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2016 (10) TMI 253 - HC - Income TaxCIT(A) jurisdiction to consider the status of the appellant as an AOP - disallow of remuneration as interest to the partners - Held that:- As rightly pointed out by Ms.T.C.A.Sangeetha, learned counsel for the appellant, contradictions in the statement of the Commissioner of Income Tax, Appeals-4, Chennai from the above two paragraphs extracted supra, is apparent. Though at one stage, the Commissioner of Income Tax, Appeals-4, Chennai makes a prima facie statement, regarding the status of the appellant as an AOP, in the sur rejoinder dated 15.01.2016, the appellate authority has stated that there is no predetermination of the issue, and that it has not been concluded yet. Whether the impugned show cause notice dated 6.11.2015, has to be set aside, on the grounds of jurisdiction, or to allow the Commissioner of Income Tax, Appeals to decide the status of the assessee. The authority, in his affidavit on oath has stated that, the issue is yet to be decided. True that in the earlier years, the issue was not raised. Merely because, it was not raised, it cannot be said that the Commissioner, has no powers to decide, if the Assessing Officer, has failed to advert to the said aspect. On this aspect, we are of the considered view, that it is only a show cause notice and it is always open to the appellant to respond. While considering the scope and powers of the appellate authority, under the Income Tax Act, 1961, courts have consistently held that the power of the first appellate authority are coteminous with that of the Assessing Officer and that the appellate authority can do what the Assessing Officer ought to have done and also direct the latter to do what he has failed. Appeal is also continuation of original proceedings and unless some fetters are placed upon the powers of the appellate authority by express words, the appellate authority can exercise all the powers as that of the original authority. If the Assessing Officer, has erred in concluding the status of the assessee as a firm, it cannot be said the Commissioner of Appeals, has no jurisdiction to go into the issue. In the light of the averments on oath, in the sur rejoinder, made before this court, and on the facts and circumstances of the case, we are of the considered view that the Commissioner of Income Tax, Appeals-4, Chenai, without being influenced by any of the observations made in the impugned show cause notice dated 6.11.2015, should decide the status of the assessee, with reference to the satutory provisions, and decisions relied on, and simultaneously, consider the explanation, materials and supporting documents, if any to be filed by the appellant, in response to the show cause notice and accordingly answer, as to whether disallowance should be made or not, depending upon the answer on the first issue. Writ Appeal is disposed of in the above terms. However, there shall be no order as to cost. Consequently, the connected civil miscellaneous petition is closed. Inasmuch as the matter pertains to adjudication, where the appellant is required to be heard in person and evidence, if any, to be recorded, an outer limit of six weeks time is fixed. Taking note of the above, appellant is directed to submit the reply/objections, within such time, to be fixed by the Commissioner of Income Tax, Appeals, and the respondent is directed to pass orders, at the earliest, notwithstanding the outer limit fixed by this court. Appellant is directed to extend cooperation and not to protract the proceedings, except, for bonafide cause. It is made clear that if for any bonafide or genuine reasons, the respondent is not in a position to pass orders, within the time frame fixed by this court, contempt proceedings shall not be entertained.
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