TaxTMI 
TaxTMI 
2023 (1) TMI 178
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....n to consider any other issue. In such circumstances, is the AO expected to go beyond the issued considered by the Commissioner (A), more precisely, which are not subject matter of first appeal before the Commissioner (A)? In out humble opinion when an assessment order is set aside by appellate authority to AO, it is not open to him to go beyond the issues, to new issues thereby enhancing the assessment. His jurisdiction is limited to the issued which were subject matter of appeal. We place reliance on the decision in the case of Sri Gajalakshmi Ginning Factor Ltd. vs. CIT reported in 22 ITR 502. In the present case, the AO has carried out the directions given by the Commissioner (A) and as such we cannot find that AO's action is erroneous. He duty is to follow the direction of the Commissioner (A). he followed the direction of the Commissioner (A). The Commissioner (A) never directed to consider the DVAC report dt.7.12.1996 issued in the case of Miss J.Jayalalitha under Prevention and Corruption Act. Further in our opinion, the DVAC report is not a record to the proceedings under the I.T. Act. It can be considered for reopening the assessment, not for revoking the provisions u....
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....r and unambiguous, as in terms thereof the doctrine of merger applies only in respect of such items which were the subject-matter of appeal and not in respect of those which were not." Accordingly we quash the revision order of the CIT under section 263. 7. In the result, the appeal is allowed. 3. This Tax Case Appeal was admitted on the following substantial questions of law:- i. Whether in the facts and circumstances of the case, the Tribunal was right in holding that the Commissioner of Income Tax did not have the power to revise the de novo order of the assessing officer, as there was no specific direction of the first appellate authority on the issue, even though the entire assessment had been set aside to be redone after making enquiries? ii. Whether in the fact and circumstances of the case, the Tribunal was right in holding that the DVAC's report cannot be looked into by the Commissioner of Income Tax for the purpose of revision under Section 263 of the Income Tax Act, 1961 as it is not a proceeding under the Income Tax Act, 1961? iii.Whether in the facts and circumstances of the case whether the reference in Section 263 of the Income Tax Act, 1961 to "record....
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....n instruction to not to withdraw the present appeal in the light of the above mentioned circular as amended. 10. By way of rejoinder, the learned counsel for the respondent submits that Paragraph No.10(e) & (f) of the aforesaid Circular is not applicable to the facts of the present case as the prosecution initiated against the respondent was compounded by the respondent under Section 279(2) of the Income Tax Act, 1961 for the Assessment Year 1993-1994. 11. We have considered the arguments advanced by the learned Senior Standing Counsel for the appellant and learned counsel for the respondent. 12. We are inclined to overrule the preliminary objection raised by the learned counsel for the respondent in the light of the Paragraph No.10 of the aforesaid Circular No.03/2018 [F.No.279/Misc.142/2007-ITJ (Pt)], dated 11.07.2018 as amended by Letter F.No.279/Misc.142/2007-ITJ (Pt), dated 20.08.2018 and Circular No.5/2019 [F.No.279/Misc./M-84/2018- ITJ], dated 05.02.2019. Paragraph No.10(e) & (f) reads as under:- 10. Adverse judgments relating to the following issues should be contested on merits notwithstanding that the tax entailed is less than the monetary limits specified in para 3 ....
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.... Assessment Order dated 27.03.1997 passed by the Assessing Officer under Section 144 of the Income Tax Act, 1961. During the interregnum, the Assistant Commissioner of Income Tax passed an order dated 18.06.1997 under Section 154 of the Income Tax Act, 1961. 21. The Commissioner of Income Tax (Appeals), vide order dated 26.03.1998, after examining the issues, set aside the order of assessment dated 27.03.1997 with the following observations:- 15. The Assessing Officer has not chosen to examine the person confirming the lease transaction and the Manager who is stated to have looked after the agricultural operations. Statements of third parties, even if closely related to the appellant, cannot be summarily rejected. The Assessing Officer is required to consider the letters and affidavits of these parties as per law. The order of assessment deserves to be set aside on these points also. 16. In the light of the foregoing the entire assessment is set aside with the direction to finalise the assessment afresh after carring out enquiries providing proper opportunity to appellant considering her submissions and following due procedure laid down by the law. 22. Thus, the Commissioner of....
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....4,33,485/-] Income Tax thereon : Rs.53,52,394/- Add: Surcharge @ 12% : Rs. 6,42,287/- ---------------------- : Rs.59,94,681/- Add: Interest u/s 234A : Rs.37,16,652/- Interest u/s 234B : Rs.43,16,112/- Interest u/s 234C : Rs. 43,029/- ---------------------- Total : Rs.1,40,70,476/- Less : 140A Taxes paid 10.03.1997 : Rs.677543/- 31.03.1997 : Rs.750000/- 28.04.1997 : Rs.178000/- 29.04.1997 : Rs. 8000/- : Rs. 16,13,543/- ---------------------- Balance demand payable : Rs.1,24,56,931/- 29. On behalf of the appellant, it is submitted that the Income Tax Appellate Tribunal committed an error in allowing the respondent's appeal against the order dated 14.03.2002 passed under Section 263 of the Income Tax Act, 1961. It is submitted that the report of the DVAC was transmitted to the Income Tax Department on 24.07.1997. It ought to have been considered by the Assessing Officer while passing the Assessment Order dated 20.03.2000 (signed on 28.03.2000). 30. It is submitted that the Income Tax Appellate Tribunal erred in concluding that the DVAC's report dated 07.12.1996 w....
