Income Tax Appellate Tribunal - Chandigarh
Dcit, Circle, Patiala vs M/S Punjab Beverages Pvt. Ltd., Patiala on 17 December, 2018
आयकर अपील
य अ धकरण,च डीगढ़ यायपीठ "बी", च डीगढ़
IN THE INCOME TAX APPELLATE TRIBUNAL,
CHANDIGARH BENCH "B", CHANDIGARH
ी संजय गग , याय क सद य एवं ीमती अ नपणा
ू ग$ता
ु , लेखा सद य
BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER
AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER
आयकर अपील सं./ ITA No.438/Chd/2018
नधा रण वष / Assessment Year : 2001-02
M/s Punjab Beverages Pvt. Ltd., बनाम The D.C.I.T.,
60, Yadvindra Colony, The Mall, Circle Patiala.
Patiala
थायी लेखा सं./PAN NO: A A A C P 8 5 8 1 C
अपीलाथ /Appellant यथ /Respondent
आयकर अपील सं./ ITA No.446/Chd/2018
नधा रण वष / Assessment Year : 2001-02
The D.C.I.T., बनाम
Circle Patiala. M/s Punjab Beverages Pvt. Ltd.,
60, Yadvindra Colony, The Mall,
Patiala
थायी लेखा सं./PAN NO: A A A C P 8 5 8 1 C
अपीलाथ /Appellan यथ /Respondent
t
नधा रती क ओर से/Assessee by: S h r i Ta r a n d e e p S i n g h , A d v .
राज व क ओर से/ Revenue by : Shri Ashish Gupta, CIT DR
सनवाई
ु क तार#ख/Date of Hearing : 19.09.2018
उदघोषणा क तार#ख/Date of Pronouncement : 17.12.2018
आदे श/ORDER
PER ANNAPURNA GUPTA, ACCOUNTANT ME MBE R.:
Th e i m p u g n e d c r o s s a p pe a l s by the assessee and the Revenue h a v e be e n fi l ed a ga i n s t t h e o r d e r pa s s e d u/s 250( 6) of the I ncome The I ncome Ta x Act, 1961 ( herei nafter referred to as 'Act') b y t h e L d . C o m m i s s i o ne r o f I n c o m e Ta x 2 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 (Appeals), P a ti al a (in short ( " CI T( A ) " ) dated 5.1.2018 r e l a t i n g t o a s se ss m e n t y e ar 2 0 0 1- 0 2 .
2. Th i s i s s e c o n d r o u n d b e f o r e t h e I . T. A . T. a n d b r i e f f a c ts r e l a t i n g t o t he c a s e a r e t h a t th e a s s e s se e i s a d o m e s ti c c o m p a n y e n g a ged i n t h e b u s i n e s s o f m a n u f a c tu r i n g a n d t r a d i n g of s o f t d ri n k s . F o r t h e i mp u g n e d a s se s s m en t y e a r n o r e t u r n u / s 1 3 9 ( 1) o f t h e A c t h a d b e e n f i l e d , b u t i n r e s p o n s e t o n o t i c e u / s 142 ( 1 ) o f t h e A c t, t h e a s s e s s ee r e tu r n e d nil i n c o m e a c c o mp an i e d b y a l e t t e r s t a t i n g t h a t n o b u s i n e s s h a d b e e n c o n duc t e d b y t h e a s se s s e e d ur i n g t h e y e a r . Th e s a i d r e t u r n w a s h e l d t o b e a n i nv a l i d r e t u r n u /s 1 3 9 ( 9 ) o f t h e A c t , o n a c c ou n t o f d e f i c i e n c y p o i n t e d o u t t h er e i n b y t he A s s e s s i n g O ff i c e r ( A . O ) . . Th e r e a f te r , f r o m t h e r e t ur n f i l e d b y t h e a s s e s s ee f o r t h e s u b s e q u en t y e a r i . e . a s se s sm e n t y e a r 2002-03 t he A .O . noted th a t the a s s e ss e e ha d t a x a b le income for the impugned as se s s m e n t y ea r in terms of r e m i s s i o n o f l i ab i l i t y o f p a y m e nt o f i n t e re s t o n b a n k l o a n, p u r s u a n t to o n e t i m e s e t tl e m e n t w i t h t h e b an k . Ar m e d w i th t h i s i n f or m a t i on , t h e A . O. a s s u me d j u r i s di c t i o n to r e a s s e ss t h e a s s e ss e e c om p a n y f o r t h e i m p u g n e d ye a r an d i s s u e d n o t i c e u/ s 1 48 o f t h e A c t . I n re s p o n s e t o t he s a m e , t he assessee c o n ce de d that it had e n t e r ed i nt o one t i me s e t t l e m e nt w i t h P u n j a b & S i n d B a n k a nd O ri e n ta l B a n k of C o m m e r c e , as pe r w h i c h a s u m o f R s . 4 , 9 5 , 98 , 64 4 / - w a s a g r e e d t o b e p ai d i n f u l l a n d fi n a l s e t t l em e n t o f a l l t h e c l a i m s o f t h e ban k a s o n 31 . 3 . 20 0 1 . Th e a s s e s se e f u r t h er c o n t e n d e d t h a t i n s p i t e o f th e s ai d s e t tl e m e n t e nt e r e d i n to 3 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 b y t h e a s s e ss e e n o i n t e r e s t w as l i a b l e t o be ta x e d i n t h e i m p u g n e d y e ar si n c e t h e D e p a rtm e n t h a d n e v e r a l l o w e d t h e a s s e s s e e 's c l a i m o f i n t e r e st o n t he s e b a n k l o a ns i n t h e p a s t , r i g h t f r om a s s ess m e n t y e ar 1 9 9 7- 9 8 t o 1 99 8 - 9 9 a m o u n t i n g t o R s . 2 , 44 , 6 3 , 82 0 / - . Th e A . O . r e j e c t e d t h e cl a i m o f t he assessee and as s e s s e d the sa i d amount of interest of R s . 2 , 2 4 , 34 , 5 0 9 /- a s i n co m e fr om o t h e r s o u r ces , a g a i ns t w h i c h a d j u s tm e nt o f b r o u g h t f o r wa r d l o s s e s a s w e l l a s c l a i m of d e p r e c i at i o n was declined on the g r o u nd that the a s s e s s e e c o m p a ny h a d n o b u s i n es s i n c o m e d u r i ng t h e y e ar under c o ns i d e r at i o n . Th e m a t t er was c ar r i e d in a p p e al b e f o r e th e L d .CI T( A ) w h o d i s m i ss e d t h e a s s e s see ' s a p p e al . O n f u r t h e r a p pe a l t o t h e I . T. A . T. , i t w a s h e l d t h a t t he r e m i s s i o n o f i n co m e u / s 4 1 ( 1) of t h e A c t s h o u l d b e ta x ed u n d e r t h e h e a d ' I n co m e f r o m bu s i n e s s ' o n l y an d n o t as ' I nc o m e f r o m o th e r s o u r c e s '. B u t a t t h e s a m e t i m e t h e I . T. A . T. restored the matter back to the A.O. to verify w h e t h e r a n y de du c t i o n o n a c co un t o f i n t e r es t t o w a r d s b a n k l o a n w a s c l a i m e d a n d a l l o w e d . Th e I . T. A . T. f u r t h e r h e l d t h a t u n a b s o r b ed d e pr e c i a t i o n o f t h e b l o c k o f A .Y 19 9 7 - 9 8 to 2 0 0 1 - 0 2 w as n o t t o b e a l l o w e d t o b e s e t o ff a g a i ns t i n c o m e. O n r e c ei p t of t he a f o r es a i d o r d er o f th e Tr i b u n al t h e A . O. r e d u c e d t h e d e ma n d o f R s . 