Assessee's appeal dismissed but granted liberty to challenge rectification order. Upholding right to appeal in tax matters.

The Tribunal dismissed the appeal of the assessee against the order of the Ld. Commissioner of Income Tax (Appeals) regarding the dismissal of the appeal against the rectification order dated 28.07.2015. However, the Tribunal granted liberty to file an appeal against the initial rectification order dated 19.02.2015, emphasizing the importance of the right to appeal in addressing grievances related to disallowances not sustainable in law and on facts.

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Issues:
1. Dismissal of appeal by CIT(A) against order u/s.154 dated 28.07.2015.
2. Disallowance of prior period expenditure of Rs. 25,76,38,511 made in the rectification order(s) passed under section 154 of the Act.

Analysis:
1. The appeal was filed against the order dated 25.07.2016 passed by the Ld. Commissioner of Income Tax (Appeals)-XXII regarding the order passed u/s.154 for the Assessment Year 2008-09. The appellant raised grounds challenging the dismissal of the appeal by CIT(A) without providing an opportunity to be heard. The CIT(A) dismissed the appeal stating that the grounds did not pertain to the rectification order dated 28.07.2015 under challenge. The CIT(A) clarified that this order would not prejudice any legal right to appeal pertaining to the order dated 19.02.2015 if available under the law.

2. The disallowance of prior period expenditure of Rs. 25,76,38,511 was contested by the assessee. The Assessing Officer had initially disallowed Rs. 28,64,00,000 which was later reduced to Rs. 2,87,61,489 in the rectification order dated 28.07.2015. The assessee argued that the earlier order u/s.154 merged with the subsequent order, allowing the challenge to the disallowance. However, the Tribunal found that the right course of remedy would have been to file an appeal against the first rectification order dated 19.02.2015. The Tribunal granted liberty to the assessee to file an appeal against the first rectification order along with a petition for condonation of delay.

3. The Tribunal highlighted that the right to appeal is a substantial right available to the assessee if any disallowance is not sustainable in law and on facts. The Tribunal directed the Assessing Officer to expeditiously dispose of any rectification application filed against the first rectification order dated 19.02.2015. The assessee was given the opportunity to explore the legal remedy of appeal for addressing its grievance. The appeal of the assessee was technically treated as dismissed, subject to the Tribunal's direction for filing an appeal against the first rectification order.

In conclusion, the Tribunal dismissed the appeal of the assessee but granted liberty to file an appeal against the first rectification order dated 19.02.2015, emphasizing the importance of the right to appeal in addressing grievances related to disallowances not sustainable in law and on facts.

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