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....1997 as is evident from a reading of the order. 36. It is submitted that the scope of remand was limited and therefore, there was no scope for invoking Section 263 of the Income Tax Act, 1961 against the second assessment order dated 20.03.2000 (signed on 28.03.2000). 37. It is submitted that the limitation for invoking Section 263 of the Income Tax Act, 1961 against the order dated 27.03.1997 would have expired on 31.03.1999. It is further submitted that even if Section 154 of the Income Tax Act, 1961 was to be invoked, the limitation would have expired on 31.03.2001. It is submitted that even if the orders were prejudicial to the interest of the revenue, it cannot be said that the order dated 20.03.2000 (signed on 28.03.2000) was erroneous and therefore, reliance was placed on the decision of the Hon'ble Supreme Court in Malabar Industrial Co. Ltd. Vs. Commissioner of Income Tax, 2000 (2) TMI 10. 38. The learned counsel for the respondent has relied on the following case laws in support of the case of the respondent:- i. Commissioner of Income Tax Vs. Alagendran Finance Ltd., 2007 (7) TMI 304 : 2007 (7) SCC 215. ii. Kartar Singh Vs. Commissioner of Income Tax, Amritsar....
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.... the three issued as stated above. 45. At the same time, order dated 26.03.1998 of the Appellate Commissioner remanding the case back to the Assessing Officer to pass a fresh de novo order on the three grounds specified therein, is to be construed as an interlocutory order. Law relating to the interlocutory order has been dealt with by the various Courts. 46. Under Section 105(1) of the Civil Procedure Code, 1908, no appeal shall lie from any order made by a Court in the exercise of its original or appellate jurisdiction; but, where a decree is appealed from, any error, defect or irregularity in any order, affecting the decision of the case, may be set forth as a ground of objection in the memorandum of appeal. 47. As per Sub-Section (2) to Section 105 of Civil Procedure Code, 1908, notwithstanding anything contained in Sub-Section (1), where any party aggrieved by an order of remand from which an appeal lies does not appeal therefrom, he shall thereafter be precluded from disputing its correctness. 48. In Maharajah Moheshur Singh Vs. The Bengal Government, (1859) 7 M.I.A. 283, 302, it was observed as follows:- We are of opinion that this objection cannot be sustained. We are....
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....Tribunal was free to arrive at its own decision on the question of liability of the petitioners to assessment to sales tax. 18. It is thus clear that it was under an erroneous interpretation of the law that the Appellate Tribunal held that it had no jurisdiction to decide the issue regarding the petitioners' liability to assessment. The order of the Appellate Tribunal is, therefore, set aside. The cases are remitted to the Appellate Tribunal for fresh disposal on the merits. The revision cases are disposed of accordingly. (emphasis applied) 51. The above view of the Full Bench of the Kerala High Court was recently followed by a Division Bench of this Court in State of Tamil Nadu Vs. Sharada Enterprises, (2019) 71 GSTR 107. 52. The Hon'ble Supreme court in Satyadhyan Ghosal and others Vs. Smt.Deorajin Debi and another, AIR 1960 SC 941, after adverting to the decisions of the Privy Council in Ram Kirpal Shukul v. Musumat Rup Kuari, (1883) 11 I.A. (P.C.) 37, observed in paragraph Nos.15 & 16 as follows:- 15. ......As regards the orders of remand it had been held that under s. 591 of the Code a party aggrieved by an order of remand could object to its validity in an appe....
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.... has been decided at an earlier stage by an interlocutory order and no appeal has been taken therefrom or no appeal did lie, a higher Court is not precluded from considering the matter again at a later stage of the same litigation. (emphasis applied) 54. In J. K. Cotton Spinning & Weaving Vs. Commissioner of Income Tax, 1963 47 ITR 906 All, one of the questions referred to the Allahabad High Court was "whether the Income Tax Officer could include the dividend income deemed to have been received by the assessee at such reassessment, which could not have been included in the total income at the time of original assessment". The High Allahabad Court answered as follows:- When an Income-tax Officer makes a fresh assessment in compliance with the Appellate Assistant Commissioners directions, he is of course bound by the directions, but, subject to them, he has the same powers as he had originally when making an assessment under section 23. The reassessment is nothing but a second assessment in substitution of the assessment made previously and set aside by the Appellate Assistant Commissioner on appeal. There are no restrictions at all on the powers of the Income-tax Officer when he....