1 , 9 0 , 32 , 2 6 0 / - , w h i c h w a s r a i s ed p u r s u a n t t o t h e o r i g i n a l o r d e r o f a s s e s s m e n t ag a i n s t t h e a s s e s s e e , v i d e p l u s m i n u s a c co u n t N o . 8 6 o n 2 8 . 3 . 2 0 1 3. S u b s e q u e nt l y , t he A . O . f r a m ed t he a s s e s s m e nt a ga i n u n d e r t h e p r ov i s i o ns of s e c t i o n 14 3 ( 3 ) / 2 5 4 o f t h e A c t e x p r e ss i ng h i s i n a b i l i t y t o fo l l o w t h e d i re c t i o n s o f t h e H o n ' bl e Tr i b u n a l 4 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 since the a s s es s e e has f a i l ed to f u r ni s h necessary d o c u m e n t ar y e vi d e n c e s to c o rr o b o r a t e its claim. Th e a s s e s s e e w e n t i n a p p e a l a g a i ns t t h e a f o re s a i d o rd e r o f t h e A . O . c h al l e n g i n g t h e i m pu g n e d or d e r a s b e i n g n on - e s t s i n c e t h e A . O . h a d a l re a d y p a s se d a n o r d e r e a rl i e r on 2 8 - 0 3 - 1 3 a n d t h e r e c o u l d n o t b e t w o a s se ss m e n t o r de r s fo r a s s e s s i ng t h e s a me i n co m e f o r t h e sa m e a ss e s s m e n t y e a r on t h e s a m e p e r s o n . Th i s c l a i m o f t h e a s s e ss e e w a s d i s m i s se d b y t h e C I T( A ) st a t i n g th a t t h e e a r l i er o r d e r p as s e d wa s o n l y a c o m p u t a t i o n sh ee t a n d n o t a n o rd e r p a ss e d u n d er t h e A c t . Th e a s s e s s e e f u r t h e r c h a l l en g e d t h e o r d e r o n m e r i t s , to w h i c h t h e CI T( A ) h e l d t h a t t h e A . O . h a d p a s s e d t he o r d e r i n a b j e c t d i sr e g a r d o f t h e d i re c t i o ns o f t h e Tr i b u n a l , s i n c e a l l n e c e s s a r y e v i d en c e s h a d b e e n f i l e d b y t h e a ss e s s e e f o r c o m p l y i n g w i t h th e d i r e ct i o n s o f t h e Tr i b u n a l a nd / o r w e re a v a i l a b l e w i t h the A . O . i n t h e a s se s s m e n t re c o r d p e r t a i n i ng t o t h e a s s e s s ee . Th e C I T( A ) h e l d t h a t w i t h i n t h e ph r a s e o l o gy o f s e c t i o n 2 5 1 ( 1) ( a ) o f t h e A c t , h e w a s l e f t w i t h n o o p t i o n b u t t o a n n ul t he i m p u g n e d a s s es s m e n t b u t o n no t i n g t h at t h i s a c t w o u l d l e a d t o u n i n t e n de d c o n s e q ue n c e s o f c l o s ure o f t h e c a s e a s n o n - e s t o r v o i d a b i n i t i o , w hi c h w o u l d b e u n f a i r t o t h e R ev e n u e , h e d i r e c te d t h e A . O . t o c o m p l y w i th t h e d i r e c ti o n s of t h e I . T. A . T. a n d v e r i f y th e c l a i m o f t he assessee v i s - à- vi s i n t er e s t and u n a b s o rb e d dep r e c i a t i on a l l o w a n c e a n d th e r e a f t e r a s s e s s t h e i n c o m e i n a c c o r d a n ce w i t h l a w . Th e L d. CI T( A ) s t a t ed t ha t h i s a f o r es a i d d i r e c t i o ns w o u l d no t ta n t am o u n t to s et t i n g a s i d e t h e a s s e ssm e n t o rd e r a n d r e f e r ri n g t he c a s e b a c k t o t h e A . O . fo r m ak i n g f r e s h 5 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 a s s e s s m e nt w h i ch h a d b e e n o m i tt e d f r o m s e c t i o n 2 5 1 ( 1 ) ( a ) o f t h e A c t g i v i ng t h e po w e r s t o th e CI T( A ) , s i n ce t h e A . O . h a d f a i l e d t o c om p l y w i t h t h e d i r e c t i o n s o f t he I . T. A . T. a n d v i d e t h i s o rd e r th e CI T( A ) w a s o nl y d i r e c t i n g h i m t o c o m p l y w i t h t h e s a m e wh i c h d i r e c ti o n s c o u l d n o t b e c on s t r u e d as s e t t i n g as i d e of as s e s s m e n t a c c o rd i n g l y .
3. Aggri eved by th e same both t he assessee an d the Revenue have come up i n appeal before us, wi th the assessee chal l engi ng the order of the CI T( A) hol di n g that no assessment order was passed earl i er and, therefore, the assessment order i mpugned i n the present case cannot be treated as a second assessment order whi l e the Revenue has chal l enged the acti on of the CI T( A) i n restori ng the matter back to the A.O. for veri fi cati on.
We shal l fi rst be taki ng up the a ssessee's appeal i n I TA No.438/Chd/2018.
ITA No.438/Chd/2018(Assessee's Appeal):
4. Grounds rai sed by the assessee read as under:
1. That on facts and in law the Commissioner of Income Tax (Appeals) {hereinafter referred to as "CIT(A)"} has erred in not appreciating that the order of assessment dated 23th March, 2014 passed by Assessing officer {hereinafter referred to as "At)"} is non-est and bad in law in as much as after having passed an order dated 28th March, 2013 u/s 143(3)/254 of the Income Tax Act, 1961 {hereinafter referred to as "Act"} no other order giving effect to ITAT order could have been passed.
