Itat/147/2023 Ia No: Ga/1/2023 Arun Kumar Bose v. Income Tax Officer, Ward-1(1), Siliguri

OD – 3 IN THE HIGH COURT AT CALCUTTASPECIAL JURISDICTION (INCOME TAX)ORIGINAL SIDE ITAT/147/2023IA NO: GA/1/2023ARUN KUMAR BOSEVS INCOME TAX OFFICER, WARD-1(1), SILIGURI BEFORE:- THE HON'BLE THE CHIEF JUSTICE T. S. SIVAGNANAM -A N D-HON'BLE JUSTICE HIRANMAY BHATTACHARYYADATE : 2[nd] AUGUST, 2023. Appearance :Ms. Sutapa Roychoudhury, Adv.Ms. Aratrika Roy, Adv.…for appellantMr. Om Narayan Rai, Adv.…for respondent The Court :- This appeal by the assessee filed under Section260A of the Income Tax Act, 1961(the Act) is directed against theorder dated February 09, 2023 passed by the Income Tax AppellateTribunal “B” Bench, Kolkata (the Tribunal) in ITA No. 465/Kol/2022for the assessment year 2014-15. The assessee has framed followingsubstantial questions of law for consideration :- i)Whether on the facts and circumstances of the case theLearned Tribunal was justified in upholding the order ofthe CIT(A) when the same is beyond the scope and powerLearned Tribunal was justified in upholding the order ofthe CIT(A) when the same is beyond the scope and power vested upon the CIT(A) under the provisions of Section251(1)(a) of the said Act ? ii) Whether in the facts and circumstances of the case whenthe additions made in respect of the sundry creditorsnamely M/s. Goodwill Corporation (India), M/s. QualityUdyog and M/s. Swastik Trading & Manufacturing Co.were directed to be deleted as being unsustainable can besubject to the enquiries conducted by the AssessingOfficer ? We have heard learned Counsel on either side. The short question involved in this appeal is whether theCommissioner of Income Tax (Appeals), Siliguri CIT(A), after havingfully agreed with the assessee and reached a conclusion that theassessing officer committed an error in making certain additions,could have remanded the matter back to the assessing officer forcertain verifications. Section 251 of the Act deals with the powers ofthe Commissioner of Appeals. Sub Section (1) states that in disposingof an appeal the Commissioner (Appeals) shall have the powers asenumerated in clauses (a), (aa), (b), (c). In so far as the case on hand,clause (a) of Section 251(1) of the Act should be relevant, which statesin an appeal against the order of assessment the Commissioner(Appeals) may confirm, reduce, enhance or annul the assessment. Ona reading of the Finance Act, 2001 (Circular No. 14 of 2001) theCommissioner of Appeals had no power to remand the matter back tothe assessing officer for fresh assessment in accordance with the direction given by the Commissioner (Appeals) after making suchfurther enquiry as may be necessary. Though such power wasconferred on the Commissioner (Appeals), the said provision stoodomitted by the Finance Act, 2001. In the explanatory notes on theprovisions relating to direct taxes, the powers of the Commissioner(Appeals) has been dealt with in paragraph 78.1 which reads asfollows :- “78.1. Under the existing provision contained in sub-section (1)of section 251 of the Income-tax Act, in an appeal filed before aCommissioner (Appeals) against an order of assessment, theCommissioner (Appeals) may confirm, reduce, enhance or annulthe assessment, or he may set aside the assessment and referthe case back to the Assessing Officer for making a freshassessment in accordance with the directions given by him, aftermaking such further enquiry as may be necessary. With a viewto help bringing about an early finalisation to the assessmentand to avoid prolonging the process of litigation, the Act hasamended section 251 so as to provide that, in an appeal filedbefore the Commissioner (Appeals), against an order ofassessment, the Commissioner (Appeals) may not set aside theassessment and refer the case back to the Assessing Officer formaking fresh assessment. The Commissioner (Appeals)continues to have the powers under section 250 of makingfurther inquiry, or directing the Assessing Officer to make furtherinquiry and report the result of the same to him, which can be made use of in appeals needing further enquiry or gathering ofadditional facts or evidence. 78.2This amendment will take effect from 1[st] June, 2001.” In the light of the above statutory embargo, the Commissionercould not have remanded the matter back to the assessing office afterhaving decided the case in favour of the assessee in its entirety. The learned standing Counsel for the respondent/revenuepoints out that in the findings recorded by the CIT(A), the expression“prima facie” has been used which shows that the CIT(A) had wanteda fresh exercise to be done by the assessing officer and, therefore, itwould have been well open to the CIT(A) to call for a remand reportand thereafter to enquiry into the matter and proceed to take decision.Therefore, it is the submission that the case should be remanded backto CIT(A) to undertake such an exercise. We have heard the learned Advocate for the appellant on theabove submission. Though in the order passed by the CIT(A), the word“prima facie” has been used, from a cumulative reading of an orderpassed by the CIT(A) we find that the case has been discussed onmerits and thereafter a finding has been recorded that the assessingofficer was not justified in making the addition and there was apositive direction to delete the addition. If such is the finding, mereuse of the word “prima facie” could not make prima facie view as theCIT(A) has discussed the matter elaborately taking into theconsideration the factual position. Before the learned Tribunal, theassessee had specifically raised the ground that the CIT(A) exceeded the limits of powers statutorily bestowed as per Section 251(1)(a) ofthe Act and grossly erred in law in restoring the case to the assessingofficer for action in terms of the order dated 23.11.2011 passed by theCIT(A). Though, such a specific ground raised by the appellant beforethe Tribunal and noted by the Tribunal in paragraph 3 of theimpugned order, this aspect has not been dealt with by the learnedTribunal. Thus, in our view not only the CIT(A) committed an error oflaw by remanding the matter to the assessing officer for a freshconsideration after having held in favour of the assessee, the Tribunalalso did not deal with the said issue. In the light of the statutoryembargo, the order of remand passed by the CIT(A) is not tenable inlaw and consequently, the same required to be set aside as well as theorder passed by the learned Tribunal. One more reason as to why the order of the learned Tribunalhas to be interfered with is that the impugned order has been passedin an appeal filed by the assessee and in such an appeal the assesseecannot be in a words off position as the learned Tribunal has goneinto the correctness of the finding of the CIT(A) who held in favour ofthe assessee and thereafter has recorded his opinion. Admittedly, therevenue had not challenged the findings rendered by the CIT(A) whichwas in favour of the assessee. Therefore, this is also one more error of law which has beencommitted by the learned Tribunal justifying the interference with thesaid order. For the above reasons, the appeal is allowed and the substantialquestions of law are answered in favour of assessee. Consequently, the application stands disposed of. (T. S. SIVAGNANAM) CHIEF JUSTICE (HIRANMAY BHATTACHARYYA,J.) SN/GH.