High Court Of Madhya Pradesh : Indore Bench
Daulatram Chhotwani vs. CIT
Section 260A, 263
Asst. Year 1984-85 to 1992-93
S.K. Kulshreshtha & N.K. Mody, JJ.
IT Appeal No.71 of 1999
30th August, 2006
Counsel Appeared :
G.M. Chaphekar with D.S. Kale, for the Appellant :
R.L. Jain with Ms. Veena Mandlik, for the Respondent
ORDER
N.K. Mody, J. :
This appeal has been filed by the assessee under s. 260A of the IT Act, 1961 (which shall be referred hereinafter as “Act”), against the order dt. 29th Jan., 1999 in IT Appeal Nos. 115 to 123/Ind/1997, whereby the learned Tribunal dismissed the appeal filed by the assessee against the order dt. 14th Nov., 1996 passed by CIT, Bhopal, whereby revisions filed by the assessee were dismissed. This appeal was admitted by this Court for final hearing on the following substantial questions of law on 11th Feb., 2000 :
(i) “Whether the CIT is entitled to set aside assessment order passed by AO when the case is connected with the provisions of s. 144 of IT Act, 1961, without setting aside the order passed by the Dy. CIT in view of provisions of s. 144A of the Act ?”
(ii) “Whether the CIT is empowered to set aside the order of assessment passed by AO without issuing such notice to such assessee to revive the order passed by the Dy. CIT ?”
(iii) “Whether in absence of order, setting aside the order passed by the Dy. CIT in view of provisions of s. 144A, the divisional authority (sic-revisional) is obliged to make an inquiry of income-tax for each year separately so far as the period under consideration is concerned ?”
(iv) “Whether the order which is being assailed by this appeal is perverse and illegal ?”
2. Short facts of the case are that between the intervening night of 18th and 19th of December, 1991, the Revenue conducted a search of the business and residential premises of assessee under s. 132 of the Act. A notice was issued to the assessee on 3rd Sept., 1992 under s. 142/148 of the Act. On 16th Dec., 1992, returns were filed by the assessee for the asst. yrs. 1984-85 to 1992-93. During the assessment proceedings the assessee moved an application under s. 144A of the Act before the Dy. CIT for issuance of necessary directions. On 23rd March, 1995, directions were issued to AO. On 27th March, 1995, AO passed the order of assessment against which the matter was taken up under s. 263 of the Act. Vide order dt. 14th Nov., 1996, learned CIT passed an order on the revisions filed by the Revenue and set aside the order passed by AO against which appeals were filed by the assessee on 4th Feb., 1997 which were dismissed on 29th Jan., 1999 against which the present appeal is filed. Shri G.M. Chaphekar, learned counsel for the appellant, submits that the revision is maintainable only if the order is illegal and is prejudicial to the interest of Revenue. It is submitted that even if one of the ingredients is missing, then the revision is not maintainable. Learned counsel further submits that the learned CIT had no jurisdiction to examine the legality of the directions dt. 23rd March, 1995 issued by the Dy. CIT under s. 144A of the Act. Shri R.L. Jain, learned counsel for the Revenue, raises a preliminary objection and submits that the matter relates to accounting years 1984-85 to 1992-93 for which separate revisions were filed by the assessee. It is submitted that against the order passed by the CIT, Bhopal, separate appeals were filed by the assessee before the Tribunal, Indore, which were numbered as 115 to 123/Ind/1997. It is submitted that against the order of dismissal of nine appeals, one appeal has been filed by the appellant which is not maintainable. Shri G.M. Chaphekar, learned counsel for the appellant, submits that since one order was passed by the learned Tribunal in all the appeals, therefore, one appeal has been filed. It is also submitted that undisputedly for each of the assessment year separate appeals were required to be filed but since it would have not served any useful purpose except to patronize the typist and the wastage of stationery, one appeal has been filed.
