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Income Tax Appellate Tribunal, KOLKATA ‘A’ BENCH, KOLKATA
Before: Sri J. Sudhakar Reddy & Sri S.S. Viswanethra Ravi
Appearances by: Shri Miraj D. Shah, A/R, appeared on behalf of the assessee. Shri C.J. Singh, JCIT Sr. Dr., appearing on behalf of the Revenue. Date of concluding the hearing : April 24th, 2019 Date of pronouncing the order : May 10th , 2019 ORDER Per J. Sudhakar Reddy, AM :-
This appeal filed by the revenue is directed against the order of the Learned Commissioner of Income Tax (Appeals) - 16, Kolkata, (hereinafter the “ld.CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 28/02/2017, for the Assessment Year 2012-13.
The Assessing Officer in this case has disputed the decision of the ld. CIT(A) deleting the addition u/s 68 of the Act. The ld. CIT(A), in this case has called for a remand report under Rule 46A of the Income Tax Rules, 1962 (‘Rules’). At page 57 to 60 of the ld. CIT(A)’s order, the remand report as given by the Assessing Officer is extracted. In this remand report, the Assessing Officer has accepted the submissions of the assessee and had concluded that prima facie, documentary evidence enclosed in the paper book are found to be sufficient and in order. Based on such remand report, given by the Assessing Officer, the ld. CIT(A) has granted relief.
Assessment Year: 2012-13 M/s. Delight Merchants Pvt. Ltd 3. On these facts, the issue is as to whether the Assessing Officer can appeal before the Tribunal against this order of the ld. CIT(A) which is only based on his remand report. In other words, the Assessing Officer in this case disputes his own finding in the remand report 3.1. We find that the Hon’ble Madras High Court in the case of Smt. B. Jayalakshmi v. Assistant Commissioner of Income-tax, Salary Circle-II, Chennai [2018] 96 taxmann.com 486 (Madras), held as follows:- “19. Firstly, we have to take note of the fact that the issue canvassed before us, is a jurisdictional issue, which could be raised at any point of time. Secondly, the Tribunal was required to consider as to whether it had jurisdiction to entertain the appeal filed by the Revenue against the order passed by the CIT (A), which itself was based upon a remand report. As noticed above, the order passed by the Tribunal is a verbatim repetition of the assessment order, dated 29.03.2001. Thus, the Tribunal was required to consider the correctness of the order passed by the CIT (A) and if had been done in a proper prospective, the Tribunal would have noticed that the order allowing the assessee's appeal by the CIT (A) was based on the remand report. If this had been taken note of, the Tribunal would have to consider as to whether the appeal by the Revenue was maintainable before it. In the case of Jivatlal Purtapshi (supra), it was held that the department having agreed to delete the amount from the assessment and having considered the deletion before the Appellate Assistant Commissioner, cannot be aggrieved by that part of the order to enable it to file an appeal before the Tribunal and therefore, such an appeal, neither competent nor capable of being entertained by the Tribunal.
As already noticed, the Tribunal verbatim repeated the order passed by the Assessing Officer, dated 29.03.2001, and ignored the remand report, dated 25.11.2002 and the findings rendered by the CIT (A) based on such remand report. Thus, if such is the situation, the appeal itself would have been incompetent. Hence, this question, which touches upon the jurisdiction of the Tribunal, has not been considered by the Tribunal, we are inclined to review the judgment and remand the matter to the Tribunal for fresh consideration.
In the result, the Review Petitions are allowed and the judgment dated 30.09.2013, in Tax Case (Appeal) Nos.819 to 821 of 2010 is reviewed and recalled and the appeals stands disposed of, by remanding the matter to the Tribunal to decide the question of its jurisdiction to entertain the appeals filed by the Revenue against the orders of the CIT (A). In the event, the Tribunal decides the question in favour of the Revenue, it shall reconsider the other issues after opportunity to the Revenue and assessee.”
