2017 (8) TMI 40 - HC - Income Tax

Exemption from applicability of provisions of Section 115JB - Held that - It is a matter of record that assessment order was passed by the Assessing Officer. The same was taken up in appeal before the Commissioner and thereafter before the Tribunal. The Tribunal under its order dated 22nd October 2009 remitted the matter to the Assessing Officer with the limited directions to the Assessing Officer to exclude profit on sale of investments from income of the assessee liable to be taxed. Save and except the above, no further directions were given by the Tribunal empowering the Assessing Officer to reopen the whole assessment. In the earlier assessment order, the Assessing Officer had never raised up any issue with regard to Section 115JB nor the same was the subject matter in issue in appeal before the Commissioner or before the Tribunal, nor the order of remand empowered the Assessing Officer to do so. It was not open for the Assessing Officer to travel beyond the directions of the Appellate authority. The Assessing Officer, as such, exceeded his jurisdiction, while considering the issue under Section 115JB. No substantial question of law

Summary

Issues:
Interpretation of Section 115JB - Scope of Assessing Officer's authority on remand

Analysis:

The judgment by the Bombay High Court pertains to the Assessment Year 2002-2003 and involves a dispute regarding the applicability of Section 115JB of the Income Tax Act. The appellant argued that the Tribunal erred in exempting the assessee from the provisions of Section 115JB. The appellant contended that the Assessing Officer had considered all aspects of the matter after the Tribunal remitted it back, and the Tribunal should not have interfered. On the other hand, the respondent supported the order, stating that the Assessing Officer exceeded the scope of the remand order.

Upon considering the submissions, the Court noted that the Assessing Officer had initially passed the assessment order, which was then appealed before the Commissioner and the Tribunal. The Tribunal, in its order, remitted the matter back to the Assessing Officer with limited directions to exclude profit on the sale of investments from the assessee's taxable income. The Court emphasized that apart from this specific direction, the Tribunal did not empower the Assessing Officer to reopen the entire assessment or address the issue of Section 115JB.

The Court concluded that the Assessing Officer had overstepped his jurisdiction by delving into the Section 115JB issue, as it was not part of the original assessment order, nor was it raised during the appeal process. Therefore, the Assessing Officer's actions were deemed to be beyond the directions of the Appellate authority, resulting in an excess of jurisdiction. Consequently, the Court held that no substantial question of law arose from the matter and dismissed the appeal without costs.