2014 (9) TMI 757 - HC - Income Tax

Validity of block assessment Limitation of passing of the order in case of search u/s 132 - Held that - Following the decision in assessee s own case for the earlier assessment year, it has been decided in The Deputy Commissioner of Income Tax, Central Circle II(1) Versus M/s. Rakesh Sarin And Others 2013 (11) TMI 577 - MADRAS HIGH COURT - the block assessment was not barred by limitation the matter is to be remitted back to the Tribunal to decide on issues other than the point of limitation Decided in favour of revenue.

Summary

Issues:
1. Jurisdiction of block assessment
2. Dismissal of appeal without considering merits
3. Deletion of additions without considering merits

Analysis:

Issue 1: Jurisdiction of block assessment
The High Court addressed the challenge to the order of the Income Tax Appellate Tribunal regarding the jurisdiction of block assessment for the assessment years 2008-2009 and 2009-2010. The Tribunal had dismissed the appeal of the department based on the High Court's previous ruling that the block assessment was without jurisdiction. However, the High Court had stayed this order in W.A.No.874 of 2011. Subsequently, the High Court allowed the revenue's appeal in W.A.No.874 of 2011, stating that the block assessment was not barred by limitation. Additionally, a Division Bench of the High Court allowed the appeal in the assessee's case for block assessment years 1997-1998 to 2002-2003, remitting the matter to the Tribunal for further consideration. Therefore, the High Court set aside the Tribunal's order and remitted the matter for consideration of issues other than the point of limitation on merits.

Issue 2: Dismissal of appeal without considering merits
The High Court noted that the Tribunal had dismissed the department's appeal without delving into the merits of the case or the grounds raised. This was concerning, especially when the First Bench of the High Court had admitted W.A.No.874 of 2011. The High Court emphasized the importance of considering the merits of the case before making a decision, highlighting the need for a thorough examination of the grounds raised by the department. The Tribunal's failure to address the merits of the case was a key factor in the High Court's decision to set aside the Tribunal's order.

Issue 3: Deletion of additions without considering merits
The High Court also addressed the deletion of additions made by the assessing officer by the Tribunal without considering the issues raised on merits. It was crucial for the Tribunal to thoroughly evaluate the grounds and arguments presented by both parties before making a decision on the additions. The High Court emphasized the importance of a detailed analysis of the issues raised on merits to ensure a fair and just outcome. As a result, the High Court set aside the Tribunal's decision and remitted the matter for a comprehensive consideration of the issues other than the point of limitation on merits.