DCIT, Circle, Patiala V. M/s Punjab Beverages Pvt. Ltd., Patiala

ITA 446/CHANDI/2018

• Counselvise Citation: [2018] 118 COUNSELVISE.COM (IT) 9211 (ITAT-CHANDIGARH)
• Duration Of Justice: 8 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-12-2018
• Appeal Filed By: Department
• Order Result: Dismissed
• Bench Allotted: B
• Next Hearing Date: 19-09-2018
• Assessment Year: 2001-2002
• Appeal Filed On: 11-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHISH GUPTA
• Keywords: Business income; Depreciation; Assessment record; Unabsorbed depreciation
• Section: 143(3); 142(1); 260A; 246; 148

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH B, CHANDIGARH , !'# $' % & , '( BEFORE SHRI SANJAY GARG, JUDICIAL MEMBER AND SMT.ANNAPURNA GUPTA, ACCOUNTANT MEMBER ./ ITA NO.438/CHD/2018 / ASSESSMENT YEAR : 2001-02 M/S PUNJAB BEVERAGES PVT. LTD., 60, YADVINDRA COLONY, THE MALL, PATIALA THE D.C.I.T., CIRCLE PATIALA. ./PAN NO: AAACP8581C /APPELLANT /RESPONDENT ./ ITA NO.446/CHD/2018 / ASSESSMENT YEAR : 2001-02 THE D.C.I.T., CIRCLE PATIALA. M/S PUNJAB BEVERAGES PVT. LTD., 60, YADVINDRA COLONY, THE MALL, PATIALA ./PAN NO: AAACP8581C /APPELLAN T /RESPONDENT /ASSESSEE BY: SHRI TARANDEEP SINGH, ADV. ! / REVENUE BY : SHRI ASHISH GUPTA, CIT DR '# $ /DATE OF HEARING : 19.09.2018 %&'(# /DATE OF PRONOUNCEMENT : 17.12.2018 ') / ORDER PER ANNAPURNA GUPTA, ACCOUNTANT MEMBER .: THE IMPUGNED CROSS APPEALS BY THE ASSESSEE AND THE REVENUE HAVE BEEN FILED AGAINST THE ORDER PASSED U /S 250(6) OF THE INCOME THE INCOME TAX ACT, 1961 (HERE INAFTER REFERRED TO AS ACT) BY THE LD. COMMISSIONER OF IN COME TAX ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 2 (APPEALS), PATIALA (IN SHORT (CIT(A)) DATED 5.1.2 018 RELATING TO ASSESSMENT YEAR 2001-02. 2. THIS IS SECOND ROUND BEFORE THE I.T.A.T. AND BRI EF FACTS RELATING TO THE CASE ARE THAT THE ASSESSEE IS A DOM ESTIC COMPANY ENGAGED IN THE BUSINESS OF MANUFACTURING AN D TRADING OF SOFT DRINKS. FOR THE IMPUGNED ASSESSMENT YEAR NO RETURN U/S 139(1) OF THE ACT HAD BEEN FILED, BUT IN RESPONSE TO NOTICE U/S 142(1) OF THE ACT, THE ASSESSEE RETUR NED NIL INCOME ACCOMPANIED BY A LETTER STATING THAT NO BUSI NESS HAD BEEN CONDUCTED BY THE ASSESSEE DURING THE YEAR. THE SAID RETURN WAS HELD TO BE AN INVALID RETURN U/S 13 9(9) OF THE ACT ,ON ACCOUNT OF DEFICIENCY POINTED OUT THERE IN BY THE ASSESSING OFFICER (A.O).. THEREAFTER, FROM THE RETU RN FILED BY THE ASSESSEE FOR THE SUBSEQUENT YEAR I.E. ASSESSMEN T YEAR 2002-03 THE A.O. NOTED THAT THE ASSESSEE HAD TAXABL E INCOME FOR THE IMPUGNED ASSESSMENT YEAR IN TERMS OF REMISSION OF LIABILITY OF PAYMENT OF INTEREST ON BA NK LOAN, PURSUANT TO ONE TIME SETTLEMENT