ITO, GULBARGA vs. M/S N K MINERALS, GULBARGA

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ITA 555/BANG/2016Status: DisposedITAT Bangalore20 January 2017AY 2010-115 pages

In favour of the Revenue: the Revenue's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the CIT(A) exceeded his jurisdiction by remanding issues to the AO for denovo consideration, as the power to remand was removed from CIT(A) after the amendment to Section 251 of the IT Act. The CIT(A) should have called for a remand report and decided on merits.

What were the facts?

The assessee firm declared a total income of Rs. 8,64,330 for AY 2010-11. The AO made additions totaling Rs. 1,29,60,725, including disallowance of fictitious and URD purchases, and variations in sundry creditors. The CIT(A) set aside certain additions for denovo consideration and deleted another addition.

What were the issues?

Whether the CIT(A) has the power to remand cases to the AO for denovo consideration after the amendment to Section 251 of the IT Act. The extent of the CIT(A)'s jurisdiction in dealing with appeals.

Which sections of the Income-tax Act were involved?

Section 251

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “C” BENCH : BANGALORE

Before: SHRI GEORGE GEORGE & SHRI INTURI RAMA RAO

For Appellant: Shri. B. Sudhindra, CA
For Respondent: Shri. M. K. Biju, JCIT, Shri. B. Sudhindra, CA
Hearing: 19.1.2017Pronounced: 20.1.2017

Per George George, Judicial Member

This appeal at instance of the revenue is directed against CIT(A)’s order dated 27.01.2016. The relevant assessment year is 2010 – 2011.

Brief facts of the case are as follows: 2.

The assessee is a firm carrying out business in iron ore etc. The return of income was filed for the assessment year 2010-11 on 26.09.2010 declaring total income of Rs.8,64,330/-. The assessment under section 143(3) of the Act was completed vide order dated 22.03.2013 at a total income of Rs.1,38,25,100/-. The AO had made the following additions/disallowances.

1.

Fictitious RD Purchase Disallowed - Rs. 3,62,273/- 2. URD Purchase Disallowed - Rs.1,14,73,263/- 3. Variations found under Sundry Creditors - Rs.10,80,910/- 4. Bill claimed twice under Deduction on moisture content A/c. - Rs.3,247/- 5. One-fourth of the expenses towards personal use - Rs.41,032/-

Total additions - Rs.1,29,60,725/-

3.

Aggrieved by the assessment, the assessee preferred an appeal to the first appellate authority. The CIT(A) set aside the assessment to the AO for denova consideration with regard to the addition of Rs.1,14,73,263/-, Rs.3,62,273/- and Rs.10,80,910/-. The CIT(A) had deleted the addition of Rs.41,032/- on account of one-fourth of the expenses towards personal use.

4.

Aggrieved by the order of the CIT(A), the revenue is in appeal before us by raising the following grounds:

5.

The learned DR submitted that CIT(A) is not justified in remanding the issue for denovo consideration to the AO. It was submitted that subsequent to 01.06.2001, the power of remanding the cases vested with the CIT(A) was done away and necessarily the issue have to be decided by the CIT(A). The learned AR present did not have any serious objection in the entire matter to be reconsidered by the CIT(A).

6.

We have heard the rival submission and perused the material on record. The additions made by the AO amounting to Rs.3,62,273/-, Rs.1,14,73,263/- and Rs.10,80,910/- were set aside by the CIT(A) and he remanded the three issues to AO for denova consideration. The CIT(A) does not have power to remand the case to the AO, subsequent to the amendment to section 251 of IT Act by Finance Act, 2001 w.e.f. 01.06.2001. If certain clarification is needed from the AO, the CIT(A) is at liberty to call for the remand report and on receipt of the same, has to decide the issue on merits. Therefore, the CIT(A) in the impugned order by remanding the various issues to the AO has exceeded the jurisdiction. Hence, we are of the view that the CIT(A) order needs to be quashed and accordingly we quash the same. The CIT(A) is directed to reconsider the entire issues that are raised in this appeal and dispose off the same after affording reasonable opportunity of hearing to the assessee. It is ordered accordingly.

7.

In the result, the appeal filed by the revenue is allowed for statistical purposes.

Order pronounced in the open court on 20-1-2017.

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