JANARDAN MISHRA,GUWAHATI vs INCOME TAX OFFICER, WARD-1(3), GUWAHATI

Income Tax Appellate Tribunal, GAUHATI BENCH “E” COURT AT KOLKATA

Before: Shri S.S.Godara & Dr. A.L.Saini

आदेश /O R D E R PER BENCH:- These two assessee’s appeals for assessment year(s) 1992-93 & 1993- 94 arise against the Commissioner of Income Tax (Appeals)-1, Guwahati’s separate order all dated 29.06.2018 passed in case No.601079351249117/18 & 601100661240117/17 u/s 254 of the Income Tax Act, 1961; in short ‘the Act’.

For the reason stated in assessee’s condonation petition(s) dated 24.09.2018 explaining two days’ delay in filing and on account of no objection from the department side. we condone the impugned delay in filing as neither intentional nor deliberate but on account of circumstances beyond his control.

ITA No.260-261/Kol/2018 A.Ys. 92-93 & 93-94 Janardan Misra Vs. ITO Wd-1(3), Guwa Page 2 These two above cases ITA 260 and 261/Gau/2018 are taken up for adjudication on merits.

It emerges at the outset that this is third round of litigation between the parties before the tribunal. We notice that the tribunal’s first order dated 12.03.2008 had directed the Assessing Officer to re-examine the matter in view of the special court’s findings against the taxpayer. We observe that the lower authorities once again reiterated the earlier action assessing him qua the alleged undisclosed income. The assessee then preferred ITA No.29- 30/Gau/2011 before tribunal. Later co-ordinate bench’s order dated 15.05.2015 once again restored the issues back to the Assessing Officer as under:- “5. Learned counsel for the assessee has submitted a short note on the question as to whether the Assessing Officer can be directed to pass an order only after the Sub- judge disposes of thee assessee’s challenge to the charge sheet filed by CBI. This note, inter alia, states as follows:- 1. That it is submitted that under the provisions of section 254 of the Income Tax Act, 1961, the Appellate Tribunal, after giving both the parties to the appeal an opportunity of being heard, has the powers to pass such orders thereon as it thinks fit. 2. 2. That it is an admitted fact in respect to the instant case that the charge- sheets, filed by the Central Bureau of Investigation, under the Indian Penal Code and Prevention of Corruption Act, pending adjudication before the Court of Special Judge, Assam in state of Assam vs. Prem Saran & Others” (57/04) and “State of Assam vs. Jiauddin Ahmed & Others” (56/4), after the reasons for re-opening of the assessments, which have travelled the appeal route and are presently under appeal before the Hon'ble Tribunal in the above mentioned appeals. It is also submitted that the Hon'ble Tribunal has the powers to pass such orders thereon as it thinks fit in accordance with the provisions of the aforesaid Act.

That in respect of the specific query of the Hon'ble Bench, as regards the implications of the expression ‘direction’ contained in an order u/s. 254 of the said Act, as mentioned in section 153(3)(ii) thereof, the appellant seeks to refer to the pronouncement of the Hon'ble Supreme Court in Rajinder Nath vs. Commissioner of Income Tax (1979) 120 ITR in this respect, more particularly the following paragraph from the judgment at pages 18-19 of the Reports: ‘The expression “finding” and “direction” are limited in meaning. A finding given in an appeal, revision or reference arising out of an assessment must be a finding necessary for the disposal of the

ITA No.260-261/Kol/2018 A.Ys. 92-93 & 93-94 Janardan Misra Vs. ITO Wd-1(3), Guwa Page 3 particular case, that is to say, in respect of the particular as and in relation to the particular assessment year. To be a necessary finding, it must be directly involved in the disposal of the case. It is possible in certain cases that in order to render a finding in respect of A, a finding in respect of B may be called for. For instance, where the facts show that the income can belong either to A or B and no one else, a finding that it belongs to B or does not being to B would be determinative of the issue whether it can be taxed as A’s income. A finding respecting B is intimately involved as a step in the process of reaching the ultimate finding respecting A. If, however, the finding as to A’s liability can be directly arrived at without necessitating a finding in respect of B. Then a finding made in respect of B is an incidental finding only. it is not a finding necessary for the disposal of the as pertaining to a. The same principles seem to apply when the question is whether the income under enquiry is taxable in the assessment year under consideration or any other assessment year. As regards the expression “direction” in s. 153(3)(ii) of the Act, it is now well settled that it must be an express direction necessary for the disposal of the case before the authority or court. It must also be a direction which the authority or Court is empowered to give while deciding the case before it. The expressions “finding” and “direction” in s. 153(3)(ii) of the Act must be accordingly confined. Sec. 153(3)(ii) is not a provision enlarging the jurisdiction of the authority or Court. It is a provision which merely raises the bar of limitation for making an assessment order under s. 143 or s. 144 or s. 147: ITO vs. Murlidhar Bhagwan Das (1964) 52 ITR 335 (SC); TC 41 R.2168 and N.K.T. Sivalingam Chettiar vs. CIT (1967) 66 ITR 586 (SC); TC 51R.2042. The question formulated by the Tribunal raises the point whether the AAC could convert the provisions of s. 147(1) into those of s. 153(3))(ii) of the Act. In view of s. 153(3)(ii) dealing with limitation merely, it is not easy to appreciate the relevance or validity of the point.” (Emphasis ours) 4. That in view of the above, it is submitted that an order passed by the Hon'ble Tribunal, in accordance with section 254 of the Act, may contain an expression direction, necessary for the disposal of the case before it.” 6. It would thus appear that according to the learned counsel of the assessee, once a direction is given to the Assessing Officer to pass an order after the Sub-judge adjudicates on the correctness of charge sheet against the assessee, limitation period as set out in completing assessment proceedings as a result of remand by the Tribunal, will not come into play. That was also our initial impression about the scope of proceedings in remand before the Assessing Officer. However, in terms of section 153(3) of the Act, the time limitation for completion of assessment, re-assessments or re-computation do not come into play, subject to the provisions inter alia of Section 153(2A), where, inter alia, “the assessment, reassessment or re-computation is made on the assessee or any person in consequence of or to give effect to any finding or direction contained in an order under section 250, 254, 260, 262, 263 or 264 or in an order of any court in a proceeding otherwise than by way of appeal or reference under the Income Tax Act.” However, it is this provision in sub-section 153(2A), which remains unaffected by the provisions of Section 153(3) as well, which governs the time limit within which the remanded proceedings can be completed. In view of these discussions, there is indeed merit in the suggestion of the Learned Departmental Representative and we must direct the Assessing Officer to bear in mind the time limits set out under the law, on completing the assessments remitted to the file of the Assessing Officer. The Assessing Officer should not keep

