1987 (2) TMI 20 - HC - Income Tax

Jurisdictional Limits: Tribunal's Decision Final. Officer Bound by Ruling.

The High Court of Madhya Pradesh held that the Income-tax Officer lacked jurisdiction to conduct a fresh assessment after the Tribunal set aside the ... Assessment Issues involved: Jurisdiction of Income-tax Officer to proceed with fresh assessment after Tribunal set aside Commissioner's order.Summary:The High Court of Madhya Pradesh heard a petition under article 226/227 of the Constitution of India concerning a public charitable trust's assessment under the Income-tax Act, 1961 for the years 1973-74, 1975-76, 1976-77, and 1977-78. The Income-tax Officer initially granted exemption under section 11 of the Act, but the Commissioner of Income-tax later set aside this assessment and directed a fresh assessment under section 263. The Income-tax Appellate Tribunal then overturned the Commissioner's order. Despite this, the Income-tax Officer proceeded to issue draft assessment orders under section 144B, claiming the Tribunal's decision was not accepted by the Revenue. The petitioner challenged this action as lacking jurisdiction.The court, comprising Judges G. G. Sohani and R. K. Verma, held that once the Tribunal had set aside the Commissioner's order, the Income-tax Officer had no authority to conduct a fresh assessment. The Revenue's disagreement with the Tribunal's decision did not empower the Officer to proceed independently. The court emphasized that until the Tribunal's order is overturned, the Revenue must abide by it. The Income-tax Officer's actions were deemed unjustifiable, leading to the quashing of the notice and draft assessment orders.Consequently, the petition was allowed, and the notice along with the draft assessment orders were annulled. Each party was directed to bear its own costs, and any security amount was to be refunded to the petitioner.