Income Officer, Ward v. Shailendra Kr

IN THE HIGH COURT OF JUDICATURE AT PATNAMiscellaneous Appeal No.236 of 2008 ====================================================== 1.Commissioner of Income Tax-1, Patna 2.Income Officer, Ward No.2, Biharsharif, Nalanada .... Assessing Officer/Appellant Versus Shailendra Kr.Prop. M/s Neha Petroleum, Gandhi Tola Rajgir, Nalanda .... Assessee/Respondent ====================================================== Appearance : For the Appellants : Mr. Rishi Raj Sinha, Sr. Standing Counsel, Ms. Archana Prasad, Jr. Standing Counsel For the Respondent : Mr. Ajay Kumar Rastogi, Advocate Mr. Manish Rastogi, Advocate ====================================================== CORAM: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA and HONOURABLE DR. JUSTICE RAVI RANJAN ORAL ORDER (Per: HONOURABLE MR. JUSTICE RAMESH KUMAR DATTA) 5 01-12-2014 Heard learned counsel for the appellant-Income Tax Department and learned counsel for the respondent. The present appeal under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) has been filed against the impugned order dated 17.10.2007 passed by the Income Tax Appellate Tribunal, Patna Bench in ITA No.308/Pat/07 arising out of assessment year 2001-02, by which the appeal preferred by the Department has been dismissed. The facts of this case on its merit are not relevant rather the manner in which the case has proceeded would be relevant for the decision of the present matter. The assessment order was passed on 31.03.2004 with respect to the assessment year 2001-02 by the Income Tax Officer, Biharsharif (Nalanda). 2 The Commissioner of the Income Tax-I, Patna initiated suo motu proceedings under Section 263 of the Act and by his order dated 10.02.2005 set aside the assessment order and directed the assessing officer to make fresh assessment after making thorough inquiry regarding the advances totalling to Rs.30,30,400/- in the account titled “Advances from Customer” appearing in the Ledger, for which purpose the A.O. was directed to obtain confirmations from the concerned creditors and examine their creditworthiness and after making inquiry pass a fresh assessment order in accordance with law. Aggrieved by the same, the respondent-assessee preferred an appeal before the Income Tax Appellate Tribunal, Patna Bench, being I.T.A. No.368/Pat/2005, which was allowed by the order dated 06.02.2007 holding that the order passed by the CIT is silent about the erroneousness of the order passed by the A.O. as well as the resultant prejudice caused to the interest of revenue and further it cannot be said that the A.O. has not examined the account maintained by the assessee in its books of accounts and, therefore, the order passed by the CIT is not satisfying the ingredients that are to be established before passing an order under Section 263 of the Act and the said order under appeal was, accordingly, quashed. Aggrieved by the same, the Income 3 Tax Department preferred Miscellaneous Appeal No.214 of 2007 before this Court, which was dismissed in limine on 28.10.2013 holding that the appeal does not involve the question of law much less a substantial question of law. 3 Tax Department preferred Miscellaneous Appeal No.214 of 2007 before this Court, which was dismissed in limine on 28.10.2013 holding that the appeal does not involve the question of law much less a substantial question of law. In the meantime, pursuant to the order of remand passed by the Commissioner of Income Tax on 10.02.2005, a fresh assessment order dated 31.03.2006 was passed. Aggrieved by the same, the respondent-assessee filed Appeal No.097/06-07 which was allowed byorder dated 01.03.2007 holding that the order of CIT-I, Patna, under Section 263 of the Act, on the basis of which the impugned order has been passed, has been quashed by the ITAT by allowing the appeal filed by the appellant and as the order of the CIT passed under Section 263 of the Act has been quashed by the ITAT, the impugned order becomes devoid of any basis. Aggrieved by the same, the Revenue filed again an appeal before the Income Tax Appellate Tribunal, Patna Bench being I.T.A. No.308/Pat/2007, which has been dismissed by the impugned order dated 17.10.2007. Aggrieved by the same, the Income Tax Department is before this Court. In support of his stand, learned counsel for the appellants relied upon a decision of a Full Bench of the Punjab and Haryana High Court in the case of Punjab State Civil 4 Supplies Corporation Ltd. V. Commissioner of Income- Tax : [1993] 200 I.T.R. 536, in the last part of which judgment it has been held as follows “We, consequently, hold that once an appeal against an order of the Income-tax Officer under section 143(3) of the Act has been heard and decided by the Appellate Assistant Commissioner, the Commissioner under Section 263 has no jurisdiction with regard to issues considered and decided in appeal. In other words, his jurisdiction is restricted only to that part of the order of assessment which is not dealt with in appeal. We answer the question referred to us accordingly. There will be no order as to costs.” In our view, the said Full Bench decision of the Punjab and Haryana High Court has no applicability to the present issue before us. What has been laid down in the said case does not at all arise in the present matter as in that case the revisional jurisdiction has been sought to be invoked against an appeal from an order of the Income Tax Officer passed under Section 143(3) of the Act and in the circumstances, it was held that the jurisdiction of the Commissioner under Section 263 of the Act could be restricted only to that part of the order of assessment which is not dealt with in the appeal as the order of the Income-tax Officer has been merged with that of the Appellate Assistant Commissioner. In the present matter, the SC/- Sanjay II U very basis of the subsequent assessment order dated 31.03.2006 is the order of remand passed by the Commissioner under Section 263 of the Act and that order of remand has been quashed and set aside by the Income Tax Appellate Tribunal vide order dated 06.02.2007 which has further not been interfered with by this Court in Miscellaneous Appeal No.214 of 2007. In the said circumstances, the very jurisdiction of the assessing officer to reassess on remand under Section 263 of the Act goes away and any order passed by him would be non estand without any authority of law. We, thus, see no reason to differ with the view taken by the CIT vide his order dated 01.03.2007 or by the Tribunal in its order dated 17.10.2007. The appeal being devoid of any question of law much less substantial question of law is, accordingly, dismissed. (Ramesh Kumar Datta, J) (Dr. Ravi Ranjan, J)