, the assessment was framed for all the impugned assessment years, ex parte, u/s.144 of the Act and the AO made various additions by estimating the income from sale of milk, rental receipts and interest income. The same was confirmed by the CIT(Appeals) without passing a speaking order. He has not given any reason for confirming the same, which is not proper. Therefore, it is appropriate to remit the issue to the file of the AO for fresh consideration. Accordingly, we remit the issues relating to addition on account of sale of milk, rental receipts and interest income to the file of the AO for fresh consideration after giving adequate opportunity of being heard to the assessee. - Decided in favour of assessee for statistical purposes.

Summary

Issues:
1. Assumption of jurisdiction by the Joint Commissioner of Income-tax without order u/s.120(4)(b) of the I.T.Act, 1961.
2. Confirming additions made by the Assessing Officer ex parte in the assessment order passed u/s.144 of the Act.

Issue 1: Assumption of Jurisdiction without Order u/s.120(4)(b) of the I.T.Act, 1961:
The appeals by the assessee were against the common order of the Commissioner of Income-tax(Appeals) for multiple assessment years. The primary legal issue was the assumption of jurisdiction by the Joint Commissioner of Income-tax without an order u/s.120(4)(b) of the Act. The assessee argued that the JCIT framed assessments without the required order, citing a previous case as a reference. The High Court's decision in the referenced case clarified the distinction between various sections of the Act regarding transfers of cases. The Court emphasized that for transfers within the same city, locality, or place, no specific reasons need to be recorded, as per Section 127(3) of the Act. The Court also highlighted previous judgments to support this interpretation, dismissing the petitioner's claims. Therefore, the Tribunal decided to dismiss this ground of appeal based on the High Court's decision and established legal principles.

Issue 2: Confirming Additions Made by the Assessing Officer Ex Parte:
The second legal issue concerned the additions made by the Assessing Officer ex parte in the assessment order passed u/s.144 of the Act, which were confirmed by the CIT(Appeals) without providing a detailed explanation. The Tribunal observed that the additions were based on estimations of income from various sources. However, the CIT(Appeals) did not justify the confirmation of these additions with a speaking order, leading to a lack of proper reasoning. Consequently, the Tribunal decided to remit the issues related to these additions back to the Assessing Officer for fresh consideration. The AO was directed to provide the assessee with a fair opportunity to be heard and complete the assessment within three months. Failure to cooperate could result in adverse inferences drawn by the AO to conclude the assessment in compliance with the law. As a result, the appeal of the assessee was partly allowed for statistical purposes.

In conclusion, the judgment addressed the issues of jurisdiction assumption without the required order and the confirmation of additions made ex parte in a comprehensive manner, ensuring adherence to legal provisions and principles. The Tribunal's decision provided clarity on the legal aspects involved and outlined the necessary steps for further assessment proceedings.