TaxTMI 
TaxTMI 
2013 (3) TMI 70
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....enged before Commissioner of Income Tax (Appeals) in set-aside matter? 2. Whether the ITAT was correct to hold that in the set aside proceedings the entire jurisdiction cannot be entertained ignoring the decision of Ishwar Singh & Sons Vs. CIT reported in 131 ITR 480. ?" Briefly stated, the facts in brief, giving rise to the present appeal are as follows: The appeal relates to the Assessment year 1990-91 in proceedings arising under section 147/148 of the Act. The appellant is an individual. She is engaged in the business of silver bullion, etc. For the Assessment Year in question, she did not file any return of income. Notice under section 148 of the Act was issued on 18.01.1995. In compliance thereof, she filed a return of income declaring an income of Rs. 17,900/- The Income Tax Officer, Ward - 1, Mirzapur (hereinafter referred to as the Assessing Officer) vide order dated 21.03.1997 assessed the income of the appellant on Rs. 1,01,500/- Feeling aggrieved, the appellant filed an appeal before the Commissioner of Income Tax (Appeals) Allahabad, who vide order dated 05.02.1998 set-aside the order passed by the Assessing Officer and directed fresh assessment to be made in ....
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....rakash Versus C.S.T. 4. (1992) 197 ITR 296- M/s. Cawnpore Chemicals Works Pvt. Ltd. Versus C.I.T. 5. (1966) 62 ITR 109 - Gooyee (B.K.) Versus C.I.T. 6. (1978) 113 ITR 22 (Guj) - Doshi (P.V.) Versus Commissioner of Income Tax 7. (1981) 131 ITR 480 - Commissioner of Income Tax Versus Ishwar Singh 8. (2011) 337 ITR 271 (Guj) - DCIT (Assessment) Versus Surat Electricity Co. Ltd. Sri Chopra, learned counsel submitted that it is not correct to state that the Assessing Officer while passing the order on 04.10.1999 was making the assessment under section 148 of the Act. In fact, he was passing the order under section 251 of the Act to give effect to the direction given by the Commissioner of Income Tax (Appeals) vide order dated 05.02.1998 and, therefore, the appellant can not raise the plea of jurisdiction or the validity of the proceedings initiated under section 147/148 of the Act. He submitted that the Commissioner of Income Tax (Appeals) has rightly declined to permit the appellant to raise such a ground in the second round of proceedings. In support of his aforesaid submission, he has relied upon the following decisions: - 1. (1986) 160 ITR 961 (SC) - Centr....
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....onsidered arguments of appellant's counsel and entire material on record. The action under section 148 has been validly initiated. Moreover, in this case assessment under section 143(3) was made on 21.03.1997 originally and appellant had filed an appeal. But no ground of appeal was taken regarding action under section148. Hence, following the decision of Hon'ble Supreme Court in CIT Versus Sun Engineering Works (P) Ltd. 198 ITR 297 (SC), it is held that appellant cannot raise this issue in reopened assessment proceedings as it had been settled earlier." In the second appeal preferred before the Tribunal, the appellant had challenged the order passed by the Commissioner of Income Tax (Appeals) on this point by taking 4 grounds, which are reproduced below : - "1. That the learned CIT (Appeals) erred in law and on facts, while holding that the action under section 148 has bee validly initiated. 2. That the observations made by the C.I.T. (Appeals) that since the appellant had not taken any ground regarding action under section 148, in the appeal originally filed, hence following the decision of the Hon'ble Supreme Court in the case of CIT Versus Sun Engineering Works (P) Ltd.....
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....urther in appeal. In the second round of proceedings, the appellant had challenged the initiation of proceedings under section 148 of the Act before the Commissioner of Income Tax (Appeals) though no such plea was raised before the Assessing Officer. The Commissioner of Income Tax (Appeals) on the one hand had held that the action under section 148 of the Act had been validly initiated but on the other hand had held that as in the assessment made on 21.03.1997 originally the appellant had filed an appeal but no ground of appeal was taken regarding action under section 148 of the Act, hence, the appellant cannot raise this issue in reopened assessment proceedings. In the case of M/s. Mam Chand (supra), this Court has held that a point which goes to the root of the matter or affects the very existence of the jurisdiction of the authority, can be raised at any time, be it in appeal or in revision. In the case of M/s. Ram Dayal Har Bilas (supra), a Full Bench of this Court was considering the provisions of section 9 of the U.P. Sales Tax Act, 1948, which empowered the appellate authority while hearing an appeal against the order of remand to confirm, reduce, enhance or annul the ....
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....come Tax Act has been given ample power to inhibit the scope and ambit of the assessment proceedings to be carried on by the Assessing Authority. If any disallowance on account of the commission paid to the selling agent by the assessee has been upheld and the matter has been remanded to the Income Tax Officer to fresh determination, and the matter is not pursued further by the assessee, then in the fresh assessment, disallowance on account of the commission paid to the selling agent cannot be contested and considered on merits in appeal filed against the fresh assessment. In the case of Gooyee (B.K.) (supra), the Calcutta High Court has held that the objection of invalidity of the notice issued under section 34 of the Indian Income Tax Act, 1922 and all proceedings thereunder can be taken in appeal by the assessee even though he had submitted a return in response to the notice and had not taken this objection before the Income Tax Officer as service of a valid notice is necessary to invest the Income Tax Officer with jurisdiction to take proceedings under this section. In the case of Surat Electricity Co. Ltd. (supra), the Gujarat High Court has held that as a jurisdictional....
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.... "16..........if the entire material had been placed by the assessee before the Assessing Officer at the time when the original assessment was made and the Assessing Officer applied his mind to that material and accepted the view canvassed by the assessee, then merely because he did express this in the assessment order, that by itself would not give him a ground to conclude that income has escaped assessment and, therefore, the assessment needed to be reopened. On the other hand, if the Assessing Officer did not apply his mind and committed a lapse, there is no reason why the assessee should be made to suffer the consequences of that lapse." In the case of Saheli Synthetics P. Ltd. (supra), the Gujarat High Court has held as follows :- "Similarly even where an assessment is set aside simpliciter, without any enhancement proposal, it is always in the context of the appeal against an order of assessment and cannot be read to mean that the appellate authority granted powers to the Assessing Officer in relation to items of assessment which were never forming part of the appeal before the appellate authority. At the cost of repetition it is required to be noted that processing ....