2019 (5) TMI 356 - HC - Income Tax

Reopening of assessment u/s 147 - dispute regarding effective service of notice u/s 148(1) - substantial question of law - Tribunal relegated the matter to the Assessing Officer to examine the matter afresh - HELD THAT - In the order under appeal the Tribunal having taken note of the fact that the assessee's had a very little time to put forth their defense, set-aside the impugned order; and had directed the assessing officer to examine the matter afresh, leaving it open to the assessees to raise all such contentions as were available to them in law. Exercise of discretion by the Tribunal, to remand the matter to the Assessiong Officer, cannot be said to have caused prejudice to the assessees. 9. Interference, in proceedings under Section 260-A of the Act, is warranted against the order of the Tribunal, only if the said order gives rise to a substantial question of law. The order under appeal, whereby the assessment order was set-aside and the Assessing Officer was directed to examine the matter afresh, leaving it open to the assessee's to put forth their defense on all aspects, does not give rise to any such substantial question of law warranting an appeal, under Section 260-A of the Act, being entertained. Appeal dismissed.

Issues:
1. Appeal against order passed by Income Tax Appellate Tribunal remanding the matter to Assessing Officer.
2. Validity of notice issued under Section 148 of the Income Tax Act.
3. Tribunal's discretion to remand the matter to Assessing Officer.
4. Substantial question of law warranting an appeal under Section 260-A of the Act.

Analysis:

1. The appeals were filed against the order passed by the Income Tax Appellate Tribunal (ITAT) remanding the matter to the Assessing Officer for fresh consideration. The assessees had initially filed their income tax return for the Assessment Year 2009-10, but proceedings under Section 147 of the Income Tax Act were initiated as some income had allegedly escaped assessment. The ITAT directed the Assessing Officer to provide the assessees with an opportunity to present their defense on all aspects, as per the High Court's directions.

2. The assessees had challenged the notice issued under Section 148 of the Act through Writ Petitions, which were dismissed by the High Court. The Division Bench later observed that the assessees could raise their contentions before the statutory authority, i.e., the Assessing Officer. The Tribunal acknowledged the time constraints faced by the assessees in presenting their defense effectively due to the short period between the High Court's order and the assessment completion date.

3. The Tribunal exercised its discretion to set aside the assessment order and remand the matter to the Assessing Officer, allowing the assessees to raise all legal contentions before him. This decision was based on the fact that the assessees were unable to approach the Assessing Officer before the revised assessment orders were passed, leading them to appeal to the Commission of Income Tax (Appeals) and subsequently to the ITAT.

4. The only submission made before the Court was regarding the Tribunal's decision to remand the matter to the Assessing Officer instead of determining the factual dispute regarding the effective service of the notice under Section 148(1) of the Act. The Court noted that the Tribunal's exercise of discretion did not prejudice the assessees, as they were given the opportunity to present their defense on all aspects before the Assessing Officer.

5. Ultimately, the Court held that the order under appeal did not give rise to any substantial question of law warranting an appeal under Section 260-A of the Act. Therefore, the appeals were dismissed, emphasizing that the exercise of discretion by the Tribunal to remand the matter to the Assessing Officer was not prejudicial to the assessees.

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