Commissioner of Income Tax vs R.J. Traders

Rajive Bhalla, J.—By way of this order, we shall dispose of I.T.As. No. 257, 258, 259 and 270 of 2012 as they involve adjudication of the same questions of law and pertain to the same assessee except I.T.A. No. 270 of 2012 which pertains to another assessee. For the sake of convenience, the facts are being taken from I.T.A. No. 257 of 2012. The Revenue lays challenge to the orders dated October 4, 2010, passed by the Commissioner of income tax (Appeals), Amritsar (hereinafter referred to as "the CIT(A)"), allowing an appeal filed by the assessee and order dated June 7, 2012, passed by the income tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as "the ITAT"), dismissing its appeal.

The assessee is engaged in the business of marketing agricultural produce, i.e., onions, within the notified area of the Market Committee, Amritsar. The assessee filed a return of his income which was processed u/s 143(1) of the income tax Act, 1961 (hereinafter referred to as "the Act"). Upon receipt of the information that the Punjab Mandi Board has passed an order that the assessee has concealed its sales, approval was sought from the Joint Commissioner of income tax, Range-III, Amritsar, and a notice u/s 148 of the Act was served upon the assessee. The assessee filed returns on April 15, 2008. The Assessing Officer, vide order dated December 30, 2008, ordered an addition of Rs. 61,42,981. Aggrieved by this order, the assessee filed an appeal before the Commissioner of income tax (Appeals) which was allowed on October 4, 2010, by holding that as the order passed against the assessee by the Punjab Mandi Board has been set aside the order passed by the Assessing Officer is not warranted. An appeal filed by the Revenue against this order was dismissed by the income tax Appellate Tribunal.

Counsel for the Revenue admits that the orders passed under the Punjab Agricultural Produce Markets Act, 1961 (hereinafter referred to as "the 1961 Act") have been set aside but submits that after remand the authority exercising power under the 1961 Act has passed a fresh order that indicates suppression of quantum of sales and as a consequence, evasion of income. The matter may, therefore, be remitted to the Assessing Officer to determine the escaped income afresh and in accordance with law on the basis of fresh orders passed under the 1961 Act. It is further submitted that though in I.T.A. No. 270 of 2012 no such order has been passed the Assessing Officer may be allowed to pass an appropriate order as and when and if an adverse order is passed under the 1961 Act.

Counsel for the assessee is not in a position to deny that fresh orders have been passed under the 1961 Act but urges that as the assessment order has been set aside by the Commissioner of income tax (Appeals) and the income tax Appellate Tribunal, the fresh order passed under the 1961 Act does not warrant restoring the matter to the Assessing Officer and if at all the Revenue has any right it would have to commence the process of reassessment afresh by seeking approval, etc., in accordance with law subject to the rights of the assessee to raise questions of limitation and jurisdiction, etc.

We have heard counsel for the parties, perused the impugned order as well as the affidavits filed in each case in court today. The order passed under the 1961 Act which was foundation of the order passed by the Assessing Officer has admittedly been set aside. We, therefore, find no reason to hold that the orders passed by the Commissioner of income tax (Appeals) or the income tax Appellate Tribunal setting aside the order passed by the Assessing Officer suffer from any error of law or jurisdiction as would require interference. However, as it is urged by counsel for the Revenue and not denied by counsel for the assessee that fresh proceedings under the 1961 Act have led to passing of a fresh order against the assessees, arrayed as respondents, in I.T.As. No. 257, 258 and 259 of 2012 holding them liable for payment of additional market fee, interest etc., the Assessing Officer would be required to reconsider these orders to ascertain whether any income has escaped assessment or the assessee is guilty of evasion of tax, etc. We, therefore, restore the matter to the Assessing Officer to proceed afresh and in accordance with law after considering orders passed under the 1961 Act and if permissible frame a fresh assessment against the assessee.

As regards I.T.A. No. 270 of 2012, the Assessing Officer would be free to consider framing an assessment in accordance with law as and when and if any adverse order is passed against the assessee under the 1961 Act. In view of what has been stated hereinabove, the impugned orders are affirmed. The order passed by the income tax Appellate Tribunal is modified in the aforementioned terms. The appeals are disposed of accordingly.