WITH THE BANK. ARME D WITH THIS INFORMATION, THE A.O. ASSUMED JURISDICTION TO REASSESS THE ASSESSEE COMPANY FOR THE IMPUGNED YEAR AND ISSU ED NOTICE U/S 148 OF THE ACT. IN RESPONSE TO THE SAME, THE ASSESSEE CONCEDED THAT IT HAD ENTERED INTO ONE TIME SETTLEMENT WITH PUNJAB & SIND BANK AND ORIENTAL BAN K OF COMMERCE, AS PER WHICH A SUM OF RS.4,95,98,644/- WA S AGREED TO BE PAID IN FULL AND FINAL SETTLEMENT OF A LL THE CLAIMS OF THE BANK AS ON 31.3.2001. THE ASSESSEE FU RTHER CONTENDED THAT INSPITE OF THE SAID SETTLEMENT ENTER ED INTO ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 3 BY THE ASSESSEE NO INTEREST WAS LIABLE TO BE TAXED IN THE IMPUGNED YEAR SINCE THE DEPARTMENT HAD NEVER ALLOWE D THE ASSESSEES CLAIM OF INTEREST ON THESE BANK LOANS IN THE PAST, RIGHT FROM ASSESSMENT YEAR 1997-98 TO 1998-99 AMOUN TING TO RS.2,44,63,820/-. THE A.O. REJECTED THE CLAIM OF THE ASSESSEE AND ASSESSED THE SAID AMOUNT OF INTEREST O F RS.2,24,34,509/- AS INCOME FROM OTHER SOURCES, AGAI NST WHICH ADJUSTMENT OF BROUGHT FORWARD LOSSES AS WELL AS CLAIM OF DEPRECIATION WAS DECLINED ON THE GROUND THAT THE ASSESSEE COMPANY HAD NO BUSINESS INCOME DURING THE YEAR UNDER CONSIDERATION. THE MATTER WAS CARRIED IN APPE AL BEFORE THE LD.CIT(A) WHO DISMISSED THE ASSESSEES A PPEAL. ON FURTHER APPEAL TO THE I.T.A.T., IT WAS HELD THAT THE REMISSION OF INCOME U/S 41(1) OF THE ACT SHOULD BE TAXED UNDER THE HEAD INCOME FROM BUSINESS ONLY AND NO T AS INCOME FROM OTHER SOURCES. BUT AT THE SAME TIME T HE I.T.A.T. RESTORED THE MATTER BACK TO THE A.O. TO VE RIFY WHETHER ANY DEDUCTION ON ACCOUNT OF INTEREST TOWARD S BANK LOAN WAS CLAIMED AND ALLOWED. THE I.T.A.T. FURTHER HELD THAT UNABSORBED DEPRECIATION OF THE BLOCK OF A.Y 1997-98 TO 2001-02 WAS NOT TO BE ALLOWED TO BE SET OFF AGAINST INCOME. ON RECEIPT OF THE AFORESAID ORDER OF THE TRIBUNAL T HE A.O. REDUCED THE DEMAND OF RS.1,90,32,260/- ,WHICH WAS R AISED PURSUANT TO THE ORIGINAL ORDER OF ASSESSMENT AGAINS T THE ASSESSEE, VIDE PLUS MINUS ACCOUNT NO.86 ON 28.3.201 3. SUBSEQUENTLY, THE A.O. FRAMED THE ASSESSMENT AGAIN UNDER THE PROVISIONS OF SECTION 143(3)/254 OF THE ACT EXP RESSING HIS INABILITY TO FOLLOW THE DIRECTIONS OF THE HON'B LE TRIBUNAL ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 4 SINCE THE ASSESSEE HAS FAILED TO FURNISH NECESSARY DOCUMENTARY EVIDENCES TO CORROBORATE ITS CLAIM. THE ASSESSEE WENT IN APPEAL AGAINST THE AFORESAID ORDER OF THE A.O. CHALLENGING THE IMPUGNED ORDER AS BEING NON-ES T SINCE THE A.O. HAD ALREADY PASSED AN ORDER EARLIER ON 28- 03-13 AND THERE COULD NOT BE TWO ASSESSMENT ORDERS FOR AS SESSING THE SAME INCOME FOR THE SAME ASSESSMENT YEAR ON THE SAME PERSON. THIS CLAIM