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Income Tax Appellate Tribunal, DELHI BENCH
Before: SHRI BHAVNSH SAINI
ORDER
Per Bhavnesh Saini, Judicial Member :
This appeal by assessee has been directed against the order of Ld. CIT(A)-1, Noida dated 27.03.2018 for assessment year 2010-11.
Briefly facts of the case are that in this case, assessment was originally completed on 14th February, 2013 on total income of Rs. 18,18,600/- in the status of AOP , as against NIL returned income. The main addition of Rs. 18,18,600/-
pertains to bank interest income and interest on income taxed refund, tax considering the verdict of Hon’ble Supreme Court in the case of Bangalore Club vs. CIT dated 14th January, 2013. The Ld. CIT(A) dismissed the appeal of assessee. The assessee preferred appeal before ITAT, New Delhi. The assessee submitted that issue has been decided in favour of the assessee by ITAT vide order dated 31st August, 2009 in for assessment year 2004-05 in assessee’s own case. The AO noted that the Tribunal considering its order for assessment year 2004-05 remitted back the issue of expenses of Rs. 28,70,532/- to the file of AO for fresh consideration as per law. The order of the Tribunal dated 13.10.2016 in para 7 and 8 is reproduced by the AO in the assessment order, the same reads as under :- “ 7. With regard to ground no. 3 is concerned which is relating to not considering and thereby allowing the expenses of Rs. 28,70,532/- by the lower authorities, which were in the nature of recurring, office and administrative expenses incurred in the course of earning income. I find that both the revenue authorities have not discussed this issue in their respective orders, therefore, the ground no. 3 is remitted back to the file of the AO for fresh consideration, as per law, after giving adequate opportunity of being heard to the assessee. 8. In the result, the appeal of the assessee is allowed for statistical purposes.”
The AO in view of the order of the Tribunal re-fixed the matter for fresh hearing. The AO referred to the order of the Tribunal dated 13th October, 2016 and noted that the Tribunal has remitted back the matter to the file of AO for fresh consideration. The assessee submitted before ITAT for the year under consideration that ITAT has allowed the appeal of assessee vide order dated 31st August, 2009 passed in for assessment year 2004-05 in assessee’s own case. The AO referred to the facts for assessment year 2004-05 and noted that the department has filed appeal before Hon’ble Allahabad High Court and the departmental appeal have been dismissed on the ground of low monetary limit for filing appeal before the High Court. The AO further noted that subsequent to the decision of the ITAT in the case of assessee for assessment year 2004-05 (supra), the Supreme Court in the case of Banglore Club vs. CIT dated 14th January, 2013 (supra) held that “the amount of interest earned by the assessed from the aforenoted four banks will not fall within the ambit of Principle of Mutuality and will therefore be exigible to Income Tax in the hands of the assessee club”. The AO accordingly repeated addition of Rs. 18,18,599/- on account of bank interest and other income. The total income of assessee was computed at Rs. 18,18,600/-.
The assessee challenged the addition before Ld. CIT(A). All the submissions of the assessee are noted in the appellate order including that the AO has disobeyed
ITAT, however, the contention of the assessee was not accepted. The Ld. CIT(A) also issued a notice of enhancement of income to Rs. 32,55,494/- and after hearing the assessee enhance the addition from 18,18,599/- to Rs. 32,55,494/-.
Accordingly appeal of the assessee were dismissed by making the above enhancement.
The assessee in the present appeal has challenged the addition of Rs. 18,18,599/- made by AO on account of bank interest and other income as well as challenged the order of Ld. CIT(A) in enhancing the income from 18,18,599 to Rs. 32,55,494/-.
Ld. Counsel for the assessee submitted that ITAT, Delhi Bench in the case of the same assessee for assessment year under appeal i.e. 2010-11 earlier decided the appeal of assessee vide order dated 13th October, 2016, copy of the same is placed on record and provided to Ld. DR. He has submitted that in the appeal the assessee raised the issue of addition of Rs. 18,18,599/- on ground no. 1 and 2 and ground no. 3 assessee challenged the allowance of expenses of Rs. 28,70,532/-. He has submitted that the Tribunal following its earlier order assessment year 2004-05 allowed ground no. 1 and 2 of the appeal of assessee meaning thereby the addition of Rs. 18,18,599/- have been deleted. He has further submitted that on ground no. 3 regarding allowing of the expenses of Rs. 28,70,532/- , the Tribunal remitted the matter back to the file of AO for fresh consideration. He has submitted that once ITAT vide its earlier order dated 13th October, 2016, there was no justification to make the addition again in the appeal effect order and further the CIT(A) should not have enhanced the same addition. On the other hand, Ld. DR merely relied upon orders of the authorities below.
I have considered rival submission and perused the material on record. It is not in dispute that earlier AO passed the assessment order on 14th February, 2013 and made addition of Rs. 18,18,600/- on account of bank interest income and other interest. The assessee ultimately preferred appeal before the Tribunal in for A.Y. 2010-11 in appeal which is decided by the Tribunal vide order dated 13th October, 2016. The Tribunal following its earlier decision in the case of same assessee for assessment year 2004-05 deleted the addition of Rs. 18,18,599/- (18,18,600/-) and ground no. 1 and 2 have been allowed. The AO reproduced order of the Tribunal dated 13th October, 2016 in para 7 and 8 in the assessment order which is also reproduced above. Ground no. 3 was with regard to expenses of Rs. 28,70,532/-. It appears that AO misunderstood the findings of the Tribunal in Para 7 and 8 and had taken that the issue of addition of Rs. 18,18,599/- is also restored to the file of AO, despite of the fact this addition has already been deleted by the Tribunal. Similarly, the Ld. CIT(A) misunderstood the order of the ITAT and without any justification enhanced the same addition. It is well settled law that when particular matter is remanded to assessing officer on limited issue, the jurisdiction
AO is confined to such issue only. In support of above proposition of law, I rely upon decision of Allahabad High Court in the case of S.P. Cochar 145 ITR 255, decision of Allahabad High Court in the case of Sri Vidhyavasni Gupta 186 ITR 253 and decision of Calcutta High Court in the case of Kathiar Jute Mills 120 ITR 86. Since, in the present case the Tribunal restored the issue of expenses of Rs. 28,70,532/- only to the AO vide order dated 13th October, 2016, the assessing officer should have confined to this issue only in set aside proceeding u/s 143(3) / 254 of IT Act in the impugned assessment order dated 06.11.2017. I may further note that the assessing officer in set aside proceeding despite re-producing the relevant para of the order of the Tribunal in the assessment order did not decide the issue of expenses of Rs. 28,70,532/- and thus did not follow order of the Tribunal dated 13th October, 2016. I may also note that the AO further disobeyed the order of the Tribunal dated 13th October, 2016 by repeating the addition of Rs. 18,18,599/- on account of bank interest and others which addition has already been deleted by the Tribunal vide order dated 13th October, 2016. Thus, the AO and the Ld. CIT(A) have exceeded their jurisdiction in making addition and enhancing the same addition on account of bank interest etc. The orders of the authorities below are illegal, void ab initio. The AO and the CIT(A) have without any justification fail to follow the order of the Tribunal and as such liable for proceedings under contempt of court’s Act. In view
I set aside the orders of the authorities below and delete the entire addition made by the AO and enhanced by the Ld. CIT(A).
In the result, appeal of the assessee is allowed.
(Order Pronounced in the Open Court.)