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Facts
The assessee did not file a return for AY 2011-12, leading to assessment under section 144 read with section 147. After appeals and modifications, the income was assessed at Rs. 5,83,770/-. Subsequently, the CIT(A) allowed grounds related to salary income, and the AO revised the income to Rs. 54,000/-.
Held
The Tribunal noted that an order under section 154 had been passed, revising the income to Rs. 54,000/- and granting substantial relief. Consequently, the grounds related to quantum addition were dismissed as infructuous, while grounds regarding the validity of the impugned order were kept open but considered academic.
Key Issues
Whether the CIT(A) had the power to direct action under Section 154 after a certain date, and whether the reassessment proceedings under Section 147 were valid when there might have been a difference of opinion on the issue.
Sections Cited
154, 147, 144, 148
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW
Before: SHRI KUL BHARAT & SHRI NIKHIL CHOUDHARY
PER KUL BHARAT, VICE PRESIDENT.:
This appeal, by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals), National Faceless Appeal Centre (NFAC) dated 28.02.2024 pertaining to the assessment year 2017-18. The assessee has raised the following grounds of appeal are as under: -
“i. The CIT(A) erred on law and fact of the case directing AO to take action 154. The CIT(A) has no power with effect from 01.06.2001 to set-aside or issue any direction to AO to take action u/s 154 of the Act before 31.03.2023. This direction given by CIT(A) with regard to issue notice u/s 154 is liable to be quashed. ii. The CIT(A) has erred on law and facts directing AO to take action u/s 154 without deciding my grounds of appeal that no enhancement can be made without issue of notice u/s 148. This ground was a part of my first ground before CIT(A). iii. There was no mistake apparent from record in passing original order u/s 147/144 dated 28.12.2018 because all points recorded in reason of u/s 147 was considered by AO. The reasons were approved by CIT, Gorakhpur. This is debatable issue whether action u/s 148 will lies or 154. No u/s 154 of the Act lies where there is difference of opinion as held by Supreme Court decision on 13.09.2012 (copy of order is being enclosed)
Page 2 of 4 in the case of Dinosaur Steels Ltd. vs. Joint Commissioner of Income Tax (2012) 254 CTR (SC)640: (2012) 80 DTR (SC) 217: (2012) 349 ITR 360 (SC). As above decision Supreme Court held that if there is no patent mistake in assessment order, 154 is not applicable. iv. Any other ground assessee may raise, alter, delete during course of appellate proceeding.” 2. The assessee has also taken an additional ground that reads as under: -
“1. That the Ld. Commissioner of Income (Appeals), Gorakhpur has not accepted my plea that order was bad in law as notice u/s 148 of I. T. Act was not served on assessee. 2. That Income Tax Officer-1(1), Gorakhpur issued notice u/s 148 without jurisdiction. 3. That Pr. Commissioner of Income Tax, Gorakhpur has given approval in mind.” mechanical manner without applying his own
The facts giving rise to the present appeal are that in this case the Assessing Officer noted that the assessee did not file any return of income for A.Y. 2011-12 and thereafter the assessment was completed u/s 144 read with section 147 of the Income Tax Act,1961 (“Act”, for short). It is further recorded by the Assessing Officer that aggrieved by the assessment passed u/s 144 read with section 147 of the Act. The assessee preferred appeal before the Ld. CIT(A) and the appeal of the assessee was partly allowed. Thereafter, the assessing authority passed an appeal giving effect thereby the Assessing Officer computed the income at Rs.5,83,770/-. Aggrieved against this, the assessee again preferred appeal before the Ld. CIT(A) who allowed the grounds of appeal of the assessee against the addition made in respect of salary income. The Assessing Officer passed order vide order dated 23.12.2022, assessing the income at Rs.54,000/-. However, in the present appeal the assessee has challenged the order dated 30.11.2022 passed by the Ld. CIT(A) in Appeal No. NFAC/2010-11/10160918.
Page 3 of 4 4. At the time of hearing, no one attended the proceedings on behalf of the assessee. However, a letter dated 06.11.2023 is on record, requesting that the matter may be decided on the basis of the submissions of the assessee.
Apropos to the grounds of appeal, Ld. Departmental Representative (DR) has placed on record an order dated 23.12.2022 which is subsequent to the impugned order whereby the assessing authority has given appeal effect of the order thereby the income of the assessee is now assessed at Rs.54,000/- allowing substantial relief to the assessee. Thus, he prayed that the appeal of the assessee may be dismissed.
We have heard the Ld. DR and perused the material available on records. There is no dispute that in this case order u/s 154 of the Act has already been passed by giving effect of impugned order vide order dated 23.12.2022 whereby the income of the assessee is assessed at Rs.54,000/-. The assessee has raised various technical grounds in respect of the order of the Ld. CIT(A) vide his decision directed the assessing authority to take remedial action under section 154 of the Act and had restored the issue to the file of the assessing authority. The assessing authority vide order dated 23.12.2022 has revised the computation of income by assessing the income at Rs.54,000/- granting the substantial relief of Rs.7,70,000/-. Thereby the primary grievance of the assessee about salary income has been resolved. We, therefore, dismiss the grounds against quantum addition being infructuous and keep the grounds against validity of the impugned order opened. As same has now become academic interest only. We are, therefore, not expressing our opinion on the same.
Order pronounced in the open Court on 28/03/2025.