OF THE ASSESSEE WAS DISMISSED BY THE CIT(A) STATING THAT THE EARLIER ORDER PASSED WAS ON LY A COMPUTATION SHEET AND NOT AN ORDER PASSED UNDER THE ACT. THE ASSESSEE FURTHER CHALLENGED THE ORDER ON MERITS , TO WHICH THE CIT(A) HELD THAT THE A.O. HAD PASSED THE ORDER IN ABJECT DISREGARD OF THE DIRECTIONS OF THE TRIBUNAL, SINCE ALL NECESSARY EVIDENCES HAD BEEN FILED BY THE ASSESSEE FOR COMPLYING WITH THE DIRECTIONS OF THE TRIBUNAL AND/O R WERE AVAILABLE WITH THE A.O. IN THE ASSESSMENT RECORD PE RTAINING TO THE ASSESSEE. THE CIT(A) HELD THAT WITHIN THE PH RASEOLOGY OF SECTION 251(1)(A) OF THE ACT, HE WAS LEFT WITH N O OPTION BUT TO ANNUL THE IMPUGNED ASSESSMENT BUT ON NOTING THAT THIS ACT WOULD LEAD TO UNINTENDED CONSEQUENCES OF C LOSURE OF THE CASE AS NON-EST OR VOID ABINITIO, WHICH WOUL D BE UNFAIR TO THE REVENUE, HE DIRECTED THE A.O. TO COMP LY WITH THE DIRECTIONS OF THE I.T.A.T. AND VERIFY THE CLAIM OF THE ASSESSEE VIS--VIS INTEREST AND UNABSORBED DEPRECIA TION ALLOWANCE AND THEREAFTER ASSESS THE INCOME IN ACCOR DANCE WITH LAW. THE LD.CIT(A) STATED THAT HIS AFORESAID D IRECTIONS WOULD NOT TANTAMOUNT TO SETTING ASIDE THE ASSESSMEN T ORDER AND REFERRING THE CASE BACK TO THE A.O. FOR MAKING FRESH ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 5 ASSESSMENT WHICH HAD BEEN OMITTED FROM SECTION 251( 1)(A) OF THE ACT GIVING THE POWERS TO THE CIT(A), SINCE THE A.O. HAD FAILED TO COMPLY WITH THE DIRECTIONS OF THE I.T .A.T. AND VIDE THIS ORDER THE CIT(A) WAS ONLY DIRECTING HIM T O COMPLY WITH THE SAME WHICH DIRECTIONS COULD NOT BE CONSTRU ED AS SETTING ASIDE OF ASSESSMENT ACCORDINGLY. 3. AGGRIEVED BY THE SAME BOTH THE ASSESSEE AND THE REVENUE HAVE COME UP IN APPEAL BEFORE US, WITH THE ASSESSEE CHALLENGING THE ORDER OF THE CIT(A) HOLDING THAT NO ASSESSMENT ORDER WAS PASSED EARLIER AND, THEREFORE, THE ASSESSMENT ORDER IMPUGNED IN THE PRESENT CASE CANNO T BE TREATED AS A SECOND ASSESSMENT ORDER WHILE THE REVE NUE HAS CHALLENGED THE ACTION OF THE CIT(A) IN RESTORING TH E MATTER BACK TO THE A.O. FOR VERIFICATION. WE SHALL FIRST BE TAKING UP THE ASSESSEES APPEAL IN ITA NO.438/CHD/2018. ITA NO.438/CHD/2018(ASSESSEES APPEAL): 4. GROUNDS RAISED BY THE ASSESSEE READ AS UNDER: 1. THAT ON FACTS AND IN LAW THE COMMISSIONER OF INCOME TAX (APPEALS) {HEREINAFTER REFERRED TO AS 'CIT(A)'} HAS ERRED IN NOT APPRECIATING THAT THE ORDER OF ASSESSMENT DATED 23TH MARCH, 2014 PASSED BY ASSESSING OFFICER {HEREINAFTER REFERRED TO AS 'AT)'} IS NON-EST AND BAD IN LAW IN AS MUCH AS AFTER HAVING PASSED AN ORDER DATED 28 TH MARCH, 2013 U/S 143(3)/254 OF THE INCOME TAX ACT, 1961 {HEREINAFTER R EFERRED TO AS 'ACT'} NO OTHER ORDER GIVING EFFECT TO ITAT O RDER COULD HAVE BEEN PASSED. 