Decided by: ITAT, PUNE BENCH `A’ : PUNE
In The case of: Prakash Bhalaji Bafna v. ACIT
Appeal No. : ITA NO. 845/PN/2005
Decided on: APRIL 25, 2008
SUMMARY OF CASE LAW
The date of receipt of the order of the Commissioner (Appeals) or the Appellate Tribunal, as the case may be, by the Chief Commissioner or the Commissioner, as the case may be, is material and relevant for the purposes (i) filing an appeal to the Tribunal by the Commissioner against the order of the first appellate authority, (ii) filing an appeal by the Chief Commissioner or the Commissioner to the High Court against the order of the Appellate Tribunal, (iii) for the purposes of computing the period of limitation in making fresh assessment on its remand by the Commissioner (Appeals) or by the Appellate Tribunal, as the case may be (iv) computing the limitation period of six months for passing the order of penalty under Chapter XXI of the Act and not the date of receipt of the order by the Assessing Officer or the date on which the Assessing Officer gives an appeal effect to the appellate order passed by the Commissioner (Appeals) or by the Appellate Tribunal, as the case may be.
RELEVANT PARAGRAPHS:
7. There was a search and seizure action against the assessee on 10-10-1995. In pursuance thereto, the A.0 initiated proceedings u/s 158BC of the Act. Notice u/s 158BC read with section 158BD dated 10-9-1996 was issued to the assessee requiring the assessee to prepare and file the return of income in the prescribed form setting forth his total income including the undisclosed income for the block period from 1-4-1985 to 10-10-1995. Notice u/s 158BC issued by the A.O was served on the assessee on 11-9-1996. The assessee had filed a return of income for the block period in form no. 2B on 30-12-1996. In the block return, the assessee declared undisclosed income at Rs. nil. After examining the facts of the case and after hearing the assessee, the A.O prepared a draft block assessment order on 25-9-1997, by determining the total undisclosed income at Rs. 40,44,250, a copy of which was forwarded by the A.O to the assessee vide letter no. PN.AC.Cir.3( 3)/ /97-98 dated 25-9-1997 with an intimation to the assessee that the assessee may seek an opportunity of being heard before Hon’ble Commissioner of Income-tax, Prapikar Sadan, 60/61 Erandawane, karve Road, Pune-411 004 at 11.30 a.m. on 26-9-1997. After taking the approval from the aforesaid CIT, the A.O completed the block assessment u/s 158BC on 30-9-1997 determining the total undisclosed income of the assessee at Rs. 70,18,180A. Being aggrieved with the A.O’s block assessment order dated 30-9-1997, the assessee preferred an appeal before the Tribunal. The appeal so filed before the Tribunal was registered as IT(SS) A. No. 131/PN/1997. In this appeal, the Asstt. CIT Cir. 3(3) was made as the respondent being the A.O who passed the block assessment order on 30-9-1997. After hearing both the parties and after considering the facts and circumstances of the case, the Tribunal disposed off the appeal by setting aside the A.O’s assessment order and by restoring the entire matter back to the A.O for passing fresh order after conducting further probe and detailed investigation in accordance with the provisions of law and after providing a reasonable opportunity to the assessee vide its order dated 05-03-2003. The Tribunal also identified certain points which the A.O would consider while making a further probe and investigation in accordance with law de novo while passing fresh assessment proceedings. The A.O was given liberty to conduct the detailed probe and further investigation in the manner as he may consider proper by giving copies of the entire material to the assessee and by providing the assessee adequate and Reasonable opportunity to make his submissions and to lead evidence in rebuttal thereto and also provide the assessee an opportunity to cross examine all the persons on whosestatements the A.O intended to place reliance. It was thus ordered that the A.0 would pass a fresh order in accordance with the provisions of law and after providing an adequate and reasonable opportunity to the assessee. The Tribunal’s order is dated 5-3-2003. The Tribunal’s order dated 5-3-2003 was sent on 24-03-2003 (outward No. 136 dated 24-03-2003 of the Registry) by Regd. A.D. post to the CIT Karve Road, Pune-4, being the concerned CIT, who had jurisdiction over the assessee’s case as per the information available from the impugned assessment order, which was a subject matter of appeal before the Tribunal. A copy of the Tribunal’s order was also served on the Senior Departmental Representative on 21-03-2003.
