2017 (1) TMI 1823 - AT - Income Tax

Estimation of income - bogus/unverifiable purchases - rejection of books of accounts - HELD THAT - AO had applied 25% gross profit rate on unverified purchases which has been confirmed by the ld. CIT(A) which was the subject matter of appeal before the Coordinate Bench who has set aside the issue relating to estimation of profits and restored the matter back to the file of the AO to decide the same afresh. From the perusal of records it is also noted that the provisions of Section 153(2A) of the Act were not brought to the notice of this Tribunal. We accordingly recall the order passed by the Coordinate Bench of this Tribunal 2015 (5) TMI 1253 - ITAT JAIPUR and direct the Registry to fix the matter for fresh hearing in due course.

Summary

Issues:
Recalling of ITAT order for fresh assessment after High Court judgment delivery. Application by revenue to set aside assessment for estimation of income on unverifiable purchases. Interpretation of Section 153(2A) regarding time limit for completing set-aside assessments.

Analysis:
The judgment pertains to a Misc. application filed by the revenue seeking to recall the ITAT order dated 25/05/2015 for A.Y. 2007-08. The revenue argued that setting aside the assessment for estimation of income on unverifiable purchases until the High Court judgment delivery is not justifiable, as it cannot be kept in abeyance indefinitely. The revenue contended that the AO must complete set-aside assessments within the time prescribed in Section 153(2A) of the IT Act, which is one year from the end of the financial year in which the ITAT order is received. The revenue highlighted that the Tribunal order inaccurately mentioned the Departmental Representative's acceptance of deciding the issue based on a specific judgment. The revenue sought rectification under section 254(2) of the IT Act by recalling the appeal order for a decision on merits. The revenue also referenced a similar issue decided by the ITAT in another case.

The Coordinate Bench had set aside the issue of estimation of profits and directed the matter back to the AO for fresh assessment after the High Court judgment delivery. The Coordinate Bench's order dated 8.10.2015 was recalled as the provisions of Section 153(2A) were not brought to the Tribunal's notice. The Tribunal decided to fix the matter for fresh hearing. The judgment emphasized the importance of adhering to the time limit for completing set-aside assessments as per the statutory provisions. The judgment highlighted the significance of accurate representation and adherence to procedural requirements in such matters to ensure fair and timely resolution.

The judgment delved into the interpretation of Section 153(2A) of the IT Act, emphasizing the statutory time limit for completing fresh assessments set aside by higher authorities. The Tribunal's decision to recall the order and set the matter for fresh hearing underscored the procedural diligence required in tax assessment proceedings. The judgment underscored the need for precise application of legal provisions and adherence to procedural requirements to ensure efficient and fair resolution of tax disputes. The judgment's detailed analysis of the statutory provisions and procedural aspects provided clarity on the Tribunal's decision-making process and the considerations involved in recalling and setting aside assessment orders for fresh evaluation.