2013 (9) TMI 757 - HC - Income Tax

Where CIT(A) and ITAT had set aside the orders, can AO pass fresh orders? - Held that - The order passed against the assessee by the Punjab Mandi Board has been set aside, therefore, the order passed by the Assessing Officer is not warranted - The order passed under the 1961 Act which was foundation of order passed by the Assessing Officer has admittedly been set aside - Therefore, find no reason to hold that orders passed by the CIT(A) or the ITAT setting aside order passed by the Assessing Officer, suffer from any error of law or jurisdiction as would require interference - Fresh proceedings under the 1961 Act have led to passing of a fresh order against assessees, arrayed as respondents, holding them liable for payment of additional market fee, interest etc. Restored the matter to the Assessing Officer to proceed afresh and in accordance with law after considering orders passed under the 1961 Act and if permissible, frame a fresh assessment against the assessee.

Summary

Issues:
Adjudication of same questions of law for multiple ITAs involving the same assessee and another assessee, challenge to orders passed by CIT(A) and ITAT, consideration of fresh orders passed under the 1961 Act, determination of escaped income, restoration of matter to Assessing Officer for fresh assessment.

Analysis:
The High Court addressed the issues concerning the challenge to orders passed by the CIT(A) and ITAT in ITAs involving the same assessee and another assessee. The revenue contested the orders due to fresh orders passed under the 1961 Act indicating suppression of sales and evasion of income. The Court noted that the order under the 1961 Act, forming the basis of the Assessing Officer's decision, had been set aside. Consequently, the Court found no legal or jurisdictional errors in the orders by the CIT(A) and ITAT. However, acknowledging the fresh orders under the 1961 Act holding the assessees liable for additional fees, the Court directed the Assessing Officer to reassess the situation to determine if any income had escaped assessment or tax evasion had occurred.

The Court emphasized that the Assessing Officer should reconsider the fresh orders under the 1961 Act and proceed with a fresh assessment if needed. The matter was restored to the Assessing Officer for a reevaluation in accordance with the law. Specifically for ITA No.270 of 2012, the Assessing Officer was granted the liberty to frame an assessment as per the law if any adverse order was issued against the assessee under the 1961 Act. The Court affirmed the impugned orders, modifying the ITAT's order accordingly and disposing of the appeals in line with the provided directions.

In conclusion, the High Court's judgment focused on the legal implications of fresh orders under the 1961 Act on the assessment process, emphasizing the need for a reassessment by the Assessing Officer to address any potential income discrepancies or tax evasion issues. The decision aimed to ensure a fair and lawful evaluation of the assessee's tax liabilities based on the latest developments under the 1961 Act.