TaxTMI 
TaxTMI 
2007 (11) TMI 351
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....cle-II (2), i/c. Chennai filed an affidavit dated January 31, 2006, requesting therein condonation of delay. The contents of the same are as under: "1. I am the Deputy Commissioner of Income-tax, Central Circle II (2) and well acquainted with the facts and circumstances of the case. 2. The order of the Commissioner of Income-tax (Appeals) in I.T.A. Nos. 1, 5 and 7, dated September 15, 1998, was received in this office on November 18, 1998, and since the limitation for filing appeal before the Income-tax Appellate Tribunal is 60 days, the appeal ought to have been filed on or before January 13, 1999, but has been filed only on January 31, 2006, with a delay of 7 years. 3. The reasons for the delay as ascertained from the records of this office are submitted as under: The Revenue while perusing the Commissioner of Income-tax (Appeals)'s order in I.T.A. Nos. 1, 5 and 7, dated September 15, 1998, was under the bona fide impression that setting aside of assessment has conferred the jurisdiction on the Assessing Officer to make a fresh assessment after giving reasonable opportunity to the assessee. In view of the recent judicial pronouncement to the effect that setting aside ....
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.... that setting aside of assessments by the Commissioner of Income-tax (Appeals) without giving any direction for fresh assessment amounts to annulment of assessment, it is felt necessary to contest the impugned order of the Commissioner of Income-tax (Appeals). 4. It is submitted that the Department has raised substantial question of law and the issues raised are of vital importance. If the delay in filing the appeal is not condoned a meritorious case would be lost, causing substantial loss to the Revenue. No prejudice will be caused to the respondent herein by condoning the delay and the matter could be agitated on merits. Furthermore as per the judgment reported in Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471; AIR 1987 SC 1353 the hon'ble Supreme Court had held that the court should adopt a liberal approach in condoning the delay on the reasons, inter alia, that ordinarily a litigant does not stand to benefit by lodging an appeal late. 5. In this regard, it is respectfully submitted that my predecessor Shri M. Rajasekar, Deputy Commissioner of Income-tax, Central Circle-II (2), Chennai, had filed a petition before the hon'ble Income-tax Appellate Tribu....
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....ce the respondent's interest, in so far as he will not have all materials to defend the case. It was further submitted that wrong understanding of the law by the higher officials of the Department will not justify the condonation of delay. Reliance was placed on the decisions of the Tribunal in I.T.A. Nos. 352 to 360, 278 to 396, 413, 415, 416 and 418 (Khemka Group of cases) and filed a copy of the orders of the Tribunal dated December 22, 2006 and November 29, 2006, wherein the delay was condoned. He contended that in Khemka Group of cases, the renowned firm of Chartered Accountants-B.B. Naidu and Co. who is handling the Khemka group of cases admitted that there was a lapse on their part by their own letter. He summarized the facts of the Khemka group cases and distinguished the facts of the present case. Further he relied on the decision of the Tribunal in Joint CIT v. Tractors and Farm Equipments Ltd. reported in [2007] 104 ITD 149 (Chennai) and the hon'ble Supreme Court in the case of Ramlal v. Rewa Coalfields Ltd., AIR 1962 SC 361 to support his contention. Finally it was submitted that the decision of not filing the appeals has been taken by the Commissioner of Income....
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....ide as to whether these appeals are to be filed before this Tribunal or not, we are of the view that a distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. Whereas in the former case the consideration of prejudice to the other side will be a relevant factor, so the case calls for a more cautious approach, in the latter case no such consideration may arise and such a case deserves a liberal approach. No hard and fast rule can be laid down in this regard. The court has to exercise the discretion on the facts of each case, keeping in mind that in considering the expression "sufficient cause", the principle of advancing substantial justice is of prime importance. It is to be noted that in the case of Collector, Land Acquisition v. Mst. Katiji [1987] 167 ITR 471 (SC), the delay was only 4 days. In the case of Vedabai alias Vaijayanatabai Baburao Patil v. Shantaram Baburao Patil [2002] 253 ITR 798 (SC), the delay of 7 days was considered. In this case, the hon'ble apex court clearly laid down that a distinction must be made between a case where the delay is inordinate and a case where the delay is of a few days. The law as....
