G.MURALIDHAR HUF vs. THE ASSISTANT COMMISSIONER O

TCA.No.4 of 2020 In the High Court of Judicature at Madras Dated : 14.10.2020 Coram : The Honourable Mr.Justice T.S.SIVAGNANAM and The Honourable Mrs.Justice V.BHAVANI SUBBAROYAN Tax Case Appeal No.4 of 2020 G.Muralidhar (HUF) Pan: AACHG9948K ...Appellant -vs- The Assistant Commissioner of Income Tax, Circle XIII, Chennai – 600 034. ...Respondent APPEAL under Section 260A of the Income Tax Act, 1961 against the order dated 29.01.2016 in ITA.No.1128/Mds/2015 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench for the assessment year 2002-03. For Appellant : Mr.R.Sivaraman For Respondent : M/s.V.Pushpa Junior Standing Counsel 1/8 http://www.judis.nic.in TCA.No.4 of 2020 Judgment was delivered by

T.S.Sivagnanam,J

This appeal, filed by the assessee under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) is directed against the order dated 29.01.2016 in ITA.No.1128/Mds/2015 on the file of the Income Tax Appellate Tribunal, Madras 'B' Bench for the assessment year 2002-03. 2.The following substantial questions of law have been raised for consideration: “1.Whether, on the facts and circumstances of the case, the Appellate Tribunal is justified in dismissing the appeal as 'not maintainable under the law'? 2.Whether, on the facts and circumstances of the case, the status of the Appellant-individual can be changed into Appellant-HUF under Section 154 of the Act?” 3.We have heard Mr.R.Sivaraman, learned counsel appearing for the appellant and M/s.V.Pushpa, learned Junior Standing Counsel appearing for the respondent. 2/8 http://www.judis.nic.in TCA.No.4 of 2020 4.The Tribunal by the impugned order dismissed the appeal filed by the assessee challenging the order dated 22.01.2015 passed by the Commissioner of Income Tax (Appeals)-7 [hereinafter referred to “the CIT(A)], confirming the order passed by the Assessing Officer under Section 154 of the Act dated 26.07.2010. The reason for dismissing the appeal as not maintainable is owing to the fact that the Income Tax Appellate Tribunal [ITAT] has passed an earlier order dated 09.09.2011 in I.T.A.Nos.1955/Mds/2008 and 1987/Mds/2008 , by which the Tribunal set aside order passed by the Commissioner of Income Tax (Appeals)-XII, Chennai dated 11.06.2008 and remanded the matter to the Assessing Officer with the following observation and finding: “11.At the time of hearing, the assessee's counsel also pleaded that in fact the status of the assessee has been taken as individual at the time of assessment, whereas as per rectification order passed by the Assessing Officer, the same has been changed to HUF vide order dated 26.07.2010. Therefore, the assessment framed in the status of individual should be quashed. whereas, the ld. DR submitted that no doubt, the status of the assessee has been changed from individual to HUF, 3/8 http://www.judis.nic.in TCA.No.4 of 2020 yet, there is no adjudication in this regard by the ld. CIT(A). Therefore, the plea of the assessee that the assessment framed in the status of individual should be quashed is not maintainable and at the most, the Tribunal can remit the matter back to the file of the Assessing Officer for reconsideration of the issue as 154 order is passed recently. 12.We have heard both the sides on this point and find that as per order of the Assessing Officer passed under Section 154 on 26.07.2010, the status of the assessee has been converted to HUF in place of individual, but this issue was not raised before the ld. CIT(A) and in view of the subsequent order passed by the Assessing Officer, in our considered view, the matter should go back to the Assessing Officer for reconsideration of the status. As such, the orders of authorities below in this regard is set aside and restored back the file of the Assessing Officer for reconsideration afresh the issue after giving due opportunity to the assessee. We hold and direct accordingly.” 5.The Tribunal observed that because of the earlier order, the appeal filed by the assessee challenging the order under Section 154 of the Act 4/8 http://www.judis.nic.in TCA.No.4 of 2020 dated 26.07.2010 as confirmed by the CIT(A) by order dated 22.01.2015 is not maintainable. In our considered view, the observations made by the Tribunal is not wholly correct because the Assessing Officer after passing the assessment order dated 31.12.2007 and after the same was confirmed by the CIT(A) on 11.06.2008, issued notice dated 01.07.2010 under Section 154 of the Act, subsequently passed a rectification order dated 26.07.2010 and at the relevant time, the appeal filed by the assessee before the Tribunal against the order of the CIT(A) dated 11.06.2008 was pending. Since the assessee was visited with an order under Section 154 of the Act, necessarily the assessee had to take the matter on appeal and accordingly went before the CIT(A), who dismissed the assessee's appeal on 22.01.2015. In fact, the CIT(A) need not have dismissed the assessee's appeal, but could have taken note of the order passed by the ITAT dated 09.09.2011 and left the matter to the Assessing Officer to decide the issue as per the directions of the ITAT. Therefore, the assessee having suffered an order at the hands of the CIT(A) dated 22.01.2015 had to necessarily file an appeal to the Tribunal. This appeal was dismissed by the Tribunal as not maintainable. The Tribunal has committed an error in coming to the conclusion that the appeal is not 5/8 http://www.judis.nic.in TCA.No.4 of 2020 maintainable when the fact remains the appeal is maintainable and necessarily the Tribunal had to clarify that the Assessing Officer should take a decision in the matter as per the remand order dated 09.09.2011 without reference to the order under Section 154 dated 26.07.2010 and the order of the CIT(A) dated 22.01.2015. If this observation had been done by the Tribunal, the present appeal itself could have been avoided. Therefore, we are inclined to interfere with the order passed by the Tribunal. 6.Accordingly, the appeal is allowed, the impugned order is set aside and the substantial questions of law are decided in favour of the assessee and the matter is remanded to the Assessing Officer to comply with the direction issued by the Tribunal in its order dated 09.09.2011 after due opportunity to the assessee. No costs. 7.M/s.V.Pushpa, learned Junior Standing Counsel appearing for the respondent/revenue submitted that this order should not be misunderstood by the Assessing Officer as if this Court has taken a decision on the status of the assessee, i.e. either an individual or a HUF. The revenue need not 6/8 http://www.judis.nic.in TCA.No.4 of 2020 have any apprehension in this regard because the order of remand passed by the Tribunal is very clear and the Assessing Officer has to decide afresh on the status of the assessee whether it is an individual or a HUF. (T.S.S., J.) (V.B.S, J.) 14.10.2020 Index: Yes/No Internet: Yes Speaking Order/Non-Speaking Order cse To The Income Tax Appellate Tribunal, Madras 'B' Bench 7/8 http://www.judis.nic.in TCA.No.4 of 2020 T.S.SIVAGNANAM, J. AND V.BHAVANI SUBBAROYAN, J. cse TCA.No.4 of 2020 14.10.2020 8/8 http://www.judis.nic.in