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TMI Blog2010 (8) TMI 623X X X X Extracts X X X X X X X X Extracts X X X X ..... ) of the Act, to resolve the same. The point of difference which is agreed to by both the Members of Division Bench is as under : Whether, on the facts and in the circumstances of the case, is it open to the assessee to challenge the validity of re-assessment proceedings before the Tribunal in the second round of litigation, when in the first round, the Tribunal had remanded the order for limited purpose? 2. The assessee in this case is a firm engaged in the business of manufacturer and exporter of garments. The assessment year is 2001-02. The original assessment was completed on 31.3.2004 determining the total income at Rs. 9,16,870/- after allowing deduction under sec.80HHC to the extent of Rs. 4,25,650/-. Gross bank interest of Rs. 8,10,462/- was treated as income from other sources by the Assessing Officer. The assessee preferred an appeal before the CIT(A), taking as many as seven grounds. The ground No.1 is raised against the initiation of proceedings under sec.147 of the Act. The said ground read as under: The order of the Income Tax Officer, Ward-I(1), Tirupur is erroneous in law and unsustainable on the facts and circumstances of your appellant s case. Proceedings ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction under sec.148 of the Act. The notice issued under sec.148 in the first round itself was therefore, claimed to be bad in law. This view according to him was decided in its favour by the Jurisdictional High Court in the case of CIT v. Qatalys Software Technologies Ltd. 2008 TIOL 392 HC-Mad - IT. A copy of the order of the High Court was placed on records and also the decision of the Division Bench in the case of C.Vasantha v. ACIT in ITA nos.614 615/Mds/2007 wherein identical issue was involved were placed on record. The Assessing Officer when posed with this contention, was of the view that the Tribunal vide its order dated 17.11.2006 has only set aside the assessment and remitted the matter back to the file of the Assessing Officer to examine the purposes for which deposit was made with the bank and to find out the nexus of deposits with export business and decide the issues in accordance with law. According to him, the ITAT has not directed anything about the validity of proceedings u/s 147. The assessment is only to give effect to the order and question raised by the assessee on the validity of notice according to him was out of the purview of his order. The CIT(A) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ground relating to the initiation of proceedings under sec.147, it did not point out as to on what basis the objection is being raised. Secondly, and more importantly, even at the time of hearing, the assessee did not raise the issue as to why it is questioning the validity of action under sec.147 of the Act. The only inference that can be drawn from the conduct of the assessee is that it did not press the ground pertaining to the action under sec.147 of the Act. Had the assessee placed some material or mentioned some basis on which action under sec.147 is being challenged, the CIT (A) would have dealt with the issue on merits. Not having done so, the CIT (A) had no occasion to deal with the issue on merits and rejected the ground as not pressed. Though it is not mentioned in so many words, the inference is that the assessee did not press the ground before the CIT (A). This being the case, and in view of the decisions cited earlier, as there cannot be any waiver in respect of the jurisdictional aspect of the matter, we hold that the present case clearly falls within the ambit of the judgment in the case of P. V. Doshi (supra). Therefore, respectfully following the judgment of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Kumar Dutta, on behalf of the Revenue. Shri Banusekar had first pointed out the bare facts of the case as discussed by both the Members. According to him, there is no dispute as regards the factual aspects of the matter between the Members. He mainly relied upon the decision of the Gujarat High Court in the case of Doshi (supra) to plead that this issue having regard to the facts and circumstances of the case has not reached any finality by way of a Judicial application of mind to the relevant facts. According to him, although he had challenged the jurisdiction before the CIT (A) in the first round the ground that was taken was vague and it was not supported by any material and the assessee has not pursued the ground with any sort of argument or seriousness. In a way the ground was rejected and not disposed of on merits. He further clarified that there are only two methods for disposal of a matter when raised before the judicial forum. One is on merits and the other is as not pressed . Before the CIT(A) in the first round the assessee was not at all serious about the ground. He did not give any material or specific objection to the ground that he has raised and it cannot be said t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se of the assessee no such finality has resulted from the impugned order even in the first round. According to him, that makes the difference. Since the J.M. has disposed of first aspect of the ground and held that the assessee cannot challenge the validity of the proceedings initiated u/s.147 in the second ground of litigation, he has come to the view that the second issue which is admittedly covered by various decisions of the Tribunal and various decisions of the High Courts has become infructuous and non est. 9. The ld. counsel further relied upon the decision dated, 9.6.2010 of the Supreme Court in Civil Appeal No.2395 of 2008 in the case of Improvement Trust, Ludhiana where the Supreme Court in para 6 of that order pointed out that justice can be done only when the matter is fought on merits and in accordance with law rather than to dispose it of on such technicalities and that too at the threshold. The SC in this case has concerned with the condonation of delay in filing appeals. It was pointed out by their lordships in that case that only if malafides are writ large on the conduct of the party, generally as a normal rule, delay should be condoned. In the legal arena, an a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by me in para 2 above. A cursory look at this four sentences order of the CIT (A) wherein he has rejected the assessee s ground, in my opinion, cannot be said to confer a finality of the matter relating to jurisdiction of the A.O in issuing the notice u/s 147 of the Act. In fact the order itself says that no material was brought on record questioning the validity of action u/s 147 of the Act. The whole approach of the assessee was casual and it did not raise the issue seriously. It does not appear to have made any arguments on the merits of the matter. In such a circumstance, to say that the said order has reached a finality and to throw the assessee out of the court, in the second round of litigation, we will only be extending the rules of technicalities in the matter and thereby rendering injustice. It is for these reasons, in my opinion, the learned Vice President was correct to draw an inference having regard to the factual circumstances to say the assessee at best could be said to have not pressed the issue before the CIT (Appeals). I am conscious of the fact that the CIT (Appeals) did not record such a finding in so many clear and pointing words. But substance of the decision ..... X X X X Extracts X X X X X X X X Extracts X X X X
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