Tribunal Quashes CIT Order for Lack of Jurisdiction and Denies Assessee's Cross-Objections Due to Late Filing.

The Tribunal quashed the order passed by the CIT, Bhatinda under section 263 of the IT Act, finding that the CIT lacked jurisdiction as the issues had already been decided by the CIT(A). The Tribunal also held that the CIT, Bhatinda failed to provide adequate opportunity for the assessee to be heard, violating principles of natural justice. Consequently, the subsequent assessment order by the AO under section 143(3) was deemed illegal. The Tribunal dismissed the assessee's cross-objections due to an insufficient explanation for the delay in filing. The appeal by the assessee was allowed, and the Revenue's appeal was also allowed, setting aside the CIT(A)'s order.

---

---

Issues Involved:

1. Legality of the order passed by the CIT, Bhatinda under section 263 of the IT Act.
2. Adequate opportunity for the assessee to be heard before passing the order under section 263.
3. Jurisdiction of the CIT under section 263 when issues have been considered and decided by the CIT(A).
4. Competence of the CIT(A) to comment on the order passed under section 263 by the CIT.
5. Legality of the assessment order passed by the AO under section 143(3) in pursuance of the order under section 263.
6. Condonation of delay in filing the cross-objections by the assessee.

Issue-wise Detailed Analysis:

1. Legality of the order passed by the CIT, Bhatinda under section 263 of the IT Act:
The assessee challenged the order passed by the CIT, Bhatinda under section 263, arguing that the CIT wrongly assumed jurisdiction as the issues involved had already been subject-matter of appeal under section 250(6). The Tribunal noted that the CIT, Bhatinda issued a show-cause notice stating that the AO's order was erroneous and prejudicial to the interest of the Revenue. The CIT observed discrepancies in the assessment, including the peak credit amount and interest calculations. However, the Tribunal found that since the issues considered by the CIT under section 263 had been subject-matter of appeal and were decided by the CIT(A), the CIT, Bhatinda was not competent to exercise jurisdiction under section 263. The Tribunal quashed the order passed under section 263 on this ground.

2. Adequate opportunity for the assessee to be heard before passing the order under section 263:
The assessee argued that the CIT, Bhatinda did not afford proper opportunity to be heard before passing the order under section 263. The Tribunal observed that the show-cause notice was issued on 28th March 2003, served on 29th March 2003, and the hearing was scheduled for 31st March 2003. The Tribunal held that the time allowed by the CIT, Bhatinda was not sufficient, and the order passed without meeting the statutory requirement of law was quashed for violating the principles of natural justice.

3. Jurisdiction of the CIT under section 263 when issues have been considered and decided by the CIT(A):
The Tribunal emphasized that section 263(1) of the Act restricts the CIT's jurisdiction to revise orders only to issues that have not been considered and decided by the CIT(A). In this case, both the issues on which the CIT, Bhatinda revised the order under section 263 were considered and decided by the CIT(A). The Tribunal cited various judgments supporting this view and concluded that the CIT, Bhatinda was not justified in assuming jurisdiction under section 263 for matters already decided in appeal. The order under section 263 was quashed on this ground as well.

4. Competence of the CIT(A) to comment on the order passed under section 263 by the CIT:
The Revenue argued that the CIT(A) had no powers to comment on the order passed under section 263 by the CIT, Bhatinda. The Tribunal agreed, stating that no appeal lies to the CIT(A) against an order passed under section 263, and such appeals lie before the Tribunal. The Tribunal set aside the CIT(A)'s order, noting that the CIT(A) should have awaited the outcome of the appeal filed against the order under section 263 rather than declaring it illegal.

5. Legality of the assessment order passed by the AO under section 143(3) in pursuance of the order under section 263:
The Tribunal found that once the CIT passed an order under section 263, it was binding on the AO. The AO completed the assessment under section 143(3) by adding the amounts as directed by the CIT. However, since the order under section 263 was quashed, the subsequent assessment made by the AO was also deemed illegal and without jurisdiction.

6. Condonation of delay in filing the cross-objections by the assessee:
The assessee filed cross-objections late by 10 months and 6 days, citing reasons like the accident of the Authorized Representative and a fire in the office. The Tribunal found these reasons insufficient for condoning the delay, as the accident and fire occurred at times that did not justify the delay in filing. The Tribunal rejected the request for condonation of delay and dismissed the cross-objections.

Conclusion:
The appeal filed by the assessee was allowed, quashing the order passed under section 263 by the CIT, Bhatinda. The appeal filed by the Revenue was also allowed, setting aside the CIT(A)'s order. The cross-objections filed by the assessee were dismissed due to the delay in filing.

---