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2013 DIGILAW 1539 (MP)

Pramod Kumari Singhal v. Income Tax Officer

2013-12-09

S.C.SHARMA, SHANTANU KEMKAR

body2013
JUDGMENT Shantanu Kemkar, J. 1. With consent heard finally. By filing this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice, dated 27-2-2013 (Annexure P-4) issued by the Income Tax Officer, Circle 2(1), Indore (hereinafter referred to as Assessing Officer) under Section 147 of the Income Tax Act, 1961 (for short "the Act"). 2. The petitioner submits that merely on the basis of direction of CIT (Appeals) contained in the order dated 12-11-2012 passed in appeal filed by the petitioner for the Assessment Year 2008-09 the assessment for the year 2007-08 could not have been reopened by the Assessing Officer as has been done vide impugned notice (Annexure P-4). In support of this contention, learned Counsel for the petitioner has placed reliance on the judgment passed by the Supreme Court in the case of Commissioner of Income Tax, Kerala Vs. Manick and Sons, AIR 1969 SC1122. 3. Shri R.L. Jain, learned Senior Counsel placed reliance on two orders passed by a Division bench of this Court on 14-3-2013 in Writ Petition No. 1565/ 2013, Computer Science Corporation India Pvt. Ltd. Vs. Additional Commissioner of Income Tax, Range 2 and another and in Writ Petition No. 2044/20 13, Computer Science Corporation India Pvt. Ltd. Vs. Assistant Commissioner of Income Tax, Circle 2, Indore. 4. In the case of Commissioner of Income Tax, Kerala Vs. Manick and Sons, the Supreme Court in Paragraph 5 and in Paragraph 11 has observed thus: - "5. An assessment which has become final may be reopened in appeal by the Appellate Assistant Commissioner or the Tribunal or in revision by the Commissioner, or under an order of rectification of mistake, or pursuant to a notice of reassessment. The Tribunal hearing an appeal may give directions for reopening assessment of the year to which the appeal relates: it cannot give any directions to reassess in case of a period not covered by that year. There is no sanction in law to enforce the undertaking by the respondent when urging his appeal in respect of the year 1953-54, to make a voluntary return for the year 1952-53; and even if the respondents carried out that undertaking the assessment of 1952-1953 could not be reopened otherwise than in the manner prescribed by law. The undertaking must, therefore, be ignored. The undertaking must, therefore, be ignored. Under Section 33 (4) of the Income Tax Act, 1922, the Income Tax Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit. The power conferred by that sub-section is wide, but it is still a judicial power which must be exercised in respect of matters that arise in the appeal and according to law. The Tribunal in deciding an appeal before it must deal with questions of law and fact, which arise out of the order of assessment made by the Income Tax Officer and the order of the Appellate Assistant Commissioner. It cannot assume powers, which are inconsistent with the express provisions of the Act or its scheme. 11. Turning then to the questions: --Counsel for the respondents conceded that the Tribunal had no jurisdiction to direct the Income Tax Officer to re-open the assessment for the year 1952-53. He submitted however, that the Tribunal did not give any such directions: it merely recorded an undertaking given by the respondents that they will voluntarily submit a return for Rs. 50,000/- for the year 1952-53. But, the context in which the statement recording the undertaking occurs in Paragraph 7 of the judgment of the Tribunal and the direction given in Paragraph 8-A leave no room of doubt that the Tribunal did give a direction to the Income Tax Officer to re-assess the income for the year 1952-53. On the answer to the first question no further enquiry need be made on the second question.'' 5. This Court in the cases relating to Computer Science Corporation India Pvt. Ltd. (supra), after taking into consideration the stand taken by the respondents in the return filed in W.P. No. 1565/2013 to the effect that such directions by the CIT (Appeals) are not binding on the Assessing Officer and the Assessing Officer has to take the decision independently as per law, passed following order in W.P. No. 1565/2013 "6. Shri R.L. Jain, learned Senior Counsel appearing for the respondents submitted that the directions, which have been made are not binding in nature and it is open for the AO to act independently in accordance with law. Shri R.L. Jain, learned Senior Counsel appearing for the respondents submitted that the directions, which have been made are not binding in nature and it is open for the AO to act independently in accordance with law. In Paragraph 5.37 of the return filed on behalf of the respondents we find a categorical stand taken by the respondents 'that the findings and observations mentioned in the appeal order were required to be looked into and a decision was to be taken by learned AO independently as per law. Further, the AO is not bound to agree with the findings and observations given by the learned CIT (A) and as per the Income Tax Act no binding directions can be issued to AO except under Section 144-A by the Additional or Joint Commissioner of Income Tax'. In Paragraph 5.40 of the return, it has been further stated on behalf of the respondents that the learned CIT (A) has only mentioned his findings and observations and no binding directions were issued as the learned CIT (A) cannot issue any binding direction for other assessment years which is sub-judice. 7. Having considered the submissions made by learned Counsel for the parties and in view of the categorical stand taken by the respondents in reply to the petition in Paragraphs 5.37 and 5.40 as extracted above, we dispose of this petition by observing that the directions contained in Para 5 and its sub-paragraphs of the impugned order passed by CIT (A) shall not be construed to be of binding nature by the AO and it will be open for AO to proceed with, the assessment proceedings in accordance with law uninfluenced by the said impugned observations/directions contained in the impugned order." 6. We have examined the directions contained in the order dated, 12-11-2012 passed by the CIT (Appeals) in the appeal filed by the petitioner pertaining to the Assessment Year 2008-09 and the impugned notice issued by the Assessing Officer under Section 147 of the Act,, and we find that the impugned notice has not been issued independently but has been issued merely on the basis of the directions issued by the CIT (Appeals) in the appeal relating to the year 2008-09. 7. 7. Therefore, in view of the law laid down by the Supreme Court and the stand taken by the revenue in similar case relating to Computer Science Corporation India Pvt. Ltd. (supra), the impugned notice, which has not been issued independently, but has been issued only on account of the directions contained in the order dated 12-11-2012 passed by the CIT (Appeals ) cannot be sustained. 8. In the circumstances, we allow this petition by quashing the impugned show-cause notice (Annexure P-4) issued by the Assessing Officer, however, with liberty to the Assessing Officer to take fresh steps against the petitioner in accordance with law, if so advised, uninfluenced by observations/directions issued by the CIT (Appeals). 9. The writ petition stands allowed to the extent indicated above. Parties to bear their own costs. C.C. with 3 days.