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....cer should have taken the profit disclosed by similar traders for estimating the net profit. He should not have made additions left and right without putting them to the appellant. So, I find that the assessments were made without wisdom and against the settled and invariable principles of justice. They deserve to be set aside. 3. The assessments are set aside." Subsequent to this, the Assessing Officer issued notices under section 142(1) of the Act along with letters and the assessee was asked to furnish the details. The assessee complied with the notices but the Assessing Officer was not satisfied with the details furnished by the assessee as well as the explanations offered. Accordingly, vide order dated March 26, 2001, passed the fresh assessments under section 144 read with section 251 of the Income-tax Act, 1961 for the above assessment years considering the entire issues and making various additions. Aggrieved by these assessment orders, the assessee went in appeal before the Commissioner of Income-tax (Appeals) who partly allowed the appeals of the assessee. Aggrieved, the assessee as well as the Revenue have filed these appeals before the Tribunal. The assessee has rai....
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....lled the same on merit vide order dated September 15, 1998. But the Assessing Officer completed the assessment under section 144 read with section 251 of the Act by mis-conceiving that the Commissioner of Income-tax (Appeals) has given direction to re-do the assessment. Therefore, the Assessing Officer has wrongly assumed jurisdiction in making the assessment in dispute which is without jurisdiction and not sustainable in the eyes of law. To support his contention and clarify the meaning of word "set aside", learned counsel for the assessee relied on the Black's Law Dictionary, Sixth Edition at page 1372 and the following case laws: (1) V.B. Gadkari v. STO [1985] 59 STC 362 (MP); (2) Ganga Prasad Sharma v. CIT [1981] 132 ITR 87 (MP); (3) R.B. Shreeram Durga Prasad and Fatechand Nursing Das v. Settlement Commission (IT and WT) [1989] 176 ITR 169 (SC); (4) Pulipati Subbarao and Co. v. AAC [1959] 35 ITR 673 (AP); (5) ITO v. Kalyan Kumar Roy Trust [2001] 252 ITR (AT) 56 (Cal); (6) CIT v. Mrs. Ratanabai N.K. Dubhash [1998] 230 ITR 495 (Bom); (7) CIT v. Rajesh Talkies [1996] 220 ITR 107 (P & H); and (8) Fu Sheen Tannery v. ITO [2003] 262 ITR 456 (Cal). On the contrar....
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....essment based on pure guess without reference to any evidence or material at all. Therefore the order of assessment and the order dismissing the revision petition of the assessee were vitiated by an error apparent on the face of the record and deserved to be quashed." In the case law relied on by learned counsel for the assessee, the hon'ble Madhya Pradesh High Court in the case of Ganga Prasad Sharma v. CIT [1981] 132 ITR 87 has held as under: "in the instant case the basis on which the computation of income was made was not disclosed in the assessment order. The assessment order and the impugned order of the Commissioner under section 263 were quashed giving liberty to the Income-tax Officer to pass a fresh assessment order." In the case of R.B. Shreeram Durga Prasad and Fatechand Nursing Das v. Settlement Commission (IT and WT) [1989] 176 ITR 169, the hon'ble Supreme Court has held as under: "allowing the appeal, (i) that an appeal under article 136 of the Constitution of India lay to the Supreme Court against the order of the Settlement Commission; (ii) that the earlier order passed by the Settlement Commission on August 24, 1977, was a nullity because it was ma....
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....ot be generally revived, whereas in the latter, they can be revived if there are clear directions to that effect; they are similar in the sense that 'both wipe out the original orders'-see the judgment in the case of Seghu Buchiah Setty's case [1964] 52 ITR 538 (SC) at page 544, section 251(1)(a) of the Income-tax Act, 1961 which is in pari materia with section 31(3) (a) and 31(3)(b) of the Indian Income-tax Act, 1922 confers upon the first appellate authority the power to annul the assessment as well as the power to set aside the assessment. However, the power to set aside the assessment is circumscribed by the condition that in such a case he should refer the case back to the Income-tax Officer for making a fresh assessment in accordance with his directions. The reason for the difference is clear. An assessment is annulled when there is a lack of pecuniary jurisdiction or territorial jurisdiction or jurisdiction over the subject-matter of the proceeding. In such a case after the assessment is annulled, there is no scope for passing a fresh assessment. However, if the assessment is set aside it is generally done only if there is a procedural irregularity which can be c....