2. THAT ON FACTS AND IN LAW THE CIT(A) ERRED IN TREATING ORDER DATED 28 TH MARCH, 2013 AS MERELY A COMPUTATION SHEET. 3. THAT ON FACTS AND IN LAW THE ORDER OF ASSESSMENT U/S 143(3)7254 OF THE ACT PASSED BY THE AO IS BAD I N LAW ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 6 AND VOID AB INITIO. 5. AS IS EVIDENT FROM THE ABOVE DISCUSSION THE ISSU E TO BE ADJUDICATED IS WHETHER THE A.O. HAD PASSED ASSESSM ENT ORDER ON 28.3.2013 AS A CONSEQUENCE OF WHICH THE SUBSEQUENT ASSESSMENT ORDER PASSED ON 28.3.2014 WHI CH IS THE IMPUGNED ORDER IN THE PRESENT CASE WAS NON-EST AND VOID ABINITIO SINCE TWO ASSESSMENT ORDERS COULD NOT BE P ASSED BY THE A.O. ON THE SAME PERSON FOR THE SAME YEAR. BEFO RE PRECEDING IT IS, THEREFORE, NECESSARY TO REPRODUCE THE DOCUMENTS DATED 28.3.2013 WHICH IS THE BONE OF DISP UTE BETWEEN THE TWO PARTIES, WITH THE ASSESSEE CLAIMING IT TO BE AN ASSESSMENT ORDER, WHILE THE REVENUE CLAIMS IT TO BE AN ADMINISTRATIVE DOCUMENT ONLY. THE SAME WAS FILED BE FORE US AT PAPER BOOK PAGE NO.32 AND IS REPRODUCED HEREUNDE R: INCOME TAX COMPUTATION NAME OF THE ASSESSES M/S PUNJAB BEVERAGES PVT. LTD. ADDRESS REGD. OFFICE # 60, YADWINDRA COLONY, PATIAIA ASSESSMENT YEAR 2001-02 STATUS COMPANY DATE OF ORDER 28.3.2013 ASSESSED INCOME U/S 143(3)/147 22434509/- INCOME ASSESSED AFTER CIT(A) ORDER INN APPEAL NO.203/08-09 DATED 18.03.2011 & I.T.A.T. INCOME ASSESSED AFTER CIT(A)'S ORDER IN APPEAL NO. 203/08-09 DATED 18.03.2011 & ITAT ORDER IN ITA NO. 590/CHD./2011 DATED 27.02.2013 NIL TOTAL TAX & INTEREST NIL NET TAX PAYABLE NIL DEMAND OF RS. 19032260/- TAKEN INTO +- A/C NO.86 ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 7 (ROHIT KUMAR) ASST. COMMISSIONER OF INCOME TAX, CIRCLE, PATIALA COPY TO ASSESSEE 6. DRAWING OUR ATTENTION TO THE ABOVE, THE LD. COUN SEL FOR ASSESSEE STATED THAT THE SAID ORDER WAS CLEARLY AN APPEAL EFFECT ORDER PASSED IN PURSUANCE TO THE DIRECTIONS OF THE I.T.A.T. IN ITS ORDER PASSED IN ITA NO.590/CHD/2011 DATED 27.2.2013. THE LD. COUNSEL FOR ASSESSEE STATED THAT ALL THE CONTENTS OF AN ASSESSMENT ORDER FIND MENTION IN THE IMPUGNED DOCUMENT I.E. THE NAME OF THE ASSESSEE, TH E DATE OF THE ORDER, ASSESSED INCOME U/S 143(3)/147, INCOM E TO BE ASSESSED PURSUANT TO ORDER OF HON'BLE I.T.A.T., FIN AL TAX DEMAND, TAX DEMAND PAYABLE AND EVEN COPY TO ASSESS EE FIND MENTION IN THE SAME. THE LD. COUNSEL FOR ASSES SEE STATED THAT ALL THE ABOVE ARE INGREDIENTS OF AN ASS ESSMENT ORDER AND, THEREFORE, FOR ALL PURPOSES THE AFORESAI D DOCUMENT, DATED 28.3.2013, WAS AN APPEAL EFFECT ORD ER. THE LD. COUNSEL FOR ASSESSEE POINTED OUT THAT EVEN THE A.O. HAD ACCEPTED THE SAID FACT THAT THE IMPUGNED DOCUMENT W AS AN APPEAL EFFECT ORDER IN HIS REMAND REPORT DATED 7.9. 