1997 (10) TMI 42 - HC - Income Tax

Court rules in favor of Revenue in appeal post reassessment order vacation, assessee's conduct crucial

Commissioner Of Income-Tax Versus N. Krishnan

The court ruled against the assessee in a case involving the validity of the Tribunal's decision on the Revenue's appeal post reassessment order vacation. ... Assessment, Advocate, Irregularity, Irregular And Invalid Orders Issues Involved:1. Validity of Tribunal's decision on Revenue's appeal post reassessment order vacation.2. Authority of advocate to sign a section 146 petition.3. Validity of reopening assessment under section 146.4. Estoppel and acquiescence by the assessee.5. Application of the principle laid down in Byram Pestonji.6. Examination of advocate and assessee for natural justice.Issue-Wise Detailed Analysis:1. Validity of Tribunal's Decision on Revenue's Appeal Post Reassessment Order Vacation:The Tribunal held that the Revenue's appeal against the reliefs granted by the Commissioner of Income-tax (Appeals) does not survive for consideration as the reassessment order itself was vacated in the appeal by the assessee. The court found that the Tribunal erred in its decision, as it should have considered the merits of the other contentions raised by both sides.2. Authority of Advocate to Sign a Section 146 Petition:The Tribunal concluded that the advocate was not authorized to sign the petition for reopening the assessment under section 146 on behalf of the assessee. The court disagreed, stating that the terms of the vakalath executed by the assessee authorized the advocate to conduct all proceedings connected with the order of assessment, which includes filing an application under section 146.3. Validity of Reopening Assessment Under Section 146:The Tribunal found that the reopening of the assessment under section 146 was void ab initio due to the lack of authority of the advocate. The court held that even if there was an irregularity in the manner the application was filed, the assessee's subsequent conduct showed that he had ratified the action taken by his advocate, thus waiving any objection to the jurisdiction.4. Estoppel and Acquiescence by the Assessee:The court noted that the assessee had participated in the fresh assessment proceedings and did not raise any objection before the first appellate authority. The court held that the assessee was estopped from raising the objection regarding the lack of authorization of the advocate at a later stage, as it was an afterthought.5. Application of the Principle Laid Down in Byram Pestonji:The court declined to answer the question regarding the application of the principle laid down in Byram Pestonji as unnecessary, given the conclusions reached on the other issues.6. Examination of Advocate and Assessee for Natural Justice:The court also declined to answer the question regarding the examination of the advocate and the assessee for natural justice, as it was deemed unnecessary.Conclusion:The court answered question No. 1(i) and 1(ii) in I.T.R. No. 125 of 1994 in the negative, in favor of the Revenue and against the assessee. Question No. 4 was answered in the affirmative, in favor of the Revenue and against the assessee. The court declined to answer questions Nos. 2, 3, 5, and 6 in I.T.R. No. 125 of 1994 and questions Nos. (i) and (ii) in I.T.R. No. 124 of 1994 as unnecessary. The Tribunal was directed to examine the other contentions raised by both sides on the merits.