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Judgment
These appeals by the assessee is directed against the order dated 9th November, 2012 passed by the Income Tax Appellate Tribunal in ITA Nos. 557 and 558/Bang/2012 for the assessment years 2006-2007 and 2007-2008. Assessee is a Private Limited Company. Under the impugned order, the Appellate Tribunal had in fact allowed the appeals of the assessee though termed it as for statistical purposes, had directed the Assessing Officer to examine the claims put forth by the assessee to reconsider the question of allowing depreciation on goodwill part of the assessee and for such purposes, the Tribunal had directed the Assessing Officer to ignore the earlier direction that had been issued by the Commissioner of income tax while revising the assessment order to disallow depreciation on the goodwill part.
The assessee, it appears, had been disallowed such depreciation for earlier years but for the assessment year in question, the Assessing Officer had allowed the depreciation on the goodwill part and for subsequent years without assigning any reason, but it was done otherwise.
It is this part of the assessment orders the Commissioner proposed to revise and the assessee had raised a preliminary objection pointing out that there was no error in the order passed by the Assessing Officer; that without order being erroneous, Commissioner does not assume jurisdiction and therefore, he cannot pass any orders by issuing directions but Commissioner nevertheless proceeded to pass an order that it has jurisdiction to issue directions to the assessee to redo the assessment in a particular manner.
It is aggrieved by this order, the assessee had approached the Tribunal. The Tribunal examined the contention of the assessee and thought it proper to interfere with the direction given by the Commissioner to the Assessing Officer and instead, directed the Assessing Officer to redo the matter after giving an opportunity of hearing to the assessee with a categorical direction to the assessing authority not to go by directions issued by the Commissioner (Appeals) which virtually amounts to the Tribunal as appellate authority has set aside the direction issued by the Commissioner.
It is against this remand order for the two assessment orders, the present appeals by the assessee. Appearing on behalf of the appellant/assessee, submission of Sri Nageshwar Rao, learned Counsel is that the Tribunal has committed an error in not deciding the question of jurisdiction which has been specifically raised by the assessee in the appeal; that in the first instance, the Commissioner assumed jurisdiction by over looking the objections raised by the assessee that the order was not erroneous and secondly, the question is also concluded by a judgment of the Supreme Court on the issue and therefore, the Tribunal should have allowed the appeal on that ground instead of remanding the matter to the Assessing Officer.
It is also submitted that an Assessing Officer will not be in a position to over look the directions that had been earlier issued by the Commissioner, a Superior Officer and in this state of affairs, the Tribunal instead of remanding the matter on such question, and for overlooking the direction of the Commissioner, it should have proceeded to hold that the Commissioner did not have any jurisdiction to pass any order and therefore should have set aside the order passed in its totality.
Notice had been issued to the respondent/revenue and the revenue is represented by Mr. K.V. Aravind, learned standing Counsel. Both Counsel for appellant and respondent being present and making submissions, we have heard for disposal though the appeals have come up only for Admission.
Mr. Aravind, learned Standing Counsel appearing on behalf of the respondent/revenue points out that it is only a remand order passed by the Tribunal and the order passed by the Assessing Authority for the subsequent years without assigning reasons is an erroneous order coming within the purview of the revisional jurisdiction of the Commissioner u/s 263 of the income tax Act, 1961 (for short ''the Act'').
Mr. Nageshwar Rao, learned Counsel appearing for the appellant places strong reliance on the judgment of the Supreme Court in the case of Commissioner of Income Tax, Kolkata Vs. Smifs Securities Ltd., . Submission placed on this decision is that a goodwill is held as part of the asset within the scope of Section 32 of the Act in that case and therefore, depreciation can be claimed etc.
We notice that the question really does not arise from the order of the Tribunal for the simple reason that the Tribunal has not decided the issue. Question of law arises from the order of the Tribunal only when the question is decided by the Tribunal, one way or the other.
Mr. Nageshwar Rao, learned Counsel appearing on behalf of the petitioner also places reliance on the judgment of this Court in the case of Commissioner of Income Tax Vs. L.F. D''silva, . Submission is that reasoning given by the Commissioner alone will be the criteria for invoking jurisdiction u/s 263 of the Act and other authorities cannot supplement or give their own reasons and therefore, the Tribunal could not have given any further reasons to uphold the order of the Commissioner on the question of jurisdiction. Submitted that the Tribunal giving the reasons that the question was covered by the decision of the Supreme Court on the aspect whether the Assessing Officers action was right or wrong could have been set right by the Tribunal etc.
The Tribunal has rightly observed that the Commissioner assumed jurisdiction only on the Assessing Authority having not given reason for the passing of the order and therefore, the Tribunal thought it not necessary to interfere on this ground, more importantly the Tribunal directing the Assessing Officer for re-examining the matter in the light of the existing position of law. In that view of the matter, we do not think that the Tribunal has committed any error at variance with the judgment relied upon by the learned Counsel and rendered by this Court in the case of L.F. D''silva (supra).
So far as the jurisdiction is concerned, that was not an issue before the Supreme Court in the case relied on. We find by a judgment of this Court, it has been held that where an Assessing Officer does not assign any reason for passing an order having effect on the revenue in the sense that allowing or disallowing a claim put forth by the assessee and if that is not the correct thing, it can amount to an erroneous order. The Tribunal as well as the Commissioner of Income Tax have placed reliance on the decision of this Court in the case of Commissioner of Income Tax C.R. Building, Queens Road Bangaloreand and The Joint Commissioner of Income Tax (Assessment). Special Range - 6, C.R. Building, Queens Road Bangalore Vs. M/s Infosys Technologies Ltd Plot No 44 and 97A, 3RD Cross, Electronic City, Hosur Road Bangalore - 501 229, .
Mr. Aravind, learned Standing Counsel for the revenue points out to this decision and submits that an assessment order without assigning reasons is erroneous and prejudice to the interest of revenue if it has resulted in loss of revenue or has resulted in reducing the tax liability of an assessee.
It is not for us to go into further facts on this aspect. The Commissioner whether he is right or wrong, assumes jurisdiction on the premise that the order is erroneous and had deprived the revenue of certain amount of taxes, which is a legitimate due by allowing a deduction otherwise not entitled for deduction. The question is not that, Commissioner is right or wrong but whether bona fide had assumed jurisdiction u/s 263 of the Act. Be that as it may. Now that the direction issued by the Commissioner has been set aside and the Tribunal by setting aside the direction issued by the Commissioner has remanded the matter to the Assessing Officer applying the relevant case law, we do not think any prejudice is caused to the assessee under the impugned order and in fact, as pointed out by the learned Standing Counsel for the revenue, it is an order more in favour of the assessee, it is not necessary for us to go into further aspects in this appeal when such facts had not been decided by the Tribunal itself and therefore, these appeals are dismissed at the admission stage as not raising questions of law which are required to be examined in an appeal u/s 260-A of the Act.