Remanding of matter back to AO was not appropriate by CIT(A) & ITAT held HC
Remanding of matter back to AO was not appropriate by CIT(A) & ITAT held HC
AO conducted assessm't based on material on record. It assessed tax recoverable at flat rate of 10% on over all income. On appeal CIT(A) quashed entire assessm't as same was done in very vague manner. On appeal ITAT held, matter should have been remanded back to AO if not done properly. On appeal, HC held, would have been more appropriate either for Tribunal or CIT(A) to have conducted proceedings themselves instead of remanding matter to AO.-500270
Facts in brief:
1. Assessing Officer conducted the assessment based on the material that came on record and assessed the tax recoverable at a flat rate of 10% on the over all income, which was found to have been accrued to the Municipal Corporation.
2. On appeal CIT(Appeals), found that in a very vague manner the assessment has been done and without analyzing the material properly and in contravention of Chapter XVII-B, a flat 10% rate has been adopted over the board for assessing tax. It was also found that while conducting the assessment, the principles of natural justice and rules of evidence in the matter of analyzing the documents and other material are ignored and finding the assessment proceedings to be wholly unsustainable, the Commissioner (Appeals) quashed the entire assessment.
3. On appeal, Tribunal Tribunal found that when the assessment was not done properly, the matter should have been remanded back to the Assessing Officer for proper assessment.
On appeal, HC held as under:
4. The Assessing Officer conducted the assessment proceedings and imposed duty at 10% without evaluating the evidence and the documents properly and finding out as to what is the exact amount of evasion of TDS and to what extent liability can be imposed upon the Municipal Corporation. When the matter was considered by the Commissioner (Appeals), the said authority found that the Assessing Officer has conducted the proceedings of assessment ignoring the principles of natural justice and evidence available on record and without analyzing the documents and finding out the exact nature of evasion of tax, proceeded to imposing tax at a flat rate, which was not permissible.
5. However, having held so, without finding out the exact nature and extent of tax evaded, the Commissioner (Appeals) quashed the entire assessment order and even did not bother to make the assessment himself on the basis of documents and other material available. In not remanding the matter back to the Assessing Officer and only quashing the order of assessment, an error was committed by the Commissioner (Appeals) and, therefore, when the matter traveled to the Tribunal, the Tribunal rightly remitted the case for reconsideration. In doing so, we are of the considered view that no error has been committed by the Tribunal.
6. However, since both the appellate authorities are also facts finding authorities, who can go into factual aspects, it would have been more appropriate either for the Tribunal or the Commissioner (Appeals) to have conducted the proceedings themselves instead of remanding the matter to the Assessing Officer so that assessment process could have been expedited and further appellate procedure avoided.
7. Accordingly, in the facts and circumstances of the case, even though we find no error in remanding matter back to the Assessing Officer, with a view to expedite assessment proceedings, which are pending now for 3-4 years, we deem it proper to modify the order of assessment and the Commissioner (Appeals) shall conduct the process of re-assessment at the appellate stage after hearing all concerned. Accordingly, modifying the orders passed by the Tribunal and Commissioner (Appeals), we dispose of all the three appeals.
8. With the aforesaid, the appeals are disposed of.
Case Reference-Jabalpur Municipal Corporation vs Commissioner Of Income Tax
HIGH COURT OF MADHYA PRADESH : JABALPUR
×
