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2012 (4) TMI 192 - HC - Income TaxValidity of order of Tribunal setting aside the entire dis-allowance of Rs 28.69 lacs in respect of Bad debts to the file of A.O. to decide fresh when assessee had withdrawn its appeal before the Tribunal against the order of CIT upholding disallowance of Rs 14.96 lacs only appeal before Tribunal barred by limitation - assessee withdrew its appeal during the hearing and sought to press in aid the provisions of Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963 Held that - Under Rule 27 the Respondent is permitted to support the order appealed against, though he may not have appealed against the order, on any of the grounds decided against him which renders that Assessee would be entitled to urge that the deletion of the disallowance of Rs.13.73 lacs by the CIT(A) was correct and proper. Assessee, however, would not be entitled to avail of the benefit of the provisions of Rule 27 in regard disallowance of Rs.14.96 lacs confirmed by CIT(A). Therefore, Tribunal erred in setting aside the order of the CIT(A) in its entirety. Order of the Tribunal would have to be confirmed only to the extent to which it restores the proceedings to the Assessing Officer as regards the amount of Rs.13.73 lacs Decided in favor of Revenue.
Issues:
1. Disallowance of bad debts claimed by the Assessee under Section 36(2) of the Income Tax Act, 1961. 2. Appeal filed by the Assessee being barred by limitation. 3. Application of Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963. 4. Tribunal's decision to set aside the order of the Commissioner of Income Tax (Appeals) and restore the proceedings to the Assessing Officer. Analysis: 1. The Assessee claimed bad debts amounting to Rs.28,69,951 under Section 36(2) of the Income Tax Act, 1961. The Assessing Officer disallowed this claim, which was confirmed by the Commissioner of Income Tax (Appeals) to the extent of Rs.14,96,064. However, the Assessee was allowed relief of Rs.13,73,887 under Section 36(2). 2. The Assessee's appeal against the Commissioner of Income Tax (Appeals) was barred by a delay of 551 days. The Assessee withdrew the appeal during the Tribunal hearing but sought to raise grounds under Rule 27 of the Income Tax (Appellate Tribunal) Rules, 1963. 3. Rule 27 allows the Respondent to support the order appealed against on any grounds decided against them. The Assessee, having withdrawn the appeal, could only support the order of the Commissioner of Income Tax (Appeals) on grounds decided against them, specifically the deletion of disallowance to the extent of Rs.13,73,887. 4. The Tribunal set aside the order of the Commissioner of Income Tax (Appeals) in its entirety and directed the proceedings back to the Assessing Officer for the disallowance of Rs.28,69,951. The High Court held that the Tribunal erred in doing so and confirmed the Tribunal's decision only to the extent of restoring the proceedings to the Assessing Officer regarding the amount of Rs.13,73,887. The Court ruled in favor of the Revenue and against the Assessee on the substantial question of law. 5. The Court left it open for the Assessee to adopt any available legal proceedings or remedies regarding the withdrawn appeal. No costs were awarded, and the Appeal was disposed of accordingly.
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