Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2009 (10) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2009 (10) TMI 77 - AT - Income TaxAnnulling the block assessment order - The issue involved before this Hon'ble Special Bench is keeping in view the two judgments of the Hon'ble Supreme Court in the case of Rajesh Kumar & Ors. vs. Dy. CIT and in the case of Sahara India (Firm) vs. CIT, assessment framed in the instant case is required to be set aside to the AO to pass a fresh assessment or the assessment framed is held to be time-barred. HELD THAT:- the present assessee i.e., M/s Sushila Milk Specialities (P) Ltd. was also a party before the Hon'ble Supreme Court in the judgment delivered in the case of Rajesh Kumar & Ors. vs. Dy. CIT and as such the judgment dt. 1st Nov., 2008 rendered by the Hon'ble Supreme Court is also a judgment rendered in assessee's own case. In the said case, their Lordships have held that before passing an order u/s. 142(2A), directing the assessee to obtain a special audit of its accounts, principles of natural justice are required to be observed. The Larger Bench of Supreme Court decided the matter in Sahara India (Firm) vs. CIT and agreed with the decision of the Supreme Court in the case of Rajesh Kumar & Ors. vs. Dy. CIT. Firstly, it is to be noted that the Supreme Court itself has earlier raised a doubt about the correctness of its decision in the case of Rajesh Kumar & Ors., therefore, Larger Bench was constituted. Hon'ble Supreme Court while referring the matter to Larger Bench observed as under: "A close reading of the decision shows that the observation in this regard appears to have been made in the context of the assessment in terms of s. 158BC (block assessment). Such assessments are relatable to a case when raid has been conducted at the premises of an assessee. Had that being so, limited to the facts involved in that case, we would have negatived the contentions of the learned counsel for the petitioner. But certain observations of general nature have been made. The effect of these observations appears to be that in every case where the AO issued a direction in terms of s. 142(2A), the assessee has to be heard before such an order is passed. This does not appear to be the correct position of the law. Since the assessee herein is one of the parties before the Supreme Court in the case of Rajesh Kumar & Ors., the decision of Larger Bench of Supreme Court in the case of Sahara India (Firm) should not be applied. This contention is also unacceptable to us. Under Art. 141 of the Constitution of India the law as laid down by the Hon'ble Supreme Court is binding on all. If a Larger Bench does not agree with the earlier view of Division Bench of Supreme Court, the law to be applied will be that as propounded by Larger Bench and not the Division Bench. In the present case, apart from the fact that on a plain reading of s. 29(8)(b), it is manifestly clear that fresh assessment for the asst. yr. 1995-96, framed pursuant to the order passed by the appellate authority on 8th June, 2000, was well within the prescribed time, even otherwise, in the light of the aforestated settled law, the assessment orders in question could not be held to be null and void on account of the stated irregularities committed by the AO during the course of assessment proceedings. Applying the decisions of Hon'ble Supreme Court in the case of Guduthur Bros. [1960 (7) TMI 5 - SUPREME COURT] as also in the case of Deepak Agro Food [2008 (7) TMI 553 - SUPREME COURT] and in View of the observations of the Hon'ble Delhi High Court in the case of Rajesh Kumar us. CIT,[2009 (4) TMI 306 - DELHI HIGH COURT], We answer the question referred for the opinion of Special Bench as under: In view of the two decisions of the Hon'ble Supreme Court namely Rajesh Kumar & Ors. vs. Dy. CIT [2006 (11) TMI 135 - SUPREME COURT] and Sahara India (Firm) [2008 (4) TMI 4 - SUPREME COURT], the assessment is required to be set aside to the file of the AO to pass a fresh assessment as held in the case of Rajesh Kumar vs. Dy. CIT by Tribunal in its order dt. 3rd (sic-30th) June, 2008 and do not hold the assessment as time barred as held in the case of Asstt. CIT vs. Rakesh Kumar. We, therefore, approve the view taken by the Tribunal in the case of Rajesh Kumar and do not approve the decision of Tribunal in the case of Asstt. CIT vs. Rakesh Kumar[2008 (6) TMI 239 - ITAT DELHI-I]. In view of the findings above, the learned CIT(A) erred in annulling the block assessment order passed by the AO. Therefore, we hold that the assessment cannot be annulled in the present case but is required to be restored back to the file of the AO for framing an assessment afresh after affording reasonable opportunity of being heard to the assessee. In the result, the appeal of the Revenue is allowed
|