2018 (8) TMI 208 - HC - Income Tax

Remand report under Sections 143(3) and 147 ignored; review allowed, Tribunal order set aside for reconsideration

HC allowed the review petitions, holding that the Tribunal's order suffered from an error apparent on the face of the record. The Tribunal had merely ... Claim of agricultural income - revision petition - Whether assessee failed to appreciate the evidence available on record by traversing beyond the scope of the records and against the findings given by the various statutory and judicial authorities as also the admissions made in the remand report by the assessing officer? - Held that:- The order passed by the Tribunal is verbatim repetition of the findings of the Assessing Officer in its order dated 29.03.2001, passed under Section 143(3) read with Section 147 of the Act. We find that there is no reference to the remand report dated 25.11.2002, which was called for by the CIT(A) based on which the CIT(A) allowed the appeal. To be noted, the Assessing Officer on report being called for, has made a detailed enquiry, and the Inspector of Income Tax has recorded statements from the landowners verified the Revenue records maintained in the office of the VAO and then submitted his remand report. The Tribunal ought to have made an endeavour to examine as to the effect of the remand report, which was the basis for allowing the appeal filed before the CIT(A). We find that while dismissing the assessee's appeals, the question which was required to be considered is whether the Tribunal is right in disallowing the claim of agricultural income of the assessee, having failed to appreciate the evidence available on record and traversing beyond the scope of the records and findings given by authorities as also the admission made in the remand report by the Assessing Officer himself. Thus, what was required to be considered, was the effect of the findings given by the authorities more particularly, the admission made in the remand report by the Assessing Officer himself. Thus, a subsidiary substantial question of law, which would arise out of the substantial question of law framed is whether the Revenue was entitled to maintain an appeal as against the order of CIT(A), which itself was based upon a remand report 25.11.2002. If the answer to this subsidiary question of law is answered in favour of the assessee, then the appeal filed by the Revenue before the Tribunal has to be not maintainable in the light of the decisions quoted above. Though such a question was not specifically framed, the effect of the findings given by the authorities and more particularly, the admission of the Assessing Officer in the remand report, was required to be considered. Thus, in the absence of consideration of this important jurisdictional issue, we find that the judgment, dated 30.09.2013, suffers from error which is apparent on the face of the judgment. As already noticed, the Tribunal verbatim repeated the order passed by the Assessing Officer, dated 29.03.2001, and ignored the remand report, dated 25.11.2002 and the findings rendered by the CIT(A) based on such remand report. Thus, if such is the situation, the appeal itself would have been incompetent. Hence, this question, which touches upon the jurisdiction of the Tribunal, has not been considered by the Tribunal, we are inclined to review the judgment and remand the matter to the Tribunal for fresh consideration. Review Petitions are allowed Issues Involved:1. Maintainability of Review Applications under Section 260A(7) of the Income Tax Act.2. Jurisdiction of the Income Tax Appellate Tribunal (ITAT) to entertain appeals based on remand reports.3. Evaluation of agricultural income claims by the assessee.4. Consideration of monetary limits for filing appeals by the department before the Tribunal based on CBDT Circular No. 21 of 2015.Issue-Wise Detailed Analysis:1. Maintainability of Review Applications under Section 260A(7) of the Income Tax Act:The primary objection raised by the Revenue was that the Income Tax Act does not confer the power of review under Section 260A(7). However, the court referred to multiple precedents, including the Supreme Court's decisions in VIP Industries Ltd. vs. Commissioner of Central Excise and Commissioner of Income Tax, Guwahati vs. Meghalaya Steels Limited, to establish that the High Court, as a court of record, inherently possesses the power of review. The court concluded that the review applications are maintainable, emphasizing that the High Court has both the power and duty to correct apparent errors in its records.2. Jurisdiction of the Income Tax Appellate Tribunal (ITAT) to entertain appeals based on remand reports:The assessee argued that the ITAT lacked jurisdiction to entertain the Revenue's appeal against the CIT(A)'s order, which was based on the remand report of the Assessing Officer. The court analyzed the facts, noting that the Assessing Officer's remand report was in favor of the assessee, confirming the agricultural income. The Tribunal, however, failed to consider this remand report and merely reiterated the Assessing Officer's initial findings. The court held that the Tribunal should have first determined its jurisdiction to entertain the appeal, given that the CIT(A)'s decision was based on the remand report. This oversight constituted an error apparent on the face of the judgment, warranting a review and remand of the case to the Tribunal for fresh consideration.3. Evaluation of agricultural income claims by the assessee:The court examined the evidence presented by the assessee, including the remand report, which confirmed the agricultural activities and income. The CIT(A) had accepted this evidence, but the Tribunal dismissed the appeal without considering the remand report. The court emphasized that the Tribunal should have evaluated the findings of the CIT(A) based on the remand report and the detailed enquiry conducted by the Assessing Officer. The failure to do so led to the erroneous dismissal of the assessee's claim for agricultural income.4. Consideration of monetary limits for filing appeals by the department before the Tribunal based on CBDT Circular No. 21 of 2015:The assessee also raised the issue of monetary limits for filing appeals by the department, citing CBDT Circular No. 21 of 2015, which sets a threshold of Rs. 10,00,000 for appeals before the Tribunal. The court allowed the assessee to present this argument before the Tribunal during the rehearing, as it was relevant to the maintainability of the Revenue's appeal.Conclusion:The court allowed the review applications, set aside the judgment dated 30.09.2013, and remanded the matter to the Tribunal to decide its jurisdiction to entertain the appeals filed by the Revenue. If the Tribunal finds the appeals maintainable, it should reconsider the other issues after providing an opportunity to both parties. The assessee was also permitted to raise the issue of monetary limits during the Tribunal's rehearing.