2. That on facts and in law the CIT(A) erred in treating order dated 28thMarch, 2013 as merely a computation sheet.
3. That on facts and in law the order of Assessment u/s 143(3)7254 of the Act passed by the AO is bad in law 6 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 and void ab initio."
5. As i s evi dent from the above di scussi on the i ssue to be adjudi cated i s whether the A.O. had passed "assessment order" on 28.3.2013 as a consequence of whi ch the subsequent assessment order passed on 28.3.2014 whi ch i s the i mpugned order i n the presen t case was non-e st and voi d abi ni ti o si nce t wo assessment orders coul d not be passed by the A.O. on the same person f or the same ye ar. Before precedi ng it i s, therefore, necessar y to reproduce the documents date d 28.3.2013 whi ch i s the bone of di spute bet ween the t wo parti es, wi th the assessee cl ai mi ng i t to be an assessment order, whi l e the Revenue cl ai ms it to be an admi ni strati ve document onl y. The same was fi l ed before us at Paper Book page No.32 and i s reproduced hereunder:
Income Tax Computation Name of the assesses M/s Punjab Beverages Pvt. Ltd.
Address Regd. Office # 60, Yadwindra Colony,
Patiaia
Assessment Year 2001-02
Status Company
Date of order 28.3.2013
Assessed income u/s 143(3)/147 22434509/-
Income assessed after CIT(A)' order inn
appeal no.203/08-09 dated 18.03.2011 &
I.T.A.T.
Income assessed after CIT(A)'s order in NIL
appeal no. 203/08-09 dated 18.03.2011 &
ITAT order in ITA no. 590/Chd./2011 dated 27.02.2013 Total Tax & Interest NIL Net Tax Payable NIL Demand of Rs. 19032260/- taken into +- A/c No.86 7 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 (ROHIT KUMAR) Asst. Commissioner of Income Tax, Circle, Patiala Copy to assessee"
6. Dra wi ng our attenti on to the above, the Ld. counsel for assessee stated that the sai d order was cl earl y an appeal effect order passed i n pursuance to the di rections of the I . T.A. T. i n i ts order passed i n I TA No.590/Chd/2011 dated 27.2.2013. The Ld. counsel for assessee stated that al l the contents of an assessment order fi nd mention in the i mpugned docum ent i .e. the nam e of the assesse e, the date of the order, ass essed i ncome u/ s 143( 3) /147, i n come to be assessed pursuant to order of Hon'bl e I . T.A. T., fi nal tax demand, ta x de mand pa yabl e a nd even "copy t o assess ee"
fi nd menti on i n the same. The Ld. counsel for assessee stated that al l the above are i ngredi ents of an assessment order and, therefore, for al l purposes the aforesaid document, dated 28.3.2013, was an appeal effect order. The Ld. counsel for a ssessee poi nted out that even th e A.O. had accepted the sai d fact that the impugned document was an appeal effect order i n hi s remand report dated 7.9.2016 fi l ed before the CI T( A) . Dra wi ng our attenti on to the same pl aced at Paper Book page Nos.54 an d 55, the Ld. c ounsel for assessee poi nted out that at pa ras 3 and 5 of the sai d remand report t he A.O. had ca tegori cal l y menti oned that vi de hi s order da ted 28.3.2013 th e appeal effect to the order of the I . T.A. T. i n I TA No.590/Chd/2011 was gi ven. The rel evant para Nos.3 and 5 are reproduced hereunder:
"3. The appeal effect to the .order of the hon'ble ITAT in ITA no, 590/Chd/2011 dated 27.02.2013 was given 'by 8 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 the A.O. vide order dated 28.03,2013 and the income was reduced to Nil as the appeal of the assessee was partly allowed for statistical purposes.
5. Keeping in view the facts of the case stated above, it is quite clear that the order dated 28.03.2013 was passed giving appeal effect to the order of the hon'ble ITAT dated 27.02.2013 and not an order of reassessment (copy enclosed). The reassessment order dated 28.03.2014 u/s!43(3)/254 of the Act was passed giving effect to the set aside proceedings."
7. The Ld. counsel for assessee further stated that even before the I . T.A. T. the Ld.CI T DR, duri ng the course of heari ng, had fi l ed a report of the A.O. dated 14.8.2018 ( i nadvertentl y t yped as 14.8.2017) stati ng so. Our attenti on was dra wn to fi rst para of the sai d report wherei n the A.O. had stated as under:
"Ld. AR has claimed vide page 32 of paper book submitted before Hon'ble ITAT that on 28.03.2013, an assessment order was passed by Assessing Officer. However, the said document is merely a computation sheet which was for the purpose of giving appeal effect o the directions of Hon'ble ITAT. Further, examination of assessment file shows that there isn't any assessment order which was passed on dated 28.03.2013. Since no assessment order was passed on 28.03.2013, the assessment order passed on 28.03.2014 cannot be termed re-assessment."
8. The Ld. counsel for assessee stated thereafter that i t i s tri te l a w that even the order gi ving appeal effect i s an order of assessment. Our attenti on was dra wn to the fol lo wi ng case l a w i n support of the above contenti on:
1) Caltex Oil Refining (India) Ltd. Vs. CIT, 2 02 I TR 375 ( Bom)
9. The Ld. DR at thi s juncture rebutted and st rongly supported the order of the CI T( A) stati ng that as is cl earl y evi dent from the headi ng of the document that i t i s onl y a computati on sheet reduci ng the demand pendi ng veri fi cati on 9 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 of the materi al fa cts as di rected b y the Tri bunal . The Ld. DR dre w our attenti on to the l ast sen tence of the sai d document stati ng that the "Demand of Rs.1,90,32,260/- taken i nto pl us mi nus A/c No.86, stati ng that thi s l i ne di rectl y supports the ca se of the Reven ue that the sai d sheet was onl y a computati on sheet reduci ng the demand to ni l, pendi ng veri fi cati on of the materi al facts as di rected by the Tri bunal . The L d. DR poi nted out from the order of the CI T( A) that the sai d document was not accompani ed by noti ce of demand u/s 156 of th e Act whi ch i s mandator y requi rement even i f the demand i s ni l , further supports the case of the Revenue.
