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TMI Blog2014 (10) TMI 254X X X X Extracts X X X X X X X X Extracts X X X X ..... olved in liquor business. In the premises of one of the partners of the association of persons, viz., Shri R. Prasad, a search was conducted on February 23, 1999, under section 132 of the Income-tax Act, 1961 (for short "the Act"). Thereafter, assessment pro- ceedings were commenced against the firm and annexure A is the notice issued under section 158BD of the Act. The block period is from April 1, 1988, to February 23, 1999. After the filing of the return by the assessee, disclosing an income of Rs. 5,30,000, the block assessment was completed by the Deputy Commissioner of Income-tax, Circle I, Kollam, on December 28, 2001, and by annexure B, a block assessment order has been passed. In appeal filed by the appellant, the Commissioner of Income-tax (Appeals) passed annexure C order by partly allowing the same. The appellant filed an appeal before the Income-tax Appellate Tribunal, Cochin Bench, and an additional ground was raised as per annexure D. The Department also filed an appeal. The contention raised in the additional ground raised therein was that the notice issued under section 158BD of the Act is invalid. It was pointed out that the assessing authority can issue notice on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the apex court in Manish Maheshwari's case (supra). 5. Learned senior counsel for the Department, Shri P. K. R. Menon, sub- mitted that the judgment of the apex court has been distinguished by a Division Bench of this court on facts in CIT v. Panchajanyam Management Agencies and Services [2011] 333 ITR 281 (Ker). This case is identical on facts. According to the learned senior counsel, the parties are bound by the remand order. The operative portion of the judgment shows that this court had directed the Tribunal to consider the matter on the merits of the appeal alone. Therefore, the Tribunal cannot travel beyond the direction issued by this court, which is the view taken by the Tribunal herein and the same is fully justified. It is submitted that the argument raised by the learned coun- sel for the appellant has only to be rejected. 6. A reading of annexure F judgment of the Division Bench shows the fol- lowing : The Tribunal cancelled the assessment for the reason that annex- ure D notice was issued under section 158BD and not under section 158BC read with section 158BD. In appeal, the Revenue raised a question as to whether the Tribunal is right in holding that annexur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur view, the notice served on the assessee has to be necessarily taken as a notice issued under section 158BC read with section 158BD, as held by the Tribunal. As already found by us the assessee rightly under- stood the notice as one issued under section 158BD read with section 158BC and in fact the assessee correctly responded by filing return in Form 2B . . . So much so, we hold that the finding of the Tribunal that the notice is one issued under section 158BD alone is incorrect and unsustainable." The last sentence of paragraph 7 is the following : "We, therefore, answer the question referred in favour of the Revenue and against the assessee." For easy reference, the operative portion of the judgment also is extracted hereinbelow : "Therefore, these appeals are allowed vacating the orders of the Tribunal and by restoring both the appeals filed by the assessee and the Department to the Tribunal for fresh decision on the merits, after hearing the parties." 7. Arguments have been raised vehemently by both sides as to the effect of the operative portion of the judgment. Wha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner of Income-tax (Appeals). Once any such new or additional ground is raised before the Tribunal, they are duty bound to entertain that ground and render a decision thereon either themselves or by remanding the matter if further investigation into the facts is neces- sitated." The view taken is that the Tribunal has jurisdiction to permit the appellant to raise any ground which has not been raised before the assessing autho- rity or the Commissioner of Income-tax (Appeals). 9. Learned senior counsel for the Revenue submitted that there cannot be any quarrel to that proposition but the question is whether in the light of the judgment rendered by this court, the same can be permitted. 10. The view expressed by the Tribunal in the impugned order, annexure H, is that the legality of the proceedings has been admitted by the High Court and the matter was restored back to the file of the Tribunal for a fresh deci- sion and in such a situation can the Tribunal entertain another ground with regard to the validity of the proceedings ? It was the view of the Tribunal that when this court upheld the validity of the proceedings with regard to the block assessment, the same cann ..... X X X X Extracts X X X X X X X X Extracts X X X X
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