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Income Tax Appellate Tribunal, “C” BENCH : BANGALORE
Before: SHRI SUNIL KUMAR YADAV & SHRI S. JAYARAMAN
Per Sunil Kumar Yadav, Judicial Member
This appeal is preferred by the assessee against the order of CIT(Appeals) inter alia on the following grounds:-
“1. The orders of the authorities below in so far as they are against the appellant are opposed to law, equity, weight of evidence, probabilities, facts and circumstances of the case. 2. The impugned order passed by the learned CIT[A] is opposed to law and facts of the appellant's case in as much as the learned CIT[A] has directed the learned A.O. to rectify the assessment order that was challenged in appeal and thereafter, he has dismissed the appeal on the ground that the order passed u/s. 154 of the Act has been challenged by the appellant separately under the facts and in the circumstances of the appellant's case.
3. Without prejudice to the above, the learned CIT[A] after observing that the assessment order passed by the learned A.O. was a non-speaking order ought to have cancelled the assessment instead of dismissing the appeal on the ground that the A.O. has since rectified the order u/s. 154 of the Act under the facts and in the circumstances of the appellant's case.
4. Without prejudice to the above, learned CIT[A] is not justified in upholding the assessment of Rs.7,76,38,490/- as the total income of the appellant as against the returned income of Rs. 4,01,00,700/- by virtue of dismissal of the appeal under the fact and in the circumstances of the appellant's case.
5. The learned (IT[A] is not justified in upholding the addition of Rs.4,79,73,764/- towards alleged interest accrued on loans and advances with complete disregard to the system of accounting consistently followed by the appellant since past 90 years of formation of the Bank under the facts and in the circumstances of the appellant's case.
6. The learned CIT[A] is not justified in upholding the addition of Rs. 19,41,647/- pressing the provision of Sec. 14A of the income-tax Act without satisfying the conditions stipulated there in under the facts and in the circumstances of the appellant's case.
7. Without prejudice to the right to seek waiver with the Hon'ble CCIT/DG, the appellant denies itself liable to be charged to interest u/s 234 B and 234-C of the Act, which under the facts and in the circumstances of the appellant's case deserves to be cancelled.
For the above and other grounds that may be urged at the time of hearing of the appeal, your appellant humbly prays that the appeal may be allowed and Justice rendered and the appellant may be awarded costs in prosecuting the appeal and also order for the refund of the institution fees as part of the costs.”
During the course of hearing, the ld. counsel for the assessee has invited our attention to the fact that the CIT(Appeals) while adjudicating the appeal has noticed that the AO has not examined certain issues and he accordingly instead of adjudicating all the issues, has asked the AO to pass a rectification order on these issues. Consequently the rectification order was passed by the AO u/s. 154 of the Act. Being aggrieved by the rectification order, the assessee has filed an appeal against the additions made in that order. Now the appeal is pending before the CIT(Appeals).
Against the directions given by the CIT(Appeals) to pass a rectification order by the AO, a challenge is before us through this appeal.
The ld. counsel for the assessee has contended that the CIT(Appeals) has no jurisdiction to ask the AO to pass a rectification order.
He should have adjudicated the entire issue himself and if need be, he could have called for a remand report. Therefore, the action of the CIT(Appeals) is incorrect.
The ld. DR, on the other hand, has submitted that the CIT(Appeals) has neither remanded the matter back to the AO nor set aside his order.
He has simply asked the AO to pass a rectification order on certain issues.
Therefore, there is no error or illegality in the order of CIT(Appeals).
Having carefully examined the orders of lower authorities in the light of rival submissions, we find that the appeal against the rectification order is pending before the CIT(Appeals), where the CIT(Appeals) ought to adjudicate all the issues on merits. We, however, find force in the contention of the assessee that the CIT(Appeals) instead of asking the AO to pass a rectification order, should have disposed the appeal on merits by calling for a remand report from the AO. Under these circumstances, we are of the view that the this matter be sent back to the CIT(Appeals) to adjudicate the issues raised in this appeal along with the other appeal filed against the rectification order. We accordingly set aside the order of CIT(Appeals) and restore the matter to the file of CIT(Appeals) to adjudicate it afresh along with the appeal filed against the order of AO passed on rectification.
In the result, the appeal of assessee is allowed for statistical purposes.
Pronounced in the open court on this 21st day of April, 2017.