9. In the light of the provisions contained in sub-section (3) of section 254 as it stands after the amendment made by the Finance (No. 2) Act, 1991 with effect from 27-9-1991, the Appellate Tribunal is required to send a copy of any order passed by it u/s 254 of the Act to the assessee and to the Commissioner. Rule 35 of the Income-tax (Appellate Tribunal) Rules, 1963 also prescribes the same thing. It is pertinent to note that between 1-4-1988 and 26-9-1991 u/s 254(3) of the Act, the Appellate Tribunal was required to send a copy of any order passed u/s 254 to the assessee and to the Chief Commissioner or the Commissioner. As a result of the amendment effective from 27-9-1991 of section 254(3) by the Finance (No. 2) Act, 1991, the position as it prevailed prior to 1-4-1988 has been restored. The Legislature has omitted the word “Chief Commissioner or” from section 254(3) which was earlier inserted by the Direct Tax Laws (Amendment) Act, 1987 with effect from 1-4-1988, by the amendment made by the Finance (No. 2) Act 1991 with effect from 27-9-1991 on the analogy that the reference to the “Chief Commissioner” as well as “the Commissioner” in provisions of sub-section (3) of section 254 has resulted in some of the reference applications filed by the department u/s 256 being held as time-barred by the Appellate Tribunal because of reckoning the period of filing an application from the date of service of the order on the Chief commissioner and not the concerned Commissioner though section 256 of the Act provided that the Commissioner may, within 60 days on receipt of the order of the Appellate Tribunal, by an application, required the Tribunal to refer to the Hon’ble High Court any question of law arising out of such order. In the present case, we are concerned as to the position of law effective from 27-9-1991 requiring the Tribunal of sending a copy of any orders passed u/s 254 of the Act only to the Commissioner and not the Chief Commissioner. A reading of sub-section (2) and (3) of section 253 of the Act would indicate that the Commissioner may, if he objects to any order passed by the CIT(A), direct the A.O to appeal to the Appellate Tribunal against the impugned order, and such appeal shall be filed within 60 days of the date on which the order sought to be appealed against is communicated to the Commissioner. The assessee is also permitted to file an appeal to the Appellate Tribunal against the CIT(A)’s order as would be clear on reading the sub-section (1) of section 253 of the Act, and such appeal shall also be filed within 60 days of the date of order sought to be appealed against is communicated to the assessee. An appeal to be filed by the assessee or by the Commissioner to the Appellate Tribunal shall be in the prescribed form and shall be verified in the prescribed manner. The prescribed form is Form no. 36 as provided under Rule 47(1) of the IT. Rules in Form No. 36 at column 4, the details as to the A.O passing the original order is to be provided. In the cause title, the details of the appellant and the respondent are to be given. Thus, the expression Commissioner” occurring in sub-section (2) of section 253 and in sub-section (3) of section 254 would mean the Commissioner having jurisdiction over the assessee or the matter in respect of which the original order was passed by the concerned A.O, the designation of which is mentioned in the memorandum of appeal unless otherwise modified or amended subsequently by any application filed either by the appellant or by the respondent before the Tribunal.
10. It is also pertinent to note that if the Chief Commissioner or Commissioner is aggrieved of any part of the order passed by the Tribunal may file an appeal to the High Court as provided in sub-section (2) of section 260A of the Act, and such appeal by the Chief Commissioner or Commissioner shall be filed within 120 days from the date on which the order appealed against is received by the Chief Commissioner or Commissioner. It is thus clear that for the purpose of computing the limitation period of 120 days for filing the appeal to the High Court by the department, the relevant date is the date on which the order passed by the Tribunal is received by the Chief Commissioner or the Commissioner and not the date on which the order of the Tribunal is received by the concerned A.O or the date on which the concerned Officer has given effect to the Tribunal’s order. What is material is the date on which order of the Tribunal is received by the Chief Commissioner or the commissioner for the purposes of filing an appeal by the department to the High Court. Similarly, if the commissioner is aggrieved of any of the order passed by the first appellate authority, section 253(2) empowers the Commissioner to direct the A.O to prefer an appeal to the Tribunal against such order and such appeal shall be filed within 30 days from the date on which the order of the first appellate authority is received by the Commissioner as would be clear on reading the provisions contained in sub-section (2) and sub-section (3) of section 253 of the Act. The right to file an appeal to the Tribunal as well as to the High Court is granted to both the assessee as well as to the Commissioner. The right is granted u/s 253(2) to the Commissioner to direct the A.O to appeal to the appellate Tribunal against the order of the first appellate authority which would make it clear that the person who has right to appeal to the Appellate Tribunal against the order of the first appellate authority is the Commissioner and not the A.O. When A.O files an appeal under the directions of the Commissioner performs merely a ministerial functions. The use of the expression “the Commissioner” or the “the A.O” in section 253(2) denotes that the Commissioner or the A.O referred to is that Commissioner or the A.O who has jurisdiction over the assessee or the matter at the time when the appeal was sought to be filed by the department. Consequently on disposal of the appeal by the Tribunal, the Tribunal shall send a copy of any order passed by it u/s 254(1) to the commissioner who had jurisdiction over the assessee or the matter as so mentioned in the memorandum of appeal unless the same is changed or modified by an application filed either by the appellant or by the respondent before the Tribunal. The provisions of the Act relating to the (i) communication of the order passed by the CIT(A), (ii) a right of appeal given to the department to file an appeal to the Tribunal against the order of the first appellate authority’ (iii) communication of the order passed by the Tribunal and (iv) right of appeal given to the department to file an appeal to the High Court against the order of the Tribunal are set out as under:-
(i) Section 250(1) - provides that the Commissioner (Appeals) shall communicate the order passed by him to the assessee and to the Chief Commissioner or the Commissioner.
