1995 (10) TMI 56 - AT - Income Tax

Tribunal upholds Assessing Officer's power to include excise duty in reassessment despite not in original assessment

The Tribunal upheld the Assessing Officer's authority to include excise duty not deposited in the reassessment, despite not being part of the original ... Assessing Officer, Assessment Proceedings, Excise Duty Issues:1. Jurisdiction of the Assessing Officer to make additions not considered in the original assessment order.2. Interpretation of the set aside order by the CIT(A) and its impact on the reassessment proceedings.Analysis:Issue 1:The first issue revolves around the Assessing Officer's jurisdiction to include an addition not addressed in the original assessment. The assessee contended that the Assessing Officer overstepped his authority by adding the excise duty collected but not deposited, as it was not part of the initial assessment. The CIT(A) upheld the addition, stating that the original assessment was set aside 'to be reframed afresh in totality,' allowing the Assessing Officer to consider all aspects. The assessee relied on legal precedents, emphasizing that the Assessing Officer's powers are limited to the subject-matter of the assessment. However, the Tribunal held that once an assessment is set aside entirely, the Assessing Officer has the discretion to investigate all aspects afresh, as confirmed by the Supreme Court's decision in CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225. The Explanation under section 251 of the Act grants broad powers to the CIT(A) in disposing of appeals, further supporting the Assessing Officer's authority to probe all issues during reassessment.Issue 2:The second issue involves the interpretation of the CIT(A)'s set aside order and its implications on the reassessment process. The assessee argued that the CIT(A)'s order was a restricted set aside, limiting the Assessing Officer's jurisdiction to specific areas mentioned in the assessment order. However, the Tribunal disagreed, stating that the CIT(A) had set aside the entire assessment, providing the Assessing Officer with the authority to conduct a comprehensive reassessment. Referring to legal precedents, the Tribunal highlighted that in cases of open remand orders, Assessing Officers are not restricted to specific sources of income and can consider all relevant aspects, even new sources of income not previously assessed. Therefore, the Tribunal upheld the Assessing Officer's decision to tax the excise duty amount in the reassessment, concluding that the CIT(A)'s order was open-ended, allowing for a thorough investigation into all aspects during the reassessment process.