10. To thi s, the Ld. counsel for assessee stated that there i s no statutor y requi rement to i ssue noti ce u/s 156 of the Act when the de mand i s ni l and that even i f the document i s ti tl ed "I ncome Ta x Computati on" it wi l l not change i ts status as bei ng assessment order ,si nce al l the ke y i ngredi ents of an assessment or der fi nd menti on therei n. Our atte nti on was dra wn to the order of the Hon'bl e Ape x Court i n the case of Kal yan Kumar Ra y Vs. CI T reported i n 191 I TR 634 ( SC) i n thi s regard. Cop y of the same wa s pl aced before us. The Ld. Counsel for as sessee further contended that si nce the demand after the I . T.A. T. order d oes not survi ve t hat i s why the A.O. vi de order dated 28.3.2013 had stated the demand as ni l , statutor y i ntent bei ng to pass an order gi vi ng effect and none of the authori ti es bel o w had been abl e to refer to the statutor y pr ovi si on supporti ng any i nteri m process of 10 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 demand to a "pl us mi nus account". The Ld. c ounsel for assessee further submi tted that the i ssue i n di spute was ans wered i n det ai l by t wo di rec t deci si ons of t he Hon'bl e Hi gh Court as under:
1) CI T Vs. Ci t y Fi nanci al Consumer Fi nance I ndia Pvt. Ltd. i n I TA No 275/2015 dated 17.7.2015 ( Del ) .
2) Cl assi c Share & stock Broki ng Servi ces Ltd. Vs. ACI T, 216 Ta xma n 238 ( Bom) .
11. The Ld. counsel for assessee fi led a bri ef s ynopsi s of hi s submi ssi ons before us whi ch i s reproduced hereunder:
A. Issue - Order of assessment dated 23rd March 2014 is bad in law in as much as after having passed an order dated 28th March 2013 no other order giving effect to ITAT order could have been passed.
B. Facts - These are second round of proceedings. It is submitted that pursuant to order dated 27th February, 2013 passed in ITA No.590/Chd/2011 by Hon'ble ITAT the AO vide order dated 23rd March, 2013 (copy enclosed at page 32) assessed the total taxable income of the appellant at Rs. NIL and also determine the tax and interest liability of the appellant at Rs. NIL. However, thereafter vide notice u/s 143(2) dated 18th October, 2013 (copy enclosed at page the AO directed appellant's attendance in his office on 4th November, 2013. Since the proceedings re-initiated by the AO vide notice u/s 143(2) was without proper jurisdiction inasmuch as effect to Hon'ble ITAT's directions had already been given by the AO earlier vide order dated 23rd March, 2013, vide letter dated 2nd November, 2013 (copy enclosed at page
33) the appellant raised objections. Thereafter vide notice u/s 143(2) dated 11th November, 2013 (copy enclosed at page 35) the AO impliedly rejected the objections raised by appellant and directed it to participate in proceedings. Pursuant thereto order dated 28th March 2014 has been passed by AO.
C. Status of document dated 28th March 2013 enclosed at page 32 of PB - It is apparent from page 32 of PB that document dated 23rd March 2013 is an assessment order giving effect to order passed by Hon'ble ITAT. All ingredients of assessment order are present:- i.e (a) name of assessee, (b) date of order, (c) assessed income u/s 143(3)/147, (d) income to be assessed pursuant to order of Hon'ble ITAT, (e) final tax demand,(f) tax demand payable, (g) copy to assessee. 11 ITA Nos.438 & 446/Chd/2018
A.Y.2001-02 AO accepts that document at page 32 of PB is issued / passed giving effect to order passed by Hon'ble ITAT. Kind reference in this regard is invited to:
(i) Remand Report dated 07th September 2016 filed by AO before CIT(A).. pgs 54-55 of PB, paras 3 and 5
(ii) Report dated 14th August 2018 (inadvertently typed as 14th August 2017) filed by A.O. before Hon'ble ITAT -
Copy filed by Ld CIT(DR) during course of hearing on 20th August 2018 Rebuttal of arguments taken by Ld CIT(A):
- It is apparent that since demand payable is 'NIL' there is no requirement to issue notice u/s 156.
- Fact that document at page 32 is titled as "Income Tax Computation" will change its status as not being an order of assessment. Key ingredients of an assessment order are determination of "total income" and "tax payable". Both these ingredients present. "Income Tax Computation" signed by AO is also part of an order of assessment. {Reference Kalyankumar Ray vs CIT reported in 191 ITR 634(SC) copy enclosed at pages 85 to 94 of PB}
- Demand after ITAT order does not survive that is why AO vide order dated 28thMarch 2013 has stated demand payable as 'Nil'. Statutory intent is to pass an order giving effect. Neither lower authorities nor Ld CIT(DR) has been able to refer any statutory provision which would support any interim processing of demand to a "+/- account".
It is submitted that in document enclosed at page 32 of PB the AO clearly states that "Income assessed after CIT(A)'s order in appeal no. 203/08-09 dated 18.03.2011 & ITAT order in ITA no. 590/Chd/2011 dated 27.02.2013" is 'Nil'. Therefore clearly "in substance and effect" the document dated 28th March 2013 is an order passed giving effect to order passed by Hon'ble ITAT as "it is in conformity with or according to the intent and purpose of the Act". (Refer section 292B} D. It is trite law that even an order giving appeal effect is also an order of assessment
- Reference in this regard is invited to decision of Hon'ble Bombay High Court in case of Caltex Oil Refining (India) Ltd reported in 202 ITR 375(Bom) wherein it is held as under:
"........So far as the first submission is concerned which relates to the nature of an order passed by the ITO in consequence of 12 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 orders of the appellate authorities with a view to giving effect to the directions contained therein, it is difficult to hold that such an order is an administrative order. The power of the ITO is to make assessment under section 143 or 144. It is that assessment which is the subject-matter of appeal. The appellate authority, on an appeal against an order of assessment, has power to confirm, reduce, enhance or annul the assessment or to set aside the assessment and refer the case back to the ITO for making a fresh assessment in accordance with the directions given by such authority (section 251). Evidently the effect of an appellate order is that the assessment either stands confirmed, reduced or enhanced or it stands annulled or set aside. In case of confirmation, reduction or enhancement the original order of assessment stands modified to the extent of the directions given by the appellate authority. In the case of annulment the order becomes non est. In case an order is set aside, the authority has to start the entire process afresh and make a fresh order of assessment complying with the directions given by the appellate authority. It is, thus, clear that what remains as a final order after giving effect to the orders of the appellate authorities is an order of assessment under section 143 or 144. It cannot be anything else.
