2014 (3) TMI 806 - HC - Income Tax

Cancellation of block assessment u/s 158BC of the Act - Whether the Tribunal committed error in rejecting the Revenue s appeal confirming the decision of the CIT(A) Earlier order of the ITAT was not challenged by the revenue - Held that - In the order dated April 26, 2013, all that the Tribunal has done is to confirm the decision of CIT (A) when it was found that there was no dispute about non-issuance of notice u/s 143(2) of the Act to the assessee - The Commissioner only followed the direction and when found that no such notice was issued - The Revenue, if at all, was perturbed by the directions of the Tribunal in the order dated May 16, 2008, should have challenged the same - Admittedly, this was not done. In that view of the matter, there was consequential order passed by the Commissioner (Appeals), which was in term confirmed by the Tribunal the contentions of the revenue could not be accepted because it would lead to challenge the order, which was not done Decided against Revenue.

Summary

Issues:
1. Validity of assessment order u/s 158BC of the Income Tax Act.
2. Requirement of issuing notice u/s 143(2) of the Income Tax Act.

Issue 1: Validity of assessment order u/s 158BC of the Income Tax Act:
The case involved the block assessment period from April 1, 1989, to March 28, 2000, with the Revenue appealing against the Tribunal's judgment. The Tribunal had previously directed the CIT(A) to verify the issuance of notice u/s 143(2) within the prescribed time limit. The Appellate Commissioner, in a subsequent order, canceled the assessment order due to the notice u/s 142(1) not being issued within a year of filing the block return. The Tribunal, in the second round, upheld the cancellation of the assessment order, emphasizing the importance of the notice u/s 143(2) and the specific directions given by the Tribunal in the earlier order. The Tribunal dismissed the Revenue's appeal, citing the necessity of adherence to the Tribunal's directions and legal precedents.

Issue 2: Requirement of issuing notice u/s 143(2) of the Income Tax Act:
The Tribunal confirmed the decision of the CIT(A) based on the non-issuance of notice u/s 143(2) to the assessee. The Tribunal emphasized that the Revenue had not demonstrated the issuance of the notice as per statutory provisions, leading to the cancellation of the assessment orders. The Tribunal highlighted the importance of following superior authorities' directions in the judicial hierarchy and cited legal precedents to support the decision. The Tribunal rejected the Revenue's appeal, indicating that the CIT(A) acted in line with the Tribunal's directions, resulting in the dismissal of the Revenue's appeals. The Tribunal's decision was based on the lack of dispute regarding the non-issuance of the notice u/s 143(2) and the subsequent invalidity of the assessment proceedings.

In conclusion, the Tribunal's decision focused on the procedural compliance related to the assessment orders under the Income Tax Act, emphasizing the significance of issuing notices within prescribed time limits and following judicial directions. The dismissal of the Revenue's appeal underscored the importance of adhering to legal requirements and established precedents in tax assessment matters.