2016 FILED BEFORE THE CIT(A). DRAWING OUR ATTENTION TO THE SAM E PLACED AT PAPER BOOK PAGE NOS.54 AND 55, THE LD. COUNSEL F OR ASSESSEE POINTED OUT THAT AT PARAS 3 AND 5 OF THE S AID REMAND REPORT THE A.O. HAD CATEGORICALLY MENTIONED THAT VIDE HIS ORDER DATED 28.3.2013 THE APPEAL EFFECT TO THE ORDER OF THE I.T.A.T. IN ITA NO.590/CHD/2011 WAS GIVEN. T HE RELEVANT PARA NOS.3 AND 5 ARE REPRODUCED HEREUNDER: 3. THE APPEAL EFFECT TO THE .ORDER OF THE HON'BLE ITA T IN ITA NO, 590/CHD/2011 DATED 27.02.2013 WAS GIVEN 'BY ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 8 THE A.O. VIDE ORDER DATED 28.03,2013 AND THE INCOME WAS REDUCED TO NIL AS THE APPEAL OF THE ASSESSEE WAS PARTLY ALLOWED FOR STATISTICAL PURPOSES. 5. KEEPING IN VIEW THE FACTS OF THE CASE STATED AB OVE, IT IS QUITE CLEAR THAT THE ORDER DATED 28.03.2013 WAS PASSED GIVING APPEAL EFFECT TO THE ORDER OF THE HON 'BLE ITAT DATED 27.02.2013 AND NOT AN ORDER OF REASSESSMENT (COPY ENCLOSED). THE REASSESSMENT ORDER DATED 28.03.2014 U/S!43(3)/254 OF THE ACT WAS PASSED GIVING EFFECT TO THE SET ASIDE PROCEEDINGS. 7. THE LD. COUNSEL FOR ASSESSEE FURTHER STATED THAT EVEN BEFORE THE I.T.A.T. THE LD.CIT DR, DURING THE COUR SE OF HEARING, HAD FILED A REPORT OF THE A.O. DATED 14.8. 2018 (INADVERTENTLY TYPED AS 14.8.2017) STATING SO. OUR ATTENTION WAS DRAWN TO FIRST PARA OF THE SAID REPORT WHEREIN THE A.O. HAD STATED AS UNDER: LD. AR HAS CLAIMED VIDE PAGE 32 OF PAPER BOOK SUBMITTED BEFORE HON'BLE ITAT THAT ON 28.03.2013, A N ASSESSMENT ORDER WAS PASSED BY ASSESSING OFFICER. HOWEVER, THE SAID DOCUMENT IS MERELY A COMPUTATION SHEET WHICH WAS FOR THE PURPOSE OF GIVING APPEAL EF FECT O THE DIRECTIONS OF HON'BLE ITAT. FURTHER, EXAMINATION OF ASSESSMENT FILE SHOWS THAT THERE ISN'T ANY ASSESSME NT ORDER WHICH WAS PASSED ON DATED 28.03.2013. SINCE N O ASSESSMENT ORDER WAS PASSED ON 28.03.2013, THE ASSESSMENT ORDER PASSED ON 28.03.2014 CANNOT BE TERMED RE-ASSESSMENT. 8. THE LD. COUNSEL FOR ASSESSEE STATED THEREAFTER T HAT IT IS TRITE LAW THAT EVEN THE ORDER GIVING APPEAL EFFECT IS AN ORDER OF ASSESSMENT. OUR ATTENTION WAS DRAWN TO THE FOLL OWING CASE LAW IN SUPPORT OF THE ABOVE CONTENTION: 1) CALTEX OIL REFINING (INDIA) LTD. VS. CIT, 202 ITR 375 (BOM) 9. THE LD. DR AT THIS JUNCTURE REBUTTED AND STRONGL Y SUPPORTED THE ORDER OF THE CIT(A) STATING THAT AS I S CLEARLY EVIDENT FROM THE HEADING OF THE DOCUMENT THAT IT IS ONLY A COMPUTATION SHEET REDUCING THE DEMAND PENDING VERIF ICATION ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 9 OF THE MATERIAL FACTS AS DIRECTED BY THE TRIBUNAL. THE LD. DR DREW OUR ATTENTION TO THE