TMI Blog2013 (3) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ing to validity of proceedings initiated under section 148 of the Act had been taken which was not gone into by the Commissioner of Income Tax (Appeals) while setting aside the assessment. The principles laid down by the Apex Court in the case of Sun Engineering Works P. Ltd. (1992 (9) TMI 1 - SUPREME COURT) would not apply as the appellant is not claiming any deduction or relief on the taxibility of any item in the reopened assessment proceedings which had not been claimed in the original assessment. The Tribunal had also erred in law in holding that as no appeal had been filed by the appellant against the order 05.02.1998 passed by the Commissioner of Income Tax (Appeals), the same had become final and the appellant cannot be permitted to raise any ground relating to the validity of the proceedings under section 148 of the Act in the remand proceedings. Tribunal has erred in law in so far as it refused to permit the appellant to raise the ground Nos. 1 to 4 and, therefore, the same cannot be sustained. - matter remanded to ITAT - Decided in favor of assessee. - Income Tax Appeal No. 67 of 2005 - - - Dated:- 24-1-2013 - R. K. Agrawal And Surat Ram (Maurya), JJ. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Allahabad, who vide order dated 03.03.2000 partly allowed the appeal. Minor relief was allowed. The proceedings initiated under section 147/148 of the Act was confirmed. Feeling aggrieved, the appellant preferred a second appeal before the Tribunal. The Tribunal by the impugned order had partly allowed the appeal. We have heard Sri Suyash Agrawal, learned counsel for the appellant and Sri Shambhu Chopra, learned senior standing counsel appearing for the Revenue. Learned counsel for the appellant submitted that the appellant had specifically raised a ground challenging the validity of the proceedings initiated under section 148 of the Act in the appeal preferred before the Commissioner of Income Tax (Appeals), Allahabad against the order dated 21.03.1997 and as the assessment order was set-aside, the Commissioner of Income Tax (Appeals) Allahabad did not go into that question. It was again raised before the Commissioner of Income Tax (Appeals) in the appeal preferred against the order dated 04.10.1999 but the Commissioner of Income Tax (Appeals) while deciding the appeal vide order dated 03.03.2000 had declined to go into this question on the wrong premise that the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ration to the various plea raised by the learned counsel for the parties. We find that against the order dated 21.03.1997 passed by the Assessing Officer under section 147/148 of the Act, the appellant in the memo of appeal preferred before the Commissioner of Income Tax (Appeals), Allahabad had specifically questioned the proceedings initiated under section 148 of the Act. The ground No. 1 taken in the memo of appeal is reproduced below: - "1. That proceedings initiated under section 148, are wholly illegal and without the jurisdiction and have no nexus with the material on record." The Commissioner of Income Tax (Appeals) while deciding the appeal vide order dated 05.02.1998 had set-aside the assessment on the short ground that reasonable opportunity was not given. He did not go into the other grounds taken in the memo of appeal. The Commissioner of Income Tax (Appeals) has noted that there are as many as 11 grounds in appeal. However, while allowing the appeal, he has dealt with the matter as follows: - "I have considered the matter and am of the opinion that in the facts and circumstances of the case it would be in the interest of justice to set-aside the assessment to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. (supra). 4. That there is neither any material nor any reason to believe for taking action under section148 of the Income Tax Act inasmuch as the I.T.O. failed to disclose the said material or reason to the appellant during the course of assessment proceeding an as such I.T.O's order is vitiated in law." The Tribunal in paragraph 9 did not admit the additional grounds of appeal Nos. 1 to 4 by holding as follows : - "Originally the assessment order dated 21st March, 1997, for the Assessment Year 1990-91, was set aside by order dated 5th February, 1998 of the Ld. CIT (A), with the direction to the AO to reframe the assessment after giving the opportunity to the assessee. The assessment order dated 21.03.1997 was challenged by the assessee before the Ld. CIT (A) but no ground relating to the issue of notice under section 148, was taken by the assessee. No appeal has been filed by the assessee against the order of the Ld. CIT (A) dated 5th February 1998. Therefore, order dated 05.02.1998 has become final. As no grounds were raised against the original assessment order dated 21.03.1997 regarding issue of notice under section148, now the assessee cannot raise this ground becau ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh assessment order made in accordance with law after removing the defects pointed out by it, of course, when the case goes back to the assessing authority, the assessing auhority would while making assessment, be bound by the findings, if any, recorded by the appellate authority on the basis of material already on the record and he will have to make the final assessment treating such finding as binding on him, but as while completing the assessment proceedings it is open to the assessing authority to make such enquiry as it likes and to take notice of fresh material which come to his knowledge before making the assessment order. The assessing authority will be able to reconsider the findings, if any recorded by the appellate authority on the basis of the additional material coming to its knowledge. 14. It, therefore, follows that where an assessment made under section 7 of the Act is set aside by the appellate authority and the case is remanded to the assessing authority, the assessing authority has, subject to carrying out the directions made by the appellate authority with regard to making of enquiries, the same power as it originally had for making the assessment under that s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ulfilled. The order of reassessment was, therefore, not valid. In the case of Ishwar Singh (supra), this Court has held that the issue of notice under section 148(1) is the condition precedent to the validity of an assessment under section 147. It is a jurisdictional issue and unless such a notice is issued the Income Tax Officer does not get jurisdiction to make an assessment on a particular assessee. In the case of DCIT (Assessment) (supra), the Gujarat High Court has held that the set aside of the assessment made by the appellate authority is always in accordance with the directions given by the appellate authority for making a fresh assessment. But, the most material part of the provision is the opening portion which stipulates "In an appeal against an order of assessment". In other words, the entire gamut of powers which are available to the appellate authority is governed within the four corners of the subject-matter of appeal. The subject-matter of appeal is the assessment of income which forms part of the order of assessment in the light of the return of income filed by an assessee. Examining the facts of the present case in the light of the aforesaid decision, it is ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lable to the Assessing Officer while making a fresh assessment pursuant to a set aside." In the case of Cavinkare P. Ltd. (supra), the Chennai Bench of the Income Tax Appellate Tribunal has held that the assessee cannot be permitted to convert the reopened proceedings as his appeal or revision, in disguise, and seek relief in respect of items not claimed in the original proceedings unless relatable to escaped income and reagitate the concluded matters. From the aforesaid decisions, it follows that (i) a question relating to jurisdiction which goes to the root of the matter can always be raised at any stage, be in appeal or revision, (ii) initiation of proceedings under section 147 of the Act and/or service of notice are all questions relating to assumption of jurisdiction to assess escaped income, (iii) if an issue has not been decided in appeal and the matter has simply been remanded, the same can be raised again notwithstanding with the fact that no further appeal has been preferred, (iv) in the reassessment proceedings, relief in respect of item which was not originally claimed cannot be claimed again as the reassessment proceedings are for the benefit of the Revenue and (v) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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