11. This aspect of the matter also came to be considered by the Calcutta High Court in Kooka Sidhwa & Co. v. CIT [1964] 54ITR 54 in which it was held that where, pursuant to the directions of the Tribunal in an order under section 33(4) of the Indian Income-tax Act, 1922 (section 254 of the 1961 Act) to revise and amend the assessment made by the ITO, the ITO revises the assessment, the order passed by the ITO partakes of the character of a fresh assessment order and is referable only to section 23 of the 1922 Act (corresponding to sections 143 and 144 of the 1961 Act). An appeal would, therefore, lie under section 30 of the Act (section 246 of the 1961 Act) to the AAC against an order of the ITO amending or revising an assessment pursuant to the directions of the Tribunal under section 33(4) (section 254 of the 1961 Act). It was observed:
"...The Income-tax Officer's duty to assess the total income of the assessee and to determine the sum payable by him on the basis of the return under section 23 of the Act is the whole process of assessment which may end with his order or may be revised by the higher appellate authorities including the Appellate Assistant Commissioner and the Tribunal recognised by the Income- tax Act. If, therefore, such higher appellate authorities such as the Appellate Assistant Commissioner or the Tribunal directs or orders him to do something again with regard to the assessment he has already made and that by way of revision or amendment, the Income-tax Officer must be held to be still under section 23 of the Act on the process of assessing the total income of the assessee and determining the sum payable on the basis of the return already filed by him. No other construction or interpretation of section 23 of the Act seems to me to be sensible or consistent with the scheme of the Act." (p. 65) 13 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 This view is also fully supported by a decision of the Supreme Court in Garikapati Veeraya v. N. Subbiah Choudhry AIR 1957 SC 540 where it was observed:
"The legal pursuit of a remedy, suit, appeal and second appeal are really but steps in a series of proceedings all connected by an intrinsic unity and are to be regarded as one legal proceeding." (p. 540) This view was reiterated recently by the Supreme Court in Umaji Keshao Meshram v. Smt. Radhikabai AIR 1986 SC 1272 where it was observed that an appeal is not a fresh proceeding but merely a continuation of the original proceedings.
12. In the light of these decisions and for the reasons given above, we are of the opinion that the impugned order of assessment passed by the ITO pursuant to the directions of the appellate authorities with a view to giving effect to the directions contained therein is an order of assessment within the meaning of section 143 or section 144 of the Act and an appeal lies under section 246(c) against such an order."
E. Direct Precedents on the issue - It is submitted that issue in dispute is answered in detail by two direct decisions of Hon'ble High Courts. There cannot be two assessment orders for assessing the same income in the same assessment year on the same person. References:
* Hon'ble Delhi High Court decision in case of CIT vs. City Financial Consumer Finance India Pvt. Ltd. vide order dated 17th July, 2015 in ITA No.275/2015 copy enclosed at pages 64 to 72 of PB - relevant conclusions at pages 68 to 71, paras 8 to 12.
* Hon'ble Bombay High Court decision in case of Classic Share & Stock Broking Services Ltd vs ACIT reported in 216 Taxman 238(Bom) copy enclosed at pages 95 to 98 of PB - relevant conclusions at page 97, para 6."
12. We are not convi nced wi th the arguments of the Ld. counsel for assessee that the documents dated 28.3.2013 was an order passed by the A.O. for the purpose of thi s Act and, therefore, t he subsequent or der passed dated 28.3.2004 agai nst whi ch the assessee has c ome up i n appeal before the fi rst appel l ate authori t y and eve n before us, i s n ul l i t y or i s voi d. Goi ng through the contents of the documents fi l ed before us and the arguments made by both the parti es we 14 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 agree wi th the L d.CI T( A) that thi s contenti on rai sed by the assessee is not onl y mi spl aced but al so egregi ousl y mi sl eadi ng and we shal l e xpl ai n i n detai l the re asoni ng for the same.
13. To deci de whethe r the document is an assessment order or not i t woul d be necessar y to l ook i nto the Act and understand what i t sti pul ates to be an assessment order. Secti on 143( 3) of the Act states that the A.O. shall by an order i n wri ti ng make an assess ment of the total i ncome or l oss of the asses see and determi n e the same pa ya bl e by hi m or refund of any amount due to hi m on the basi s of such assessment. The provi si ons of the rel evant secti on are bei ng reproduced hereunder for cl ari t y:
"143[ ( 3) [ On the d ay s pec if ied in the no tice issued under] sub-sec tio n ( 2), or as soo n af ter war ds as may be, af ter he ar ing such ev idence as the assessee may pr oduce and such o ther ev idence as the Assess ing Of f icer may req u ire on s pec if ie d po in ts, and af ter tak ing in to acc oun t al l rel ev an t mate r i al wh ich he h as g athere d, the Assess in g Of f icer shal l , b y an order in wr i tin g, make an assess men t of the to tal inco me or l oss of the assessee, and de ter mine the su m p ayabl e b y h i m o r ref und of an y amo un t due to h i m on the b as is of such assess men t: ]"
14. I t i s evi dent from the above tha t an assessment order necessari l y has t wo components;
i ) deal i ng wi th t he assessment o f the total i nco me or l oss of the assessee and i i ) determi ni ng the ta x pa yabl e by hi m or the r efund due to hi m.
15. The Hon'bl e Ape x Court i n the case of Kal yan Kumar Ra y ( supra) has, whi l e i nterpreti ng thi s sub secti on, hel d 15 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 that assessment i s one i ntegrate d process i nvol vi ng not onl y the assessment of the total i ncome but al so the determi nati on of the ta x and tha t the l ater i s as cruci al for the assessee as the former. The Hon'bl e Ape x Court hel d that the I ncome Ta x Offi cer has to determi ne by an order i n wri ti ng not onl y the total i ncome but al so the net sum whi ch wi l l be pa yabl e by the assessee for the assessment year i n questi on. The rel evant fi ndi ngs of the Hon'bl e Apex Court i n thi s regard are as under:
"Sri S. Padmanabhan, learned Counsel for the petitioner, invited attention to the language of Section 143(3) of the Act which mandates that the I.T.O. "shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him on the basis of such assessment". The Department pointing to the placement of a comma after the word "assessee" suggested before the Tribunal that an order in writing is required only for the assessment of the income or loss and that the determination of the sum payable can be an independent process not necessarily in writing. The suggestion seems plausible but is not really tenable. As pointed out for the petitioner, judicial decisions under the 1922 Act as well as the present Act have read both clauses together. Assessment is one integrated process involving not only the assessment of the total income but also the determination of the tax. The latter is as crucial for the assessee as the former. Section 144, which also describes the same process, makes no distinction as suggested. It will not be therefore correct to read the provision, as leaving undefined the process of determination of the net sum payable by the assessee. In our opinion, therefore, learned Counsel for the petitioner is right in his submission that the Income Tax Officer has to determine, by an order in writing, not only the total income but also the net sum which will be payable by the assessee for the assessment year in question and that the demand notice under section 156 has to be issued in consequence of such an order."