LAST SENTENCE OF THE SAID DOCUMENT STATING THAT THE DEMAND OF RS.1,90,32,260/- TAKEN INTO PLUS MINUS A/C NO.86, STATING THAT THIS LINE DIRECT LY SUPPORTS THE CASE OF THE REVENUE THAT THE SAID SHEE T WAS ONLY A COMPUTATION SHEET REDUCING THE DEMAND TO NIL , PENDING VERIFICATION OF THE MATERIAL FACTS AS DIREC TED BY THE TRIBUNAL. THE LD. DR POINTED OUT FROM THE ORDER OF THE CIT(A) THAT THE SAID DOCUMENT WAS NOT ACCOMPANIED B Y NOTICE OF DEMAND U/S 156 OF THE ACT WHICH IS MANDAT ORY REQUIREMENT EVEN IF THE DEMAND IS NIL, FURTHER SUPP ORTS THE CASE OF THE REVENUE. 10. TO THIS, THE LD. COUNSEL FOR ASSESSEE STATED TH AT THERE IS NO STATUTORY REQUIREMENT TO ISSUE NOTICE U/S 156 OF THE ACT WHEN THE DEMAND IS NIL AND THAT EVEN IF THE DOC UMENT IS TITLED INCOME TAX COMPUTATION IT WILL NOT CHANGE ITS STATUS AS BEING ASSESSMENT ORDER ,SINCE ALL THE KEY INGRED IENTS OF AN ASSESSMENT ORDER FIND MENTION THEREIN. OUR ATTEN TION WAS DRAWN TO THE ORDER OF THE HON'BLE APEX COURT IN THE CASE OF KALYAN KUMAR RAY VS. CIT REPORTED IN 191 ITR 634 (S C) IN THIS REGARD. COPY OF THE SAME WAS PLACED BEFORE US. THE LD. COUNSEL FOR ASSESSEE FURTHER CONTENDED THAT SINCE T HE DEMAND AFTER THE I.T.A.T. ORDER DOES NOT SURVIVE TH AT IS WHY THE A.O. VIDE ORDER DATED 28.3.2013 HAD STATED THE DEMAND AS NIL, STATUTORY INTENT BEING TO PASS AN ORDER GIV ING EFFECT AND NONE OF THE AUTHORITIES BELOW HAD BEEN ABLE TO REFER TO THE STATUTORY PROVISION SUPPORTING ANY INTERIM PROC ESS OF ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 10 DEMAND TO A PLUS MINUS ACCOUNT. THE LD. COUNSEL F OR ASSESSEE FURTHER SUBMITTED THAT THE ISSUE IN DISPUT E WAS ANSWERED IN DETAIL BY TWO DIRECT DECISIONS OF THE H ON'BLE HIGH COURT AS UNDER: 1) CIT VS. CITY FINANCIAL CONSUMER FINANCE INDIA PVT. LTD. IN ITA NO 275/2015 DATED 17.7.2015 (DEL). 2) CLASSIC SHARE & STOCK BROKING SERVICES LTD. VS. ACIT, 216 TAXMAN 238 (BOM). 11. THE LD. COUNSEL FOR ASSESSEE FILED A BRIEF SYNO PSIS OF HIS SUBMISSIONS BEFORE US WHICH IS REPRODUCED HEREU NDER: A. ISSUE - ORDER OF ASSESSMENT DATED 23 RD MARCH 2014 IS BAD IN LAW IN AS MUCH AS AFTER HAVING PASSED AN ORD ER DATED 28 TH MARCH 2013 NO OTHER ORDER GIVING EFFECT TO ITAT OR DER COULD HAVE BEEN PASSED. B. FACTS - THESE ARE SECOND ROUND OF PROCEEDINGS. IT IS SUBMITTED THAT PURSUANT TO ORDER DATED 27 TH FEBRUARY, 2013 PASSED IN ITA NO.590/CHD/2011 BY HON'BLE ITAT THE AO VIDE ORDER DATED 23 RD MARCH, 2013 (COPY ENCLOSED AT PAGE 32) ASSESSED THE TOTAL TAXABLE INCOME OF THE APPELLANT AT RS. NIL AND ALSO DETERMINE THE TAX AND INTEREST LIABILITY OF T HE APPELLANT AT RS. NIL. HOWEVER, THEREAFTER VIDE NOTICE U/S 143(2) DATED 18 TH OCTOBER, 2013 (COPY ENCLOSED