3.2. The Kolkata Bench of the Tribunal in the case of D.C.I.T., Central Circle-1 (4) , Kolkata Versus M/s Shraddha Tower Pvt. Ltd. 2018 (10) TMI 1405 - ITAT KOLKATA, held as follows:-
Assessment Year: 2012-13 M/s. Delight Merchants Pvt. Ltd “8. Heard rival contentions. On a careful consideration of the facts and circumstances of the case, on perusal of the documents on record and the orders of the authorities below we hold as follows :- The AO in his remand report has stated that he has verified all the documents and evidences furnished by the assessee in support of its claims. No adverse observations were made by the AO in the remand report. The claim of the assessee was accepted as correct. Under the circumstances, the ld. CIT(A) based on this remand report by the A.O, granted relief in this case. The ld. CIT(A) held as follows :- “I have considered the finding of the AO in the assessment order as well as in the remand report along with the written submission filed by the AR during the appellate proceedings, I have also considered comments of the Addl.CIT on the remand report and the written submission filed by the AR on such comments as well. I find that the AO himself has reported in the remand report that "inspector attached to his(this) charge was deployed for tracing some of the companies on test check basis. The inspector has stated in his report that on verification of some of the addresses, he could locate the name boards of some of the source companies displayed at the addresses. He also stated that he could see books of accounts of some of the respective sources companies on demand to the people present there, It is revealed to the inspector that in some cases, the source companies has taken table space agreements. In some cases they are occupying on rental basis. Submission of the assessee was considered, The report submitted by the inspector or along with extract of supporting documents was also considered and placed on record. No material (is) found in the assessment record which indicates that effort has been given to prove the existence and creditworthiness as submitted by the assessee during this remand proceedings. All the papers, copy of documents submitted during the remand stage in respect of loans and advances taken from companies are carefully checked. Further, the AR of the assessees contended that the Assessing Officer considered only the advance taken during a certain financial year but not considered the repayment made during the year. The contentions of the assessee in this regard appear to be correct. Each entry of advance taken and given was verified from the bank account: The balance of advance existed at the end of the financial year is sufficient to acquire assets existed in the right side of the balance sheet in each case and each assessment year". From the remand report of the AO, it is clear that the AO had accepted after due verification, the existence and creditworthiness of companies which have given advance to the assessee. The AO has also made investigation and given his findings that each entry of advance taken and given was verified from the bank account. From the report it is also clear that the balance of advance existed at the end of the financial year was sufficient to acquire assets existing in the right side of the balance sheet in each case and in each assessment year. Keeping in view the categorical findings given by the AO after due verification of papers and details filed and after proper investigation and report by the inspector attached to the AO in the remand proceedings, the issue involved in this case has been adequately discussed and elaborated by the AO. Accordingly assessee's appeal on ground no 3 is allowed.”
On these facts the issue is whether the Revenue could at all file an appeal before the Tribunal. The Hon’ble Madras High Court in the case of Smt.B. Jayalakshmi vs ACIT (supra held as follows :- “Section 246 of the Income-tax Act, 1961 - Commissioner (Appeals) - Appealable orders (Remand report) - Assessment years 1995-96 to 1997-98 - For relevant year, assessment order was passed under section 143(1) - Assessment Year: 2012-13 M/s. Delight Merchants Pvt. Ltd Subsequently, Assessing Officer reopened assessment under section 147 and made addition by treating agricultural income of assessee as non- agricultural - Commissioner (Appeals) called for remand report - Assessing Officer submitted remand report after enquiry and stated therein, that assessee was carrying on agricultural activity and, thus, she was earning agricultural income thereof - Commissioner (Appeals) on basis of said remand report, allowed claim of agricultural income of assessee - However, Tribunal disallowed said claim of assessee without taking into consideration that order allowing assessee's appeal by Commissioner (Appeals) was based upon remand report - Whether revenue was not entitled to file an appeal before Tribunal against order of Commissioner (Appeals), which was based upon a remand report - Held, yes [Paras 19, 23 and 24] [In favour of assessee/Matter remanded] 10. The ‘E ‘Bench of Delhi ITAT in the case of ACIT vs R.P.G.Credit & capital Ltd. (supra) had taken a similar view.
Be as it may, the ld. DR could not bring out any material to controvert the factual findings given in the remand report of the AO. Thus on this ground also the appeal of the revenue fails”
Applying the proposition of law laid down in these case laws to the facts of the case, we hold that the Assessing Officer cannot file an appeal against his own factual finding given by him in the remand report. Hence we dismiss this appeal of the revenue as not maintainable.