16. Havi ng sai d so what l ogi cal l y fol l o ws is tha t the assessment of i ncome has to necessari l y precede the cal cul ati on of ta x pa yabl e.
16 ITA Nos.438 & 446/Chd/2018
A.Y.2001-02 I n the present case the document before us i s headed "I ncome Ta x Co mputati on". Ther efore, i t i s onl y the second component of th e assessment or der. No w there necessari l y has to be a asse ssment of i ncom e precedi ng i t. Thi s can be ei ther i n the order of the I . T.A. T. where the i ncome i s assessed gi vi ng al l fi ndi ngs wi th regard to the same, l eavi ng the computati on of ta x to the A.O. or i f not so there has to be a separate order passed by the A.O. assessi ng the i ncome. On goi ng through the contents of the order of the I . T.A. T. we fi nd that there i s no fi ndi ng vi s-à-vi s the computati on of total i ncome of the assessee. The I . T.A. T. i n i ts di recti ons has asked the A.O. to veri f y whether any deducti on on account of i nterest to wards bank was cl ai med and all o wed and then deci de the i ssue i n accordance wi th l a w. I n fact, we fi nd that the I . T.A. T. had categori cal l y menti oned that there i s no fi ndi ng to thi s effect i n the orders of the A.O. or even the appel l ate au thori ti es. Thi s i s cl ear from para 25 of the order of the I . T.A. T. gi vi ng such a di recti on as under:
"25. As far as taxability of this amount u/s 41 is concerned, it was contended that the assessee has not claimed deduction on account of interest and the same has not been allowed by the Department. However, perusal of the assessment order or appellate order do not show that there is a finding to this effect. Therefore, we remit this issue back to the file of Assessing Officer with the direction to verify whether any deduction on account of interest towards bank was claimed and allowed and then decide; the issue in accordance with law."
17. The I . T.A. T. had al so di rected the A.O. to not al l ow set off of unabsorbed depreci ati on whi ch i s outsi de the bl ock of assessment years 1997-98 to 2001-02. No w consi deri ng the di recti ons gi ven i n para 25 of the order of the I .T.A. T. i t i s 17 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 cl ear that even t he total i ncome h as not been asse ssed or ta x has been computed by the I . T.A. T. but has been left to the A.O. to do i n the set asi de proceedi ngs. Al so admittedl y, no order has been passed by the A.O. assessi ng the assessed i ncome of the assessee, precedi ng thi s computati on of i ncome ta x. Th erefore, for al l purposes thi s i ncome ta x computati on doc ument cannot be treated as an or der passed by an A.O. gi vi ng effect to the di recti ons of the I .T.A. T. We do not fi nd any meri t i n the cont enti on of the Ld. counsel for assessee, therefore, that al l the i ngredi ents of the assessment order are present i n i t, because i t i s onl y an i ncome ta x computati on and not an order passed u/s 143( 3) r. w.s. 254 of the Act and as state d above, a mere i ncome ta x computati on sheet, despi te cont ai ni ng other i ng redients of an assessment order cannot be treated as an assessment order unl ess and unti l i t i s preceded by an order computi ng the i ncome of the assessee. That no separate order has been passed assessi ng the ta xabl e i ncome of th e assessee consequent to th e di recti ons of t he I . T.A. T., i s ev i dent from the fact that the sai d document menti ons the i ncome assessed both "after the CI T( A) ' order and I . T.A. T.'s order". I f i t woul d an asse ssment order pa ssed i n conseque nce to the di recti ons of the I . T.A. T., there was no reason at al l to menti on i ncome assessed after the CI T( A) 's order. I n fact, we fi nd meri t i n the contenti on of the Revenue that thi s was onl y a computation sheet pendi ng veri fi cati on of the materi al facts as di rected by the I . T.A. T. and whi ch consti tuted part of the procedure fol l o wed by the Department i n every such 18 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 case. I t was poi nted out to us that on recei vi ng orders from the appel l ate authori ti es the A.Os are di rected to pass orders gi vi ng effect to the appel l ate orders rai si ng demand or i ssui ng refund to the assessee i mmedi atel y thereafter and in thi s process w here certai n i s sues are set asi de for veri fi cati on to t he A.O, a com putati on of ta x i s prepared wherei n demand i s rai sed on a ccount of addi ti ons made, reduced on account of rel i ef granted and al so reduced on account of i ssues whi ch are set asi de for veri fi cati on si nce on account of th e setti ng asi de o rder of the A.O., the orde r no l onger survi v es and so al so t he demand and i t i s onl y subsequentl y when the set asi de i ssue i s deci ded that a fresh demand i s rai sed on the assessee. I t was pointed out that such a procedure i s fol l o wed to update the record of ta x recoveri es so that ta xes due after appeal s are effecti vel y col l ected and i n cases where the demand i n nul l i fi ed, ei ther on account of del eti on of addi ti ons made or where matters are set asi de an d the ori gi nal or der does not su rvive, thi s procedure hel ps i n avoi di ng not i ces of recover y of demand bei ng unnecessari l y i ssued. We also do not fi nd any meri t i n the contenti on of the Ld. counsel for assessee that even the A.O. had admi tted to thi s fact t hat the docume nt was an appeal effect order. I t need not be poi nted out by us, si nce i t i s abundantl y cl ear, that the na ture of the docu ment i s not determi ned by the averments of the person prepari ng i t but i s to be determi ned from the co ntents of the sa me. Even other wi se the Ld . counsel for as sessee i s merel y tryi ng to read the averments of the A.O. i n thi s regard out of conte xt. 19 ITA Nos.438 & 446/Chd/2018
A.Y.2001-02 What the A.O. has stated i n hi s Remand Report i s onl y i n consonance to w hat the Departm ent has been pl eadi ng al l al ong that such documents are t o be prepared o n recei vi ng the appel l ate or ders and i s bei ng i ncorrectl y read as an order gi vi ng effect to the di recti ons of the I .T.A. T. The rel i ance pl aced by the Ld. counsel for assessee on the deci si on of the Hon'bl e Bomba y Hi gh Court i n the case of Cal te x Oi l Refi ni ng ( I ndi a) Ltd. (supra) i s, we fi nd, of n o assi stance to the assessee si nce i t deal t wi th the i ssue of whether an order gi vi ng effect to the orders of appel l ate authori ti es coul d be treated as an assessment order. I n the present case si nce we have hel d that the i mpugned document was not an order at al l gi vi ng effect to the di recti ons of the I . T.A. T., the sai d deci si on i s of no hel p to the assessee. Al so, the deci si ons reli ed upon by the Ld. counsel for assessee of the Hon'bl e Hi gh Court in t he case of Ci t i Fi nanci al Consumer Fi nance I ndi a Pvt. Ltd. ( supra) and of the Hon'bl e Bomba y Hi gh Court i n the case of Cl assi c Share & Broki ng Servi ces Ltd. ( su pra) i s al so of no assi stance to th e assessee si nce the y are cl earl y di sti ngui shabl e on facts. I n both the sai d cases though the i ssue was whether t wo assessment orders coul d be passed by an A. O., there was a categori cal fi ndi ng of fact that the fi rst was an order p assed u/s 254/143( 3) of the Act whi ch i s absent i n the present case. The d ocument i n the present c ase i s headed i ncome ta x computati on wh i l e in those ca ses the docum ents were headed or passed u/s 254/143( 3) of the Act. The refore, the sai d orders are agai n of no assi stance of the assessee. I n 20 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 vi e w of the above we uphol d the order of the Ld.CI T( A) di smi ssi ng the cl ai m of the assess ee that the i mpu gned order or so second assessment order are hence voi d.
