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Facts
The assessee's appeal is directed against an order from the National Faceless Appeal Centre (NFAC) which arose from an assessment order under Section 143(3). The assessee claimed the issue was already adjudicated in their favour for a prior assessment year, but the CIT(A) found the claim factually incorrect. The assessee had also not made any representation before the CIT(A) and failed to provide evidence, leading to an ex-parte order.
Held
The Tribunal held that the assessee's claim of the issue being previously adjudicated was based on a misunderstanding of the prior order, which dealt with revisional jurisdiction under Section 263 and not the merits of agricultural income. The Tribunal also noted the lack of representation before the CIT(A) and remitted the matter back for fresh adjudication.
Key Issues
Whether the prior ITAT order on revisional jurisdiction under Section 263 for AY 2017-18 can be applied to the present assessment year's merits. Whether the lack of representation before the CIT(A) warrants a remand.
Sections Cited
143(3), 263, 46A
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Income Tax Appellate Tribunal, “F” BENCH, DELHI
Before: MS. MADHUMITA ROY & SHRI KHETTRA MOHAN ROY
The instant appeal preferred by the assessee is directed against the order dated 17.11.2023 passed by the Ld. National Faceless Appeal Centre (NFAC), Delhi, arising out of the Assessment Order dated 22.02.2021, passed by National E-Assessment Centre, Delhi, under Section 143(3) of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for the Assessment Year 2018-19.
“1. That impugned order of CIT(a) is illegal being contrary to the legal position declared by this Hon’ble Tribunal in Appellant own case for A.Y. 2017-18.
2. That the impugned order is illegal in as much as the ld. AO himself has decided the same issue in favour of the Assessee while passing the assessment order for A.Y. 2017-18.
That even otherwise, on facts and circumstances of the case, the impugned order of the CIT9A) is bad in law being contrary to the principles of natural justice.
The assessee has submitted written submission which is reproduced as under:
“May it please Your Honors:-
In the grounds of appeal filed by the assessee as well as in the covering letter of the paper book/ submission filed by the assessee during the course of these appellate proceedings, it has been claimed that the issue stands adjudicated on merits in the assessee's own case for AY 2017-18 accepting the genuineness of the agricultural income. On the basis of this claim, the assessee has requested that the addition made by the AO in the current relevant year i.e. AY 2018-19 be deleted by the Hon'ble ITAT following its own order for the earlier year.
2. In this regard, it is submitted that the claim made by the assessee is factually incorrect and untenable as well as legally unsustainable since it arises from the wrong proposition as to why the order u/s 263 of the CIT has been quashed by the Hon'ble ITAT and as to what specifically and pointedly have been the findings of the Bench in the referred order.
3. At the outset, it may be mentioned that what the ITAT has quashed in the referred order for AY 2017-18 is the revisional order of the CIT u/s 263 and not some assessment order. This is the limited mandate of the order since the issue in appeal (Grounds no. 1, 2 and 3 of the impugned appeal as elaborated in para 2 of the relevant order of the ITAT) is only the exercise of revisional jurisdiction by Pr. CIT u/s 263. Since that was the only ground before the ITAT and that is what has been examined and answered by the ITAT, it is factually incorrect as well as completely misleading to claim herein now before this Bench that the genuineness of agricultural income has been accepted by the Bench. By making this claim, what the asessee is essentially proposing is that the ITAT has gone beyond the grounds before it and has decided on a matter which was never before it in the first place. Such a proposition cannot be accepted as it would violative of settled jurisprudence as to the rightful exercise of jurisdiction.
4. As will be seen from the following observations of the ITAT (drawn from the relevant paras of the order Itself, the findings are in respect of the appropriate exercise or otherwise of the revisionary jurisdiction of the Pr. CIT, and are not on the merits of the various aspects of the case.
(i) While doing so, ITAT has observed at Para 11 of the order that the Ld. PCIT has taken a view as if it is a complete scrutiny case and the AO has failed to conduct some more enquiries in the case.
(ii) The order further, inter alia, says in Para 12 that while acting as an adjudicator, if the AO takes one of the plausible views then such an order cannot be termed by the Pr.CIT as erroneous and prejudicial to the interest of revenue u/s 263.
(iii) Further, in para 16, the Hon'ble Bench observed that the Ld. PCIT has directed the AO to conduct enquiry and that under the provisions of section 263, it is incumbent upon Pr. CIT to specifically point out as to what enquiries the AO has not conducted or conducted in a perverse manner that can lead to a conclusion that the order has been erroneous and prejudicial to the interest of revenue. The Ld. PCIT cannot direct the AO to conduct enquiries without specifying as to how that led to prejudice to revenue.
(iv) In the concluding para 17 of the ITAT order, reliance has been placed on two case laws-
(a) Abhishek Kumar vs. PCIT with similar facts -- it may be mentioned here that the said case is also a matter of observation on rightful exercise of revisional jurisdictional of Pr. CIT in that specific case and is not a detailed speaking finding on the merits of the case.
(b) ITO vs DG Housing Projects 343 ITR 329 wherein it was held that the commissioner cannot remit the matter for a fresh decision to the Assessing Officer to conduct further enquiries without a finding that the order of Assessing Officer is erroneous. Such finding that the order is erroneous is a condition precedent for exercise of jurisdiction u/s 263 -- As can be seen clearly from this case also, the matter in consideration is only whether revisional jurisdiction could have been exercised by Pr. CIT in the specific matter in the given facts of the case.
Thus, it can be seen that the observations of ITAT, whether in the case for AY 2017-18 in its own case, or in the case of related party Abhishek Kumar, is on only the specific and limited issue whether the revisional jurisdiction has been exercised by Pr. CIT correctly or not.
The present case under appeal is that of a regular assessment order which has been passed by the AO where in the first appeal, the assessee has made no compliance before the CIT(A) and also claimed that the AO did not grant proper opportunity to explain else the assessee would have provided evidences to support its claim. The Assessee further claimed to CIT(A) that it would place additional evidences under Rule 46A but has not submitted any details for two years because of which the CIT(A) was constrained to pass an ex- parte order.
In light of these facts and non-applicability of the order of Hon'ble ITAT for AY 2017-18 (being a finding on s.263), the present case needs to be examined based on facts and evidences so that a finding on merits can be arrived at by appropriate Authorities.”
3. At the outset, we find that there was no representation before the Ld. CIT(A). We are not inclined to consider that the matter is covered because the order is referred substantially different from the issue in hand as it relates to appeal under Section 263 of the Act. We fail to understand why the Ld. AR who is now vociferously submitting that the matter is covered one having once failed to raise same voice before the ld. CIT(A). Ergo, the submission of the Ld. AR is jettisoned in limine. At this juncture in all fitness the matter is remitted back to Ld. CIT(A) for fresh adjudication in the interest of justice and fair play.
In the result, the appeal of the assessee is allowed for statistical purposes.