2021 (3) TMI 1322 - HC - Income Tax

Reopening of assessment u/s 147 - Whether Tribunal is right in law in quashing the notice under section 148 of the Act and pursuant to assessment under section 147 and read with 143(3) of the Act is valid? - HELD THAT - Ground No.1 i.e. with regard to reopening assessment under section 147 was given up by the assessee before the CIT(Appeals). Recording the submissions of the learned AR. the Commissioner of Income Tax (Appeals) dismissed the said ground. However the Income Tax Appellate Tribunal took into consideration the said ground which was given up by the assessee before the Commissioner of Income Tax (Appeals) and held against the Revenue. When the assessee themselves have given up the ground the Income Tax Appellate Tribunal should not have taken into consideration the said ground and given a finding as against the Revenue. The common order passed by the Tribunal cannot be sustained on this ground alone. We set aside the common order passed by the Income Tax Appellate Tribunal and remit the same to the Tribunal for fresh consideration. The Tribunal is directed to go into the merits of the matter and pass an order afresh on merits and in accordance with law.

Summary

Issues:
Challenging the order passed by the Income Tax Appellate Tribunal regarding the Assessment Year 2000-2001 on substantial questions of law.

Analysis:
The Revenue filed appeals against the common order dated 18.06.2010 passed by the Income Tax Appellate Tribunal, Chennai, in relation to the Assessment Year 2000-2001. The appeals were admitted based on substantial questions of law raised by the Revenue. The first question pertained to the validity of the notice under section 148 of the Income Tax Act and the subsequent assessment under sections 147 and 143(3) of the Act. The second question focused on the Tribunal's decision to allow the cross-appeal filed by the assessee despite a previous Supreme Court decision.

The Senior Standing Counsel for the appellant argued that the assessee had given up the ground related to reopening assessment under section 147 during the appeals before the Commissioner of Income Tax (Appeals). Despite this, the Income Tax Appellate Tribunal erroneously considered this ground, which had been abandoned by the assessee earlier. The Tribunal's decision went against the Revenue based on this ground that was no longer pursued by the assessee.

Upon review of the record, it was evident that the assessee had indeed abandoned the ground concerning the reopening of assessment under section 147 before the Commissioner of Income Tax (Appeals). Despite this, the Tribunal considered this ground and ruled against the Revenue. The Court found that the Tribunal should not have considered a ground that the assessee had given up, leading to an erroneous decision against the Revenue. Consequently, the Court set aside the Tribunal's order and remitted the matter back to the Tribunal for fresh consideration.

The Court directed the Tribunal to reexamine the case on its merits and issue a fresh order in accordance with the law. The Tax Case Appeals were allowed with the observation that the questions of law raised by the Revenue were left open for consideration in a suitable appeal, without imposing any costs.