The appeal of the assessee i s, therefore, di smi ssed. ITA No.446/Chd/2018(Revenue's Appeal) :
18. We shal l no w be taki ng up the appeal of the Revenue. Grounds of appeal rai sed by the Revenue are as under:
"1. Whether in the facts and circumstances of the case, the Ld. CIT(A), Patiala is legally correct in adjudicating by setting aside the order of the Assessing Officer passed u/s 143(3)/254 of the Income Tax Act, 1961 when the assessee failed to substantiate its claim which has been provided in books of accounts and not claimed in the return of income (by the assessee) by not producing the books of accounts before the Assessing Officer during the re- assessment proceedings (giving effect to the order of Hon'ble ITAT).
2. It is prayed that the order of Ld. CIT(A) be set-aside and that of the Assessing Officer be restored.
3. The appellant craves leave to add or amend any grounds of appeal before the appeal is heard and finally disposed off."
19. The Revenue i n the present case has chal l enged the di recti ons of the CI T( A) setti ng a si de the order o f the A.O. and di recti ng hi m to compl y wi t h the di recti ons of the I TAT. The Ld. DR has contended that s i nce the assesse e fai l ed to substanti ate i ts cl ai m by not produci ng the rel evant records before the A.O., there was no qu esti on of setti ng asi de the i ssue agai n to the A.O. The Ld. D R al so contended that the CI T( A) had no po wer u/s 251( 1) to set asi de the assessment order and, therefore, the i mpugned di recti ons of the CI T( A) was bad i n l a w. The Ld. counsel for assessee, on the other 21 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 hand, rel i ed upon the fi ndi ngs of the CI T( A) at paras 13 to 16 of the order as under:
"13. The other ground of appeal challenges the action of the AO in ignoring the documents adduced before him by the appellant in terms of profit and loss account, computation of total income, assessment orders and appellate orders for A.Ys. 1985-86 to 2000-01, which would have clearly indicated that the appellant company had neither claimed nor allowed any deduction on account of interest payable to Punjab & Sindh Bank in earlier years so that the remission of liability to that effect could not be brought to tax by invoking the provisions of section 41 (1) of the Act, as directed by the Hon'ble Tribunal. It was further stated that the appellant had diligently furnished before the AO, in the remand proceedings, a chart of the cumulative unabsorbed depreciation allowance for A.Ys. 1979-80 to 1996-97 along with copies of assessment and appellate orders for the said years, evidencing the working of cumulative depreciation allowance computed in the chart.
14. On a vigilant perusal of the aforesaid submissions and details, it becomes evident that the Assessing Officer has brazenly failed to follow the directions of the Hon'ble Tribunal qua the verification of the appellant's claim or allowance thereof in respect of interest accruing on the bank loans in the years earlier than the assessment year under consideration so as to decide on the taxability of remission of liability to the extent of Rs.2,24,34,509/- pursuant to the "one-time settlement" with the Bank. For such verification, the AO only needed to carefully scan the profit and loss account, computation of total income, assessment orders and the appellate orders for the earlier years, which documents were reconstructed and duly furnished before the AO. Beside, the said documents must have been available on the record of the Department so a be confirmed about the veracity of the documents placed before the AO in the remand proceedings, the AO being the custodian of assessment records. From even a cursory perusal of the said documents adduced in the appellate proceedings, the claim of the appellant that such interest, though provided interest he books, were neither claimed nor allowed interest eh earlier assessment proceedings or in the tax computations accompanying the return of income for the earlier years, seems to be in order. The only issue remains that the same have not been verified from the departmental records or the veracity of such orders have not been checked by the AO as per the directions of the Hon'ble Tribunal. Similarly, cumulative 22 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 unabsorbed depreciation could only be verified from the copies of the assessment and appellate orders for A.Ys. 1979-80 to 1996-97, which were duly placed before the AO at the time of effecting order under section 143 (3)/254 as also during the remand proceedings directed by this appellate authority for the finalisation of the instant appeal. However, the AO is seen to have been stubbornly refusing to look at the records for such verification even in the remand proceedings directed by this appellant authority. The only reason intelligible for such an act on the part of the AO seems to be to oust the decision of the Tribunal in giving appropriate relief to the appellant. It is also not understood as to what documents the AO is looking for to discharge his obligation of following the directions of the Hon'ble Tribunal, which had attained finality as per the provisions of section 254 (4) as the proposal of filing appeal under section 260A before the jurisdictional High Court against the subject order of the Hon'ble Tribunal dated 27/02/2013 was not approved vide communication dated 03/07/2013 from the office of the then CCIT, Chandigarh.
15. Considering the entirety of the circumstances, it is held that there has been an abject disregard of the directions of the Hon'ble Tribunal. Since the AO has failed to comply with the specific directions, the impugned order cannot possibly see the light of the day.
Within the phraseology of section 251 (1) (a) of the Act, this appellate authority is left with little scope but to annul the impugned assessment. However, it is felt that an annulment would have the unintended consequence of closure of the case as non est or void abinitio, which would be unfair to the Department. The AO is, hereby directed to comply with the directions of the Hon'ble ITAT, Chandigarh viz verify whether the appellant company has claimed deduction of interest, accrued and provided in the books, in the earlier years. If the appellant is found to have claimed the said deduction in the earlier years, then the remission of liability shall be taxable as per the provisions of section 41 (1) of the Act as business income. If not, there shall not be a case of taxability of the said remission. Similarly, the AO is required to verify the claim of the appellant about the cumulative unabsorbed depreciation allowance of Rs.3,86,91,993/- for the assessment years other than A.Ys. 1997-98 to 2001- 02. If the said claim of the appellant is found to be correct on verification of the records, the AO shall be required to set off such amount, should there be an assessed income during the year under consideration. It is ordered accordingly.
