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PR. Commissioner of Income Tax, Delhi-2 Versus Citi Financial Consumer Finance India Pvt. Ltd.

2015 (8) TMI 53 - DELHI HIGH COURT

Power of the AO to pass the Order - CIT(A) held that the Assessment Order dated 21st January, 2010 for AY 1998-99 had attained finality and thus, the AO had no jurisdiction to pass another Assessment Order for the same Assessment Year confirmed by ITAT - Revenue, contends that the order dated 20th January, 2010 was a mistake, as the AO had not implemented the directions of the Tribunal to re-examine the nature of relevant expenditure incurred by the Assesse - Held that:- A plain reading of the l .....

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the intent of purposes of the Act. Learned counsel appearing for the Revenue has been unable to point out any mistake or omission in the AOs order dated 19th November, 2010. The issue involved is not about a mistake in the said Order but the power of the AO to pass the Order. Clearly, the said Order is not in accordance with provisions of the Act, as the AO has no power to frame the assessment in respect of an AY which has already been finalised and concluded. The language of Section 292B of th .....

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t an administrative order but an Assessment Order under Section 143(3) of the Act. In the circumstances, it is not be open for the Revenue to contend to the contrary. - Decided against revenue. - ITA No. 275/2015 - Dated:- 17-7-2015 - S. Muralidhar And Vibhu Bakhru,JJ. For the Appellant : Kamal Sawhney, Sr. Standing Counsel For the Respondents : Mr C S Aggarwal, Sr. Adv. with Mr Prakash Kumar, Adv. ORDER 1. The Revenue impugns the decision of the Income Tax Appellate Tribunal dated 26th Septembe .....

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dated 19th November, 2010 passed by the Assessing Officer ('AO') under Section 254 read with Section 143(3) of the Act for the Assessment Year ('AY') 1998- 99. The CIT(A) accepted the contention that the said Assessment Order dated 19th November, 2010 was without jurisdiction as the AO had already passed an Assessment Order under Section 254 read with Section 143(3) of the Act for the AY 1998-99 on 21st January, 2010. The CIT(A) held that the said Assessment Order dated 21st Janu .....

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bruary, 2000 disallowing the Assessee's claim in respect of commission paid to Direct Selling Agents. In addition, the AO also disallowed an expenditure of ₹ 35,91,227/- incurred by the Assessee for purchase of software. The AO held that the nature of these expenses was capital and not revenue. 3. The Assessee appealed against the aforesaid additions/disallowances made by the AO before the CIT(A). However, the Assessee was not successful and the CIT(A) confirmed the disallowances made .....

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se of software. 5. Mr Sawhney, learned counsel appearing for the Revenue, contends that the order dated 20th January, 2010 was a mistake, as the AO had not implemented the directions of the Tribunal to re-examine the nature of relevant expenditure incurred by the Assesse. He submitted that, subsequently, the AO rectified the said mistake by once again passing an order on 19th November, 2010. Mr Sawhney contends that the Tribunal erred in not examining the issues on merits and failed to consider .....

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terthought and there was no mistake or error in the AO's order dated 20th January, 2010. He submitted that at the material time when the order dated 20th January, 2010 was passed, the Tribunal had already examined the issues regarding expenditure incurred on commission paid to Direct Selling Agents and on purchase of software, in the context of the assessment framed in the AYs 2001-02 and 2002-03; the Tribunal in its order dated 18th December, 2009, passed in ITA No.461/Del/2005 and 2473/Del .....

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sed by the Supreme Court. 7. Mr Aggarwal also referred to the decision in Caltex Oil Refining (India) Pvt. Ltd. v. Commissioner of Income Tax 1993 202 ITR 375 Bom in support of his contention that the nature of the order passed by the AO in consequence of the order of the Tribunal was not administrative. 8. We have heard the counsel for the parties. 9. The Tribunal had upheld the view that the AO's order dated 20th January, 2010 had given effect to the directions of the Tribunal contained in .....

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. Clearly, once the assessment proceedings have been finalised, the AO would have no jurisdiction to pass a fresh order, except in specific circumstances and after following the procedure contemplated under the Act. Admittedly, no fresh proceedings either under Section 263, Section 154 or Section 147/148 of the Act were initiated. There is no provision in the Act permitting multiple Assessment Orders. Thus, the second Assessment Order dated 19th November, 2010, passed by the AO was wholly withou .....

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erely by reason of any mistake, defect or omission in such return of income, assessment, notice, summons or other proceeding if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act." 11. A plain reading of the language of Section 292B of the Act indicates that it would have no application in the facts and circumstances of the present case. First and foremost, Section 292B of th .....

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2010. The issue involved is not about a mistake in the said Order but the power of the AO to pass the Order. Clearly, the said Order is not in accordance with provisions of the Act, as the AO has no power to frame the assessment in respect of an AY which has already been finalised and concluded. The language of Section 292B of the Act also offers no assistance to the Revenue in its contention that AO's order dated 20th January, 2010 was a mistake. 12. The contention that the Order dated 20th .....

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the Appellate Authority remands the matter to the AO, the AO is required to commence proceedings in terms of the directions of the Appellate Authority. Such proceedings are not administrative but have to be conducted in accordance with the provisions of the Act and the order passed by the Assessing Officer would not be in the nature of Administrative Order but would be an Order of assessment under Section 143/144 of the Act. In Caltex Oil Refining (supra) a Division Bench of the Bombay High Cour .....

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