Order of remand by ITAT does not give rise to any substantial question of law warranting an appeal, under Section 260-A of the Income Tax Act
ABCAUS Case Law Citation:
ABCAUS 3094 (2019) (07) HC
The instant appeals were filed under Section 260-A of the Income Tax Act, 1961 (the Act) against the order passed by the Income Tax Appellate Tribunal (ITAT) remanding the matter to the Assessing Officer for considering the matter afresh, after affording an opportunity to the assessees to put forth their defense on all aspects, as directed by the High Court.
In the instant case, the assessees had filed their return of income for the relevant Assessment Year. Later, on the ground that some part of the income had escaped assessment, proceedings under Section 147 of the Act were initiated, by issuing a notice under Section 148.
The appellants-assessees filed their reply stating that the original return of income may be treated as the return filed in response to the notice under Section 148 of the Act. The assessee also sought for the reasons recorded, for the issuance of notice under Section 148 of the Act, to be supplied to them which were furnished.
Challenging the notice issued under Section 148 of the Act, the assessees preferred a Writ Petition which were dismissed. Aggrieved thereby, the assessees-appellants filed a Special Appeal and a Division Bench of the Hon’ble High Court, in its order observed that interference under Article 226 of the Constitution was not justified in the facts of the case; and it was open to the appellants (assessees) to raise all such contentions, as were available to them in law, before the statutory authority.
The Division Bench had disposed of the appeal leaving it open to the assessees to pursue the statutory remedy which the learned Single Judge had earlier held was to approach the Assessing Officer. In view of the paucity of time, the assessees, instead, preferred the Special Appeals before the Division Bench.
During the pendency of the Special Appeals, revised assessment orders were passed by the Assessing Officer. Since the assessees could not have approached the Assessing Officer, thereafter, they preferred an appeal to the Commission of Income Tax (Appeals) and, on the appeal being rejected, they invoked the jurisdiction of the ITAT contending, among others, that the notice under Section 148(1) of the Act was not an effective service of notice.
The Tribunal noted that the learned Single Judge had observed that the High Court was not inclined to entertain the writ petition for quashing the notice issued under Section 148 of the Act; it would be appropriate for the petitioner (assessees) to approach the Assessing Officer and reply to the notice; and it was always open to the petitioner to take all the pleas, before the Assessing Officer, which they had taken before the Court.
The Tribunal further observed that there was some force in the submission of the assessees that, when the order was passed by the learned Single Judge, they because of the paucity of time, could not have prosecuted their defense effectively before the learned Assessing Officer as only five days were left for the assessment to be completed. Therefore, the Tribunal deemed it just and proper to set-aside the impugned order, and remand the matter to the Assessing Officer for considering the matter afresh after affording an opportunity to the assessees to put forth their defense in all aspects, in terms of the order of the learned Single Judge which was to approach the Assessing Officer.
Aggrieved thereby, the assessees had preferred the instant appeal before the Hon’ble High Court.
The only submission urged before the High Court was that, since the Tribunal is final court of fact, it should had determined the factual dispute regarding effective service of notice under Section 148(1) of the Act; and it ought not to have relegated the matter to the Assessing Officer to examine the matter afresh.
The Hon’ble High Court opined that exercise of discretion by the Tribunal, to remand the matter to the Assessing Officer, could not be said to have caused prejudice to the assessees.
The Hon’ble High Court stated that Interference, in proceedings under Section 260-A of the Act, is warranted against the order of the Tribunal, only if the said order gives rise to a substantial question of law. However, the order under appeal, whereby the assessment order was set-aside and the Assessing Officer was directed to examine the matter afresh, leaving it open to the assessees to put forth their defense on all aspects, did not give rise to any such substantial question of law warranting an appeal, under Section 260-A of the Act, being entertained.
Accordingly, the Tribunal dismissed the appeal.
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