2019 (1) TMI 1468 - HC - Income Tax

Reopening of assessment - Held that - With regard to assumption of jurisdiction under Section-147 of Income-tax Act is concerned, hereto we are of the view that the Tribunal did not consider the plea of the assessee with regard to the jurisdiction under Section-147 of the Income-tax Act. Hence, this question also requires to be considered by the Tribunal. The failure of the Tribunal to consider the question of jurisdiction has therefore led to miscarriage of justice. Under these circumstances, both the questions of law are held in favour of the assessee and against the Revenue, by holding that the order of the Tribunal is unsustainable, since it did not consider the grounds urged before it and has committed an error in not considering the contention of the assessee with regard to the question of assumption of jurisdiction under Section-147

Issues:
1. Failure to file income tax return for the assessment year 1999-2000 leading to reopening of the case under Section-147 of the Income-tax Act.
2. Discrepancy in the declared income by the assessee and the assessment made by the Income Tax Officer.
3. Appeals filed before the Commissioner of Income Tax (Appeals) and the Tribunal regarding quantification and jurisdiction issues.
4. Validity of the Tribunal's order and consideration of all grounds and arguments presented.
5. Questioning the assumption of jurisdiction under Section-147 and the issue of notice under Section-148 of the Income-tax Act.

Detailed Analysis:

1. The assessee failed to file an income tax return for the assessment year 1999-2000, which led to the case being reopened under Section-147 of the Income-tax Act. The assessee had received a family pension and declared rental income before the Municipal Corporation. The Income Tax Officer assessed the total income at a significantly higher amount than declared by the assessee.

2. Appeals were filed before the Commissioner of Income Tax (Appeals) and the Tribunal regarding the quantification of income and jurisdiction issues. The Tribunal remanded the matter for quantification but ruled against the assessee on the question of jurisdiction. This led to the filing of further appeals.

3. The substantial questions of law raised in the appeals focused on the validity of the Tribunal's order and whether all grounds and arguments presented were adequately considered. The Tribunal's decision was challenged for not providing detailed reasons for its conclusions and disposing of the matter in a single sentence, which was deemed inappropriate.

4. The Court held that the Tribunal had not properly considered the grounds and arguments presented by the assessee. It was noted that the Tribunal's acceptance of the Commissioner of Income Tax (Appeals) conclusion without proper reassessment was incorrect. The Tribunal was directed to reconsider the matter afresh.

5. Regarding the assumption of jurisdiction under Section-147 of the Income-tax Act, the Court found that the Tribunal had not adequately addressed the plea of the assessee on this issue. The failure to consider this question led to a miscarriage of justice, and the Court ruled in favor of the assessee on this point.

In conclusion, the Court held both substantial questions of law in favor of the assessee and against the Revenue. The Tribunal's order was deemed unsustainable for not considering all grounds and for failing to address the jurisdiction issue properly. The matter was remanded to the Tribunal for a fresh consideration in accordance with the law on both issues, with all contentions being kept open.

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