It is true that by one order all the appeals filed by the assessee were disposed of but the judicial discipline requires to file separate appeal for separate accounting year. Even if the appellant was of the view that filing of one appeal shall serve the purpose of the appellant, it was expected from the appellant to obtain permission from this Court to dispense with the appellant from filing separate appeals. In that case also, it was expected from the appellant to file separate sets of Court fee for each of the appeals. However, since the Revenue has also not objected at the initial stage and this Court is bound to decide the appeal on merits because at least one appeal has been filed properly, therefore, ignoring the technical objection raised by the Revenue, this appeal is being disposed of on merits. Sec. 144A of the IT Act reads as under : “144A. Power of Jt. CIT to issue directions in certain cases.—A Jt. CIT may, on his own motion or on a reference being made to him by the AO or on the application of an assessee, call for and examine the record of any proceeding in which an assessment is pending and, if he considers that, having regard to the nature of the case or the amount involved or for any other reason, it is necessary or expedient to do, he may issue such directions as he thinks fit for the guidance of the AO to enable him to complete the assessment and such directions shall be binding on the AO : Provided that no directions which are prejudicial to the assessee shall be issued before an opportunity is given to the assessee to be heard. Explanation : For the purposes of this section, no direction as to the lines on which an investigation connected with the assessment should be made, shall be deemed to be a direction prejudicial to the assessee.”
8. Sec. 263 of the Act which empowers the Revenue to file a revision in case the order is prejudicial to the Revenue, s. 263(1) with its Expln. (a)(i) reads as under : “263. Revision of orders prejudicial to Revenue.—(1) The CIT may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the AO is erroneous insofar as it is prejudicial to the interest of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation : For the removal of doubts, it is hereby declared that, for the purpose of this subsection,— (a) an order passed on or before or after the 1st day of June, 1988] by the AO shall include— (i) an order of assessment made by the Asstt. CIT or Dy. CIT or the ITO on the basis of the directions issued by the Jt. CIT under s. 144A.”
9. Learned counsel for the respondent, Shri R.L. Jain, submits that the learned CIT was within his jurisdiction to examine the validity of the direction issued by the Dy. CIT while examining the order of AO. Reliance was placed on sub-cl. (a)(i) of the Explanation to sub-s. (1) of s. 263 of the Act. Reliance was placed on a decision of Madras High Court in CIT vs. V.V.A. Shanmugam (1998) 147 CTR (Mad) 463 : (1999) 236 ITR 878 (Mad), wherein before a Division Bench of Madras High Court, the question whether the order passed by CIT is in accordance with the directions given by the IAC under s. 144A is amenable to the jurisdiction exercised by CIT under s. 263 of the Act came up for consideration. After placing the reliance on various decisions mentioned in the order, the Madras High Court held that the Tribunal was not correct in coming to the conclusion that the CIT has got no jurisdiction under s. 263 of the Act to interfere with the order passed by IAC under s. 144A of the Act. It was held that the order passed by the Tribunal with regard to jurisdiction under s. 263 of the Act is unsustainable and the matter was remanded to decide the appeal on merits. Further reliance was placed on a decision of the apex Court in the matter of T.N. Civil Supplies Co. Ltd. vs. CIT (2003) 180 CTR (SC) 307 : (2003) 260 ITR 82 (SC), wherein the apex Court has held that the CIT has power under s. 263 of IT Act to revise an order passed by the ITO pursuance to the directions of the IAC under s. 144A and 144B of the Act. The Hon’ble apex Court further observed that there is no scope for limiting the phrase, “order passed by the ITO” in s. 263 to exclude orders passed by the ITO on the directions of superior authority either under s. 144A or 144B. Apart from this, Expln. (a)(i) of s. 263 is self explanatory and leaves no room for confusion as it is mentioned in the Explanation that the order passed by the AO shall include the directions issued under s. 144A of the Act.
10. In view of this, the answer to the questions framed is that in revision, the CIT is competent to examine the legality and the validity of the directions issued by the Dy. CIT under s. 144A of the Act on the basis of which order of assessment has been passed by the AO. In view of this, the appeal stands dismissed. No order as to costs.
[Citation : 293 ITR 123]
