2015 (8) TMI 53 - HC - Income Tax

Power of the AO to pass the Order - CIT(A) held that the Assessment Order dated 21st January 2010 for AY 1998-99 had attained finality and thus the AO had no jurisdiction to pass another Assessment Order for the same Assessment Year confirmed by ITAT - Revenue contends that the order dated 20th January 2010 was a mistake as the AO had not implemented the directions of the Tribunal to re-examine the nature of relevant expenditure incurred by the Assesse - Held that - A plain reading of the language of Section 292B of the Act indicates that it would have no application in the facts and circumstances of the present case. First and foremost Section 292B of the Act cannot be read to confer jurisdiction on the AO where none exists. The said Section only protects return of income assessment notice summons or other proceedings from any mistake in such return of income assessment notices summons or other proceedings provided the same are in substance and in effect in conformity with the intent of purposes of the Act. Learned counsel appearing for the Revenue has been unable to point out any mistake or omission in the AOs order dated 19th November 2010. The issue involved is not about a mistake in the said Order but the power of the AO to pass the Order. Clearly the said Order is not in accordance with provisions of the Act as the AO has no power to frame the assessment in respect of an AY which has already been finalised and concluded. The language of Section 292B of the Act also offers no assistance to the Revenue in its contention that AO s order dated 20th January 2010 was a mistake. Unable to accept that the AO s order dated 20th January 2010 was only an administrative order to give effect to the order of the Tribunal. At this stage it is also relevant to note that the order dated 20th January 2010 was captioned as Order u/s 254/250/147/143(3) of the Income Tax Act 1961 . It is thus apparent that the Order itself indicated that it was not an administrative order but an Assessment Order under Section 143(3) of the Act. In the circumstances it is not be open for the Revenue to contend to the contrary. - Decided against revenue.

Summary

Issues:
1. Jurisdiction of the Assessing Officer to pass multiple Assessment Orders for the same Assessment Year.
2. Interpretation of Section 292B of the Income Tax Act.
3. Nature of the Assessing Officer's order in implementing Tribunal's directions.

Analysis:
1. The primary issue in this case was the jurisdiction of the Assessing Officer (AO) to pass multiple Assessment Orders for the same Assessment Year. The Tribunal upheld that once an Assessment Order had attained finality, the AO cannot pass another Assessment Order unless fresh proceedings are initiated under specific sections of the Income Tax Act. The AO's second Assessment Order dated 19th November, 2010, was deemed unauthorized as it did not follow the prescribed procedure. The Tribunal's decision was supported by the fact that no fresh proceedings under relevant sections were initiated, making the second order invalid.

2. The interpretation of Section 292B of the Income Tax Act was crucial in this case. Section 292B protects returns, assessments, notices, or other proceedings from being deemed invalid due to mistakes, defects, or omissions if they align with the intent of the Act. The Court clarified that this section does not confer jurisdiction where none exists. In this case, the AO's second Assessment Order was not in accordance with the Act as it was passed for an Assessment Year that had already been concluded. Therefore, Section 292B did not apply to validate the second order.

3. The nature of the AO's order in implementing the Tribunal's directions was also debated. The AO's order dated 20th January, 2010, was challenged as being an administrative order to comply with the Tribunal's directions. However, the Court emphasized that the AO's function is to make assessments under specific sections of the Act, not administrative orders. The order dated 20th January, 2010, was explicitly labeled as an Assessment Order under Section 143(3) of the Act, indicating its nature. The Court rejected the argument that it was merely an administrative order and upheld that it was an Assessment Order.

In conclusion, the Court dismissed the appeal, stating that no substantial question of law arose in the case. The judgment emphasized the importance of following due procedure and maintaining the jurisdictional boundaries of the Assessing Officer while interpreting relevant provisions of the Income Tax Act.