16. However, before parting, it is necessary to spell out the reasons as to why the aforesaid direction to the AO should not be considered as unauthorised in view of the amendment of section 251(l)(a) by the Finance Act, 2001, w.e.f. 1-6- 23 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 2001 which ommitted the words "or he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment in accordance with the directions given, by the Commissioner (Appeals) and after making such further enquiry as may be necessary, and the Assessing Officer shall thereupon proceed to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment". The scope and effect of the aforesaid omission was elaborated by the Departmental circular No. 14 of 2001 to state that the Commissioner (A) may not set aside the assessment and refer the case back to the Assessing Officer for making fresh assessment and that the Commissioner (A) continues to have the powers under section 250 of making further enquiry, or directing the Assessing Officer to make further enquiry and report the result of the same to him, which can be made use of in appeals needing further enquiry or gathering of additional facts or evidence. The intention behind the said omission was to help bringing about an early finalisation to the assessment and to avoid prolonging the process of litigation. In effect, what was withdrawn from the powers of the CIT(A) was the authority to issue directions to the AO to reframe the assessment in a particular manner after carrying out the analysis or investigation as suggested by him. This, however, in the opinion of this appellate authority does not exclude the direction to the AO to comply with the directions of the appellate authorities superior to the CIT(A). In the instant case, the assessment has not been set aside for making fresh assessment by the AO as per the directions of this appellate authority. On the contrary, since the order of assessment earlier passed by the Assessing Officer merged with the orders passed by the Hon'ble ITAT, the AO was, thereafter, duty bound to carry out the compliance of the directions of the ITAT. Since the AO has failed to do the same, vide the instant appellate order, he has been directed to carry out the compliance of the order of the ITAT that had become final. Such directions cannot possibly be construed as setting aside of assessment. This issue has earlier been assayed by the Hon'ble High Court of Rajasthan in the case of Commissioner of Income Tax, Udaipur Vs Hindustan Zinc Ltd, reported in [2012] 22 taxmann.com 248 where it was held that directions issued by Commissioner (A) to the AO to comply with the directions of the ITAT would not amount to setting aside of the assessment. Paras 20 & 21 of the said order of the Hon'ble High Court of Rajasthan is extracted herein below for the purposes of reference :
"20. This apart, in the present case, as observed hereinbefore, the factual aspect has been that the order passed by the AO which was subject of appeal before the CIT(A), was not an original order of 24 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 assessment but was an order of assessment passed after remand by the IT A T. The directions in remand order having not been complied with, the course as adopted by the CIT (A) cannot be said to be de hors the powers available to him tinder the statute.
21. On the facts and in the circumstances of the present cases, we are clearly of the view that even if the appeal had been filed after the amendment to section 251(l)(a) of the Act, 1961, the order as passed by the CIT(A) directing the AO to decide the matter in accordance with the directions of the ITAT cannot be said to be unauthorised...".
In view of the aforesaid observations, the Assessing Officer is directed to comply with the directions of the Hon'ble ITAT. It is ordered accordingly.
20. We have heard the ri val contenti ons and gone through the orders of t he authori ti es b el o w. We do no t fi nd any reason to i nterfere i n the wel l -reasoned order of the CI T( A) . The CI T( A) has cl earl y poi nted out that the A.O. has brazenl y fai l ed to fol l o w the di recti ons of the I . T.A. T. qua the veri fi cati on the assessee's cl aim in respect of i nterest accrui ng on bank l oans i n the earl i er years and even set off of unabsorbed depreci ati on pertai ni ng to the bl ock peri od 1997-98 to 2001 -02. The CI T( A) has noted that t he assessee had fi l ed al l necessar y documents before hi m for veri f yi ng these cl ai ms by wa y of Profi t & Loss Account, computati on of i ncome, assessment orders and appel l ate orders for earl i er years despi te the same the A.O. has fai l ed to do as di rected, and had stubbornl y refused to l ook i nto such records. These fi ndi ngs of the CI T( A) have not been controverted by the Revenue. Therefo re, the fi ndi ngs of the CI T( A) to the effect that the A.O. ha s total l y di srega rded the di recti o ns of the I . T.A. T. i s correc t. We al so agree wi th the Ld.CI T(A) that i n such ci rcumstan ces, the i ssue ne eded to be sent back to the 25 ITA Nos.438 & 446/Chd/2018 A.Y.2001-02 AO for re-veri fi cati on and the sai d act coul d not be sai d to be setti ng asi de the assessment order whi ch the CI T( A) was prohi bi ted from doi ng u/s 251( 1) of the Act. The reasoni ng of the CI T( A) that i n the present ca se assessment order has not been set asi de for maki ng fresh assessment by the A.O. but si nce the earl i er order passed by the A.O. merged wi th the order passed by the I . T.A. T., th e A.O. was dut y bound to compl y wi th the di recti ons of the I . T.A. T. and hav e fai l ed to do so the CI T( A) has onl y di rect ed hi m to compl y with the di recti ons of the I . T.A. T. whi ch does not tantamount to setti ng asi de the assessment framed by the A.O. Reli ance pl aced by the C I T( A) on the dec i si on of the Ho n'bl e Hi gh Court i s apt, w herei n i t has b een categori cal l y held that despi te the amended secti on 251( 1) ( a) of the Act order passed by the CI T( A) di recti ng th e A.O. to deci de the matter i n accordance wi th the di recti ons of the I . T.A. T., cannot be sai d to be unauthori zed. I n vi e w of the above, we do not fi nd any meri t i n the appeal of the Revenue and the same i s di smi ssed.
21. I n effect, both the appeal s of the assessee and the Revenue are di smi ssed.
O r d e r p r on o u n c ed i n t h e O p e n Cou r t .
Sd/- Sd/-
संजय गग अ नपणा
ू ग$ता
ु
(SANJAY GARG ) ANNAPURNA GUPTA)
याय क सद य/Judicial Member लेखा सद य/Accountant Member
*दनांक /Dated: 17th December, 2018
*रती*
26 ITA Nos.438 & 446/Chd/2018
A.Y.2001-02
आदे श क त*ल+प अ,े+षत/ Copy of the order forwarded to :
1. अपीलाथ / The Appellant
2. यथ / The Respondent
3. आयकर आय-त
ु / CIT
4. आयकर आय-त
ु (अपील)/ The CIT(A)
5. +वभागीय त न0ध, आयकर अपील#य आ0धकरण, च2डीगढ़/ DR, ITAT, CHANDIGARH
6. गाड फाईल/ Guard File आदे शानसार ु / By order, सहायक पंजीकार/ Assistant Registrar