(ii) Section 253(2) and 253(3) - provide that the Commissioner may direct the A.O to file an appeal to the Appellate Tribunal against the order of the first appellate authority within 60 days of the date on which the order sought to be appealed against was communicated to the Commissioner.
(iii) Section 254(3) provides that the Appellate Tribunal shall send a copy of any orders passed by the Appellate Tribunal to the assessee and to the Commissioner.
(iv) Section 260A(2) and sec. 260A(2)(c) provide that the for the Chief Commissioner or the commissioner may file an appeal to the High Court against any order passed by the appellate Tribunal within 120 days from the date on which the order appealed against is received by the assessee or the Chief Commissioner or Commissioner.
11. In the light of the scheme of the Act contained in the aforesaid provisions, it is amply clear that the date of receipt of the appellate order appealed against by the Commissioner or Chief Commissioner, as the case may be, is material for the purposes of filing an appeal by the Commissioner to the Appellate Tribunal and by the Chief Commissioner or Commissioner to the High Court and for the purposes of computing the period of limitation for filing such appeal. Identical provisions as analogous to the provisions contained in section 253(3) and 260A(2)(a) have been made by the Legislature with reference to the time limit provided for completing the fresh assessment by the A.O on its remand either by the CIT(A) or by the Appellate Tribunal or by any authority as mentioned in sub-section (2A) of section 153 of the Act, and also with reference to the provisions providing for the time limit to pass a penalty order under Chapter XXI of the Act as mentioned in section 275(1 )(a) of the Act. In section 153(2A) of the Act, the time limit for passing a fresh assessment order is provided as one year from the end of the financial year in which the order passed by the first appellate authority u/s 250 or by the Appellate Tribunal u/s 254 is received by the Chief Commissioner or the Commissioner or as the case may be , the order _u/s 263 or 264 is passed by the Chief Commissioner or the Commissioner. For the purposes of sub-section (2A) of section 153 what is material is the date on which the order passed by the Commissioner (Appeals) under section 250 or the order passed by the Appellate Tribunal under section 254 is received by the Chief Commissioner or the Commissioner has similarly provided for the purposes of filing an appeal by the department to the Appellate Tribunal u/s 253(3) and to the High Court u/s 260A(2)(a) of the Act. Under section 275(1)(a) also the material date is the date on which the order of the Commissioner (Appeals) or the as the case may be, the appellate tribunal is received by the Chief Commissioner or the Commissioner to compute the limitation period of six months.
12. In the light of the aforesaid provisions contained in section 250 (7), 253(2), 253(3); 254(3), 260A(2)(a), 153(2A) and 275(1)(a) as discussed above, we hold that the date of receipt of the order of the Commissioner (Appeals) or of the Appellate Tribunal, as the case may be, by the Chief Commissioner or the Commissioner, as the case may be, is material and relevant for the purposes (i) filing an appeal to the Tribunal by the Commissioner against the order of the
first appellate authority, (ii) filing an appeal by the Chief Commissioner or the Commissioner to the Hon’ble High Court against the order of the Appellate Tribunal, (iii) for the purposes of computing the period of limitation in making fresh assessment on its remand by the Commissioner (Appeals) or by the Appellate Tribunal, as the case may be. (iv) computing the limitation period of six months for passing the order of penalty under Chapter XXI of the Act and not the date of receipt of the order by the Assessing Officer or the date on which the Assessing Officer gives an appeal effect to the appellate order passed by the Commissioner (Appeals) or by the Appellate Tribunal, as the case may be.