AT PAGE THE AO DIRECTED APPELLANT'S ATTENDANCE IN HIS OFFICE ON 4 TH NOVEMBER, 2013. SINCE THE PROCEEDINGS RE-INITIATED B Y THE AO VIDE NOTICE U/S 143(2) WAS WITHOUT PROPER JURISD ICTION INASMUCH AS EFFECT TO HON'BLE ITAT'S DIRECTIONS HAD ALREADY BEEN GIVEN BY THE AO EARLIER VIDE ORDER DATED 23 RD MARCH, 2013, VIDE LETTER DATED 2 ND NOVEMBER, 2013 (COPY ENCLOSED AT PAGE 33) THE APPELLANT RAISED OBJECTIONS. THEREAFTER VIDE NOTICE U/S 143(2) DATED 11 TH NOVEMBER, 2013 (COPY ENCLOSED AT PAGE 35) THE AO IMPLIEDLY REJECTED THE OBJECTIONS RAISED BY A PPELLANT AND DIRECTED IT TO PARTICIPATE IN PROCEEDINGS. PURS UANT THERETO ORDER DATED 28 TH MARCH 2014 HAS BEEN PASSED BY AO. C. STATUS OF DOCUMENT DATED 28 TH MARCH 2013 ENCLOSED AT PAGE 32 OF PB - IT IS APPARENT FROM PAGE 32 OF PB THAT DOCUMENT DATED 23 RD MARCH 2013 IS AN ASSESSMENT ORDER GIVING EFFECT TO ORDER PASSED BY HON'BLE ITAT. ALL INGREDIENTS OF ASSESSMENT ORDER ARE PRESENT:- I.E (A) NAME OF ASSESS EE, (B) DATE OF ORDER, (C) ASSESSED INCOME U/S 143(3)/147, (D) INCOME TO BE ASSESSED PURSUANT TO ORDER OF HON'BLE ITAT, ( E) FINAL TAX DEMAND,(F) TAX DEMAND PAYABLE, (G) COPY TO ASSESSEE . ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 11 AO ACCEPTS THAT DOCUMENT AT PAGE 32 OF PB IS ISSUED / PASSED GIVING EFFECT TO ORDER PASSED BY HON'BLE ITAT. KIND REF ERENCE IN THIS REGARD IS INVITED TO: (I) REMAND REPORT DATED 07 TH SEPTEMBER 2016 FILED BY AO BEFORE CIT(A).. PGS 54-55 OF PB, PARAS 3 AND 5 (II) REPORT DATED 14 TH AUGUST 2018 (INADVERTENTLY TYPED AS 14 TH AUGUST 2017) FILED BY A.O. BEFORE HON'BLE ITAT - COPY FILED BY LD CIT(DR) DURING COURSE OF HEARING ON 20 TH AUGUST 2018 REBUTTAL OF ARGUMENTS TAKEN BY LD CIT(A): - IT IS APPARENT THAT SINCE DEMAND PAYABLE IS 'NIL' T HERE IS NO REQUIREMENT TO ISSUE NOTICE U/S 156. - FACT THAT DOCUMENT AT PAGE 32 IS TITLED AS 'INCOME TAX COMPUTATION' WILL CHANGE ITS STATUS AS NOT BEING AN ORDER OF ASSESSMENT. KEY INGREDIENTS OF AN ASSESSME NT ORDER ARE DETERMINATION OF 'TOTAL INCOME' AND 'TAX PAYABLE'. BOTH THESE INGREDIENTS PRESENT. 'INCOME TAX COMPUTATION' SIGNED BY AO IS ALSO PART OF AN ORDER OF ASSESSMENT. {REFERENCE KALYANKUMAR RAY VS CIT REPORTED IN 191 ITR 634(SC) COPY ENCLOSED AT PAGES 85 TO 94 OF PB} - DEMAND AFTER ITAT ORDER DOES NOT SURVIVE THAT IS WH Y AO VIDE ORDER DATED 28 TH MARCH 2013 HAS STATED DEMAND PAYABLE AS 'NIL'. STATUTORY INTENT IS TO PASS AN ORDER GIVING EFFECT. NEITHER LOWER AUTHORITIES NOR LD CIT(DR) HAS BEEN ABLE TO REFER ANY STATUTORY PROVISION WHICH WOULD SUPPORT ANY INTERIM PROCESSING OF DEMAND TO A '+/- ACCOUNT'. IT IS SUBMITTED THAT IN DOCUMENT ENCLOSED AT PAGE 3 2 OF PB THE AO CLEARLY STATES THAT 