2019 (2) TMI 1955 - AT - Income Tax

Tribunal allows appeals, remands issues for fresh adjudication, dismisses Revenue's appeal under section 154.

M/s. Indofil Industries Limited Versus A.C.I.T, Circle – 10 (1) (1) {Erstwhile, Dy. CIT – 6 (1) } Mumbai AND D.C.I.T, Circle – 10 (1) (1), Mumbai Versus M/s. Indofil Industries Limited

The Tribunal allowed the appeals of both the assessee and the Revenue for statistical purposes, setting aside the Commissioner of Income-tax (Appeals) ... Rectification of mistake u/s 254 - CIT-A jurisdiction as contemplated in provisions u/s.251(1)(a) - HELD THAT:- CIT(A) disposed off all the grounds of appeal with a direction to verify the claim and delete the addition if found to be correct or decide as per law, without giving any independent finding, this in our view amounts to exceeding the jurisdiction as contemplated in provisions u/s.251(1)(a) - In the case of CIT v. Premkumar [2017 (10) TMI 1009 - KERALA HIGH COURT] as held that Appellate commissioner might confirm, reduce, enhance or annul assessment but he could not refer case back to AO for making the fresh assessment nor could he direct the Assessing Officer to decide in accordance with his directions. Since the Ld. CIT(A) directed the AO to verify the claim and allow in accordance with law or in accordance with her directions, in our view, she travelled beyond the scope of the provisions u/s.251(1)(a) - respectfully following the above decision, we set aside the order of the Ld.CIT(A) and restore all the issues to the file of the Ld. CIT(A) for denovo adjudication. Since we have restored all the issues in appeal of the assessee to the file of the Ld. CIT(A) the issues raised in the grounds of appeal by the Revenue also restored to the file of the Ld. CIT(A) for denovo adjudication. Issues Involved:1. Jurisdiction of the Commissioner of Income-tax (Appeals) under section 251(1)(a) of the Income-tax Act.2. Legality of the directions given by the Commissioner of Income-tax (Appeals) to the Assessing Officer for verification of claims.3. Applicability of section 154 of the Income-tax Act concerning rectification of mistakes apparent from the record.Issue-wise Detailed Analysis:1. Jurisdiction of the Commissioner of Income-tax (Appeals) under section 251(1)(a) of the Income-tax Act:The primary issue raised by the assessee was that the Commissioner of Income-tax (Appeals) [CIT(A)] exceeded the powers granted under section 251(1)(a) of the Income-tax Act by directing the Assessing Officer (AO) to verify the claims made by the assessee. The assessee argued that the CIT(A) should have given clear and categorical findings on the issues raised instead of remanding them back to the AO. The Tribunal observed that the CIT(A) disposed of all grounds of appeal by directing the AO to verify the claims and decide as per law, which amounted to exceeding the jurisdiction under section 251(1)(a) of the Act. The Tribunal cited the case of CIT v. Premkumar, where the Kerala High Court held that the Appellate Commissioner could confirm, reduce, enhance, or annul the assessment but could not refer the case back to the AO for making a fresh assessment.2. Legality of the directions given by the Commissioner of Income-tax (Appeals) to the Assessing Officer for verification of claims:The Tribunal noted that the CIT(A) directed the AO to verify the claims and decide according to the law, which was beyond the scope of the powers conferred under section 251(1)(a). The Tribunal referenced the amendment by the Finance Bill, 2001, which prevented the CIT(A) from setting aside the assessment or referring the case back to the AO. The Tribunal reiterated that the CIT(A) could not remand the matter to the AO for fresh assessment and must decide the issues independently.3. Applicability of section 154 of the Income-tax Act concerning rectification of mistakes apparent from the record:The assessee contended that the CIT(A)'s action of directing the AO to examine the allowability of claims amounted to a mistake apparent from the record, which is rectifiable under section 154 of the Act. The Tribunal, agreeing with the assessee, set aside the order of the CIT(A) and restored all issues to the CIT(A) for de novo adjudication. Consequently, the appeal of the Revenue against the order passed by the CIT(A) under section 154 was dismissed as infructuous.Conclusion:The Tribunal allowed the appeals of the assessee and the Revenue for statistical purposes, setting aside the CIT(A)'s order and restoring all issues to the CIT(A) for fresh adjudication. The appeal of the Revenue concerning the order under section 154 was dismissed as infructuous. The Tribunal emphasized that the CIT(A) must independently adjudicate the issues without remanding them back to the AO, adhering to the jurisdictional limits under section 251(1)(a) of the Income-tax Act.