2020 (11) TMI 98 - HC - Income Tax

High Court emphasizes reasons in Tax Appeals, remands for fresh consideration

M/s. Indian Overseas Bank Versus The Joint Commissioner of Income Tax, Special Range-I, Chennai

The High Court allowed the Tax Case Appeals, emphasizing the need for reasons in decisions. The Court remanded the matter to the Tribunal for fresh ... Reopening of assessment - contention raised by the assessee that the Assessing Officer has done a roving enquiry by re-examining the facts already in record - HELD THAT:- Though such a ground was raised, the Tribunal in Paragraph No.3 of the impugned order, records that only two grounds have been raised by the assessee. When a specific plea has been raised by the assessee, contesting the validity of the reopening proceedings, the CIT(A) and the Tribunal could have considered the same As noticed above, the assessee has specifically raised a plea regarding the validity of the reopening. Infact, the assessee being a Nationalized Bank, does not stand to gain by not raising such a plea, especially when they have got a large team of Legal Experts and Chartered Accountants advising them in these matters. Therefore, the validity of the reopening needs to be considered by the Tribunal on merits and in accordance with law - matter is remanded to the Tribunal to decide the validity of the reopening proceedings. Issues:1. Validity of reopening of assessment challenged by the assessee.2. Confirmation of order by the CIT(A) regarding disallowance of deduction u/s 80M.Issue 1: Validity of Reopening of AssessmentThe appeals were filed by the assessee, a Nationalized Bank, challenging the common order passed by the Income Tax Appellate Tribunal, Madras, regarding the reopening of assessment for the Assessment Years 1990-91 and 1991-92. The key issue was whether the assessee had challenged the reopening of the assessment, raising certain grounds. The CIT(A) did not decide the validity of the reopening proceedings, citing that the contention was not raised before the Assessing Officer initially. The Tribunal noted that only two grounds were raised by the assessee, despite a specific plea challenging the validity of the reopening. The High Court found that the Tribunal did not provide independent reasons for dismissing the grounds raised by the assessee, leading to interference with the impugned order and remanding the matter back to the Tribunal for fresh consideration.Issue 2: Disallowance of Deduction u/s 80MThe second substantial question of law involved the confirmation of the order by the CIT(A) regarding the disallowance of deduction u/s 80M without verifying the computation of income. The Tribunal dismissed the ground raised by the assessee, stating that it did not arise out of the reassessment order. The High Court emphasized that the Tribunal failed to provide reasons for disagreeing with the findings of the Lower Appellate Authority and for not considering the grounds raised by the assessee. Consequently, the High Court allowed the Tax Case Appeals, set aside the impugned order, and remanded the matter to the Tribunal for fresh consideration in accordance with the law.In conclusion, the High Court allowed the Tax Case Appeals, focusing on the issues of the validity of the reopening of assessment and the disallowance of deduction u/s 80M. The Court emphasized the importance of providing reasons for decisions and remanded the matter back to the Tribunal for a fresh consideration in both aspects.