ITA No.260-261/Kol/2018 A.Ys. 92-93 & 93-94 Janardan Misra Vs. ITO Wd-1(3), Guwa Page 4 the fresh assessment pending forever to await the decision of the Sub Judge, and he must pass the fresh assessment order, well within the time limit, to protect the legitimate interests of the revenue. With these directions, the matter stands restored to the file of the Assessing Officer.” 4. Suffice to say, the impugned addition(s) have been once again made during the second consequential assessment framed on 20.12.2016 as well. The CIT(A) has affirmed the Assessing Officer’s action as under: “Decision I have gone through the above submissions of the Appellant and have considered the facts and evidences on record. I find that the Hon'ble Tribunal remitted the matter to the file of Assessing Officer in view of a large number of decisions of the Co-ordinate benches where similarly placed mattes have been remitted to the file of Assessing Officer for fresh adjudication after validity of charge sheet is judicially examined by the Sub-judge. The Hon'ble Tribunal had further directed that the Assessing Officer should not keep the fresh assessment order, well within the time limit, to protect the legitimate interest of revenue. In view of the fact that appellant could not submit the judgments within the time limit, the AO had no option but to pass the fresh assessment by determining the total income as earlier passed in his case u/s.143(3) on 28/03/2003. In view of the appellant’s submission that the Hon'ble Court has not yet passed any orders in the said cases and the hearings are still continuing, I too have no other option but to sustain the impugned assessment order. The request of the appellant to keep the appeal pending in the interest of justice cannot be entertained by me in view of Government Policies and norms to be followed in respect of disposal of appeals. Accordingly, I sustain the assessment order passed u/s. 143(3) read with section 254.” 5. The CIT(A)’s above extracted detailed discussion makes it clear that he has attributed assessee’s failure in not having submitted the “judgments” within time limit. We observe that there was no such necessity on the assessee to submit any such judgment as per the tribunal’s above extracted remand directions that the Assessing Officer would decide the matter to protect legitimate interest of the Revenue. Learned departmental representative fails to dispute at this stage that the CIT(A) has nowhere discussed factual matrix of the issues as required u/s 250(6) of the Act including both the framing of points of determination and detailed discussion thereupon. We thus are of the view that larger interest of justice would be met

ITA No.260-261/Kol/2018 A.Ys. 92-93 & 93-94 Janardan Misra Vs. ITO Wd-1(3), Guwa Page 5 in case assessee’s both appeal(s) are restored back to the CIT(A) for afresh adjudication on merits. We order accordingly. All remaining directions of the earlier co-ordinate bench shall continue to operate in the same terms. 6. These two assessee’s appeals ITA No.260 & 261/Gau/2018 are allowed for statistical purposes in above terms. Order pronounced in the open court 13/12/2019 Sd/- Sd/- (A.L.Saini) (S.S.Godara) (Accountant Member) (Judicial Member) Kolkata, *Dkp "दनांकः- 13/12/2019 कोलकाता/। आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. आवेदक/Assessee-Janardan Misra House No.1 Sewali Path, Hatigaon, Guwahati-006 2. राज�व/Revenue-ITO ward-1(3), Aayakar Bhawa,Christian Basti, G.S. Road, Guwahati-05 3. संबं-धत आयकर आयु/त / Concerned CIT Guahati 4. आयकर आयु/त- अपील / CIT (A) Guahati 5. 2वभागीय �5त5न-ध, आयकर अपील�य अ-धकरण, / DR, ITAT, Guahati 6. गाड9 फाइल / Guard file. By order/आदेश से, /True Copy/ Sr. Private Secretary, Head of Office/DDO आयकर अपील�य अ-धकरण, गूवाहाठ� ।

JANARDAN MISHRA,GUWAHATI vs. INCOME TAX OFFICER, WARD-1(3), GUWAHATI