Calcutta High Court
Fu Sheen Tannery And Anr. vs Income-Tax Officer And Ors. on 1 April, 2003
Equivalent citations: (2003)185CTR(CAL)76, [2003]262ITR456(CAL)
JUDGMENT Bhattacharya, J.
1. By this writ application the writ petitioner has challenged an assessment order passed by the Assistant Commissioner of Income-tax, Circle 32, thereby making an assessment under Section 144/145(3) of the Income-tax Act, 1961. Mr. Bhattacharjee, learned counsel appearing on behalf of the petitioner, has raised a pure question of law in support of this writ application and as such this writ application has been taken up for hearing before inviting affidavit from the respondents.
2. Mr. Bhattacharjee points out that in the past another order was passed by such Assistant Commissioner and against such order the petitioner preferred an appeal before the Commissioner of Income-tax (Appeals) and the said appellate authority by order dated August 31, 1999, set aside the order passed by the assessing authority. Mr. Bhattacharjee contends that after the assessment order was set aside by the appellate authority the said order attained finality and there was no scope of reassessment by the Assistant Commissioner.
3. Bhattacharjee in this connection relies upon the provision contained in Section 251 of the Income-tax Act and submits that the appellate authority has the power to confirm, reduce, enhance or annul the assessment or he may set aside the assessment and refer the case back to the Assessing Officer with specific direction and in such a case the Assessing Officer gets jurisdiction to reopen such matter. Mr. Bhattacharjee submits that in the present case the appellate authority merely set aside the order of assessment but did not give any direction to the Assistant Commissioner to reopen the assessment. In the absence of any such direction, Mr. Bhattacharjee continues, the order impugned is without jurisdiction.
4. This application has been opposed by the respondents authority and Mr. Ghosh, learned counsel appearing on behalf of the respondents, by placing reliance upon the observation of the appellate authority in paragraph 6 of the judgment of the appellate authority submits that if the said paragraph is read as a whole it would appear that the intention of the appellate authority was to direct the assessing authority to reopen the assessment. Mr. Ghosh, however, frankly concedes that if specific direction was given in the said order, there would have been no ambiguity.
5. Therefore, the only question that arises for determination in this application is whether by virtue of annexure P-1, the order of the appellate authority, any right was conferred upon the assessing authority to reopen the assessment. To appreciate the aforesaid question the entire paragraph 6 of the order of the appellate authority is quoted below :
"I have carefully considered the rival submissions and, I find that the additions were made without making available materials like reports, of the inspector and valuer on the basis of which conclusions were drawn. The claim of the assessee that most of the purchases were on the basis of sales tax permit issued by the commercial tax authority requires re-examination. It may also be seen as to how much of the purchases were effected by cheque. Regarding valuation the appellant should be provided with opportunities to produce such materials as they may consider necessary to rebut the observations of the Valuation Officer. By the Assessing Officer's own admission the issues will need considerable time to explore, investigate, enquire and to ascertain the actual position. In this view of the matter, the assessment is set aside."
6. After hearing learned counsel for the parties and after going through the aforesaid paragraph 6, I find that the appellate authority held that the claim of the assessee that the most of the purchases were on the basis of sales tax permit issued by the commercial tax authority required re-examination. Regarding valuation, the said authority was of the view that the petitioner should be provided with opportunities to produce such materials as it may consider necessary to rebut the observation of the Valuation Officer. But, in the penultimate sentence of the said paragraph the said authority observed that by the Assessing Officer's own admission those "issues would need considerable time to explore, investigate, enquire and to ascertain the actual position". Ultimately, taking into consideration such fact, the appellate authority set aside the order of assessment.
7. It is needless to mention here that no direction for reassessment has been given in the order impugned. It is, therefore, clear that the appellate authority was quite conscious of the admission of the assessing authority that if the matter is remanded for fresh assessment it would require considerable time to explore, investigate, enquire to ascertain actual position and thus decided to set aside the order of assessment without giving any direction for assessment. I, thus, find substance in the contention of Mr. Bhattacharjee that the order amounted to annulment of the assessment in toto.
8. The assessing authority, therefore, acted without jurisdiction in reopening the assessment notwithstanding the fact that such right was not conferred upon him by the appellate authority. There is no dispute that the order of the appellate authority has not been impugned by the Department and as such the same has attained finality.
9. I, thus, set aside the order impugned on the ground that the Assistant Commissioner acted without jurisdiction in reassessing the matter in the absence of any direction from the appellate authority.
10. The writ application is, thus, allowed.
11. In the facts and circumstances, there will be no order as to costs.
12. All parties are to act on a xerox signed copy of this dictated order on the usual undertaking.