2015 (6) TMI 1241 - AT - Income Tax

Revision u/s 263 - CIT set aside the assessment only for limited purpose of arriving at correct taxable income from financing business of the assessee - HELD THAT - CIT has not set aside the entire assessment for doing afresh the additions/disallowances made thereon. Thus, the contention of the assessee that appeal should have been treated as infructuous is not correct. This ground of appeal is rejected. Assessment u/s 144 - assessee submits that assessment was completed under section 144 of the Act without giving sufficient opportunity - Commissioner of Income Tax (Appeals) partly allowed the appeal of the assessee by recomputing the income at ₹ 54,84,356/-. Commissioner of Income Tax (Appeals) deleted being mistake in calculation of loss as income in respect of Insight Share Brokers Ltd., mistaken calculation of M/s. Share Khan Pvt. Ltd. and finally on account of closing balance - On going through the orders of lower authorities, we are of the considered view that the additions/disallowances made by the Assessing Officer have been partly confirmed by the CIT(Appeals) without properly going into the submissions and merits of the explanation of the assessee and evidences available on record. Thus, we restore the issue to the file of the Assessing Officer for considering the issue afresh in accordance with law by providing adequate opportunity to the assessee. The assessee shall provide necessary details and cooperate with the proceedings for completion of assessment. In the case of assessee s wife Smt.N.Pappi the additions made and penalty levied based on the findings in the case of the assessee Mr. A.Natarajan. Since the issues in the case of Mr. A.Natarajan have been remitted to the file of the AO for fresh consideration, we are inclined to set aside the issues in the case of Smt. N.Pappi also to the file of the AO who shall consider the issues afresh in accordance with law after providing adequate opportunity to the assessee. Penalty orders under section 271(1)(c) of the Act in both the assessee's cases are also set aside to the file of the Assessing Officer and the Assessing Officer is free to redo the penalty proceedings after passing consequential orders. Appeals of the assessees are partly allowed for statistical purposes.

Summary

Issues:
Appeal against assessment orders under section 144 of the Income Tax Act for the assessment year 2004-05; Whether appeal should be treated as infructuous due to the setting aside of the assessment under section 263; Various disallowances and additions made in the assessment; Assessment under section 144 without sufficient opportunity; Validity of additions based on findings in another case; Penalty appeals and remand to the Assessing Officer.

Analysis:
The appeals were filed against assessment orders under section 144 of the Income Tax Act for the assessment year 2004-05. The first issue raised was whether the appeal should be considered infructuous due to the assessment being set aside under section 263. The Commissioner of Income Tax had set aside the assessment for a limited purpose, not the entire assessment, so the appeal was not deemed infructuous. The grounds for various disallowances and additions made by the Assessing Officer were then considered. The Commissioner partly allowed the appeal by recomputing the income but confirmed some additions without properly evaluating the submissions and evidence. Consequently, the issues were remitted back to the Assessing Officer for fresh consideration, providing the assessee with an opportunity to present necessary details.

In another aspect, the assessment under section 144 was challenged for being completed without adequate opportunity. The Commissioner enhanced the assessment without proper consideration of the facts, leading to the issue being sent back to the Assessing Officer for a fresh examination. Additionally, the validity of additions in one case based on findings in another case was raised. As the issues in the related case were remitted for reconsideration, the issues in this case were also set aside for fresh examination by the Assessing Officer.

Regarding penalty appeals, the penalty orders under section 271(1)(c) were set aside to the Assessing Officer's file for reconsideration after passing consequential orders. Ultimately, the appeals of the assessees were partly allowed for statistical purposes, with the orders pronounced in the open court on 26th June 2015.