M/S. OLIVIA APPARELS PRIVATE LIMITED vs. THE DEPUTY COMMISSIONER OF INCOME TAX

Whether the Tribunal is justified in law in remanding the issue to the file of the Commissioner of Income Tax (Appeals) when it was its duty to call for the records and decide the issue more so when the admitted position is that no reasons have been recorded?

Whether the Tribunal erred in law in keeping that the issue of merits open as such issues cannot be revived on merits on the fresh order of the Commissioner of Income Tax (Appeals) if the need arises on the facts and circumstance of the case?

Whether the Tribunal without even adverting to the issues raised by the revenue could treat the appeal as allowed for statistical purpose and consequently

Though the above questions have been framed at the time of admission, after hearing the learned Advocate for the assessee and the learned Senior Standing Counsel, in our opinion, the only question that arises for consideration is, whether the ITAT could have remitted the matter to the CIT (Appeals) only with regard to satisfaction in Section 153C of the Act and allowed the appeals filed by both assessee and the Revenue.

Shri. Balaram R. Rao, learned Advocate for the assessee submitted that the ITAT1, has held that the issue of validity of the proceedings under Section 153C of the Income Tax Act, 19612 goes to the root of the matter, and set aside the assessment order and remanded the matter. However, appeals filed by the assessee as well as Revenue have been allowed for statistical purposes.

He submitted that CIT3(Appeals) had granted relief to the assessee and therefore, the remand ought to have been limited only with regard to Section 153C of the IT Act. Without examining the appeals on merits and without recording any reasons, Revenue's appeals could not have been allowed.

Shri. K.V. Aravind, learned Senior Standing Counsel for the Revenue, submitted that keeping open all the contentions open, the Tribunal has set-aside the order for statistical purpose and the same is just and appropriate.

The Tribunal has disposed of the appeals by recording thus: "6. Since the issue of validity of proceedings under Section 153C of the Act goes to the root of the matter of assessment framed under Section 153C of the Act has been set-aside to the record of the CIT (Appeals), we do not propose to go into the other issues raised by the assessee as well as the department on merits which are kept open.

In substance, the appeals filed by the Revenue have also been allowed.

Shri. Balaram Rao's, contention is assessee had got relief in the hands of CIT(Appeals). Therefore, Revenue's appeals could not have been allowed without considering them on merits because the relief granted to the assessee by CIT(Appeals) is nullified without granting any opportunity to the assessee. He is right in his submission.

In view of the above, we are of the view that it is just and appropriate for the Tribunal to reconsider the appeals filed by the assessee as also the Revenue on merits. Hence, the following: