As Assessing Officer ‘hurriedly’ made assessment order; Court held C.I.T. under its Suo Motu Revisional Jurisdiction, has correctly ordered re- assessment for re- considering the issues.
Civil Appeal No. 5009 of 2016
Bench: Justice Ranjan Gogoi; Justice Prafulla C. Pant
Case Brief: In the present case, the Revenue comes in an appeal challenging the order of the High Court by which that Court had dismissed the appeal filed by it under Section 260A of the Income- Tax Act, 1961, however, that court had affirmed the decision of the Income Tax Appellant Tribunal. The controversy in this case was connected with the assessment year 2001- 2002 and assessment order of 2004. The assessee- respondent herein was issued with the show cause notice in 2005 under section 263 of the Act by the Commissioner of Income- Tax and about eleven issues were involved. Assessee responded to the same and thereafter in 2006 order was passed by Commissioner by which the order of assessment of 2004 was set aside and fresh assessment proceedings were directed. Assessee challenged the said decision before the Tribunal and that Tribunal allowed the challenge in 2007. But revenue again filed the aforementioned appeal which was dismissed by the High Court, holding that as the Commissioner had gone beyond the scope of the show cause notice and had dealt with the issues not covered in the said notice the revisional order of 2006 was in violation of principles of natural justice. Thus, the present appeal, in which now this bench observed that the assessment in this case was set aside by the Commissioner on the main ground that the requisite and due enquiries were not made by Assessing Officer. However, Commissioner also considered that despite the several opportunities the assessee did not submit the requisite books of account and documents and deliberately dragged the matter leading to one adjournment after the other, as such the Assessing Officer hurriedly finalize the assessment proceedings. As such the necessary enquiries were not made as such assessment was came to be treated as erroneous. However, the Commissioner arrived at the conclusion on the issues which were not specifically mentioned in the show cause notice.
The bench also observed that the Tribunal in appeal opined that Commissioner should not have gone beyond the issues mentioned in the show cause notice. The bench further observed that the opinion provided by the Commissioner was perfectly justified, as this case was fit case for Commissioner to exercise its suo motu revisional powers under section 263 of the Act. However, the decision of Tribunal and High Court to interfere with the conclusion of the Commissioner was incorrect, as per bench. As such, this bench restored the Commissioner’s order and other orders of Tribunal and High Court were set aside. Revenue’s appeal is as such allowed by this bench. However, the bench added that as the re- assessment order of 2006 of the Commissioner had not been tested on merits the assessee would be free to do so, if he is so inclined and so advises.
Read the Judgement: Commr.Of I. T-I.Mumbai Vs. Amitabh Bachchan