'INCOME ASSESSED AFTER CIT(A )'S ORDER IN APPEAL NO. 203/08-09 DATED 18.03.2011 & ITAT ORDER IN IT A NO. 590/CHD/2011 DATED 27.02.2013' IS 'NIL'. THEREFORE CLEARLY 'IN SUBSTANCE AND EFFECT' THE DOCUMENT DATED 28 TH MARCH 2013 IS AN ORDER PASSED GIVING EFFECT TO ORDER PASSED BY HON'BLE ITAT AS 'IT IS IN CONFORMITY WITH OR ACCORDING TO THE INTENT AND PURPOSE OF THE ACT'. (REFER SECTION 292B} D. IT IS TRITE LAW THAT EVEN AN ORDER GIVING APP EAL EFFECT IS ALSO AN ORDER OF ASSESSMENT - REFERENCE IN THIS REGARD IS INVITED TO DECISION OF HON 'BLE BOMBAY HIGH COURT IN CASE OF CALTEX OIL REFINING (INDIA) L TD REPORTED IN 202 ITR 375(BOM) WHEREIN IT IS HELD AS UNDER: '..SO FAR AS THE FIRST SUBMISSION IS CONCERNED WHIC H RELATES TO THE NATURE OF AN ORDER PASSED BY THE ITO IN CONSEQU ENCE OF ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 12 ORDERS OF THE APPELLATE AUTHORITIES WITH A VIEW TO GIVING EFFECT TO THE DIRECTIONS CONTAINED THEREIN, IT IS DIFFICULT TO HOLD THAT SUCH AN ORDER IS AN ADMINISTRATIVE ORDER. THE POWER OF THE ITO IS TO MAKE ASSESSMENT UNDER SECTION 143 OR 144. IT IS THA T ASSESSMENT WHICH IS THE SUBJECT-MATTER OF APPEAL. THE APPELLATE AUTHORITY, ON AN APPEAL AGAINST AN ORDER OF ASSESSM ENT, HAS POWER TO CONFIRM, REDUCE, ENHANCE OR ANNUL THE ASSESS MENT OR TO SET ASIDE THE ASSESSMENT AND REFER THE CASE BACK TO THE ITO FOR MAKING A FRESH ASSESSMENT IN ACCORDANCE WITH THE DI RECTIONS GIVEN BY SUCH AUTHORITY (SECTION 251). EVIDENTLY THE EFFECT OF AN APPELLATE ORDER IS THAT THE ASSESSMENT EITHER STAND S CONFIRMED, REDUCED OR ENHANCED OR IT STANDS ANNULLED OR SET AS IDE. IN CASE OF CONFIRMATION, REDUCTION OR ENHANCEMENT THE ORIGINA L ORDER OF ASSESSMENT STANDS MODIFIED TO THE EXTENT OF THE DIRECTIONS GIVEN BY THE APPELLATE AUTHORITY. IN THE CASE OF ANN ULMENT THE ORDER BECOMES NON EST. IN CASE AN ORDER IS SET ASID E, THE AUTHORITY HAS TO START THE ENTIRE PROCESS AFRESH AN D MAKE A FRESH ORDER OF ASSESSMENT COMPLYING WITH THE DIRECTI ONS GIVEN BY THE APPELLATE AUTHORITY. IT IS, THUS, CLEAR THAT WHAT REMAINS AS A FINAL ORDER AFTER GIVING EFFECT TO THE ORDERS OF THE APPELLATE AUTHORITIES IS AN ORDER OF ASSESSM ENT UNDER SECTION 143 OR 144. IT CANNOT BE ANYTHING ELS E. 11. THIS ASPECT OF THE MATTER ALSO CAME TO BE CONSID ERED BY THE CALCUTTA HIGH COURT IN KOOKA SIDHWA & CO. V. CIT [1964] 54ITR 54 IN WHICH IT WAS HELD THAT WHERE, PURSUANT TO THE DIRECTIONS OF THE TRIBUNAL IN AN ORDER UNDER SECTIO N 33(4) OF THE INDIAN INCOME-TAX ACT, 1922 (SECTION 254 OF THE 196 1 ACT) TO REVISE AND AMEND THE ASSESSMENT MADE BY THE ITO, TH E ITO REVISES THE ASSESSMENT, THE ORDER PASSED BY THE ITO PARTAKES OF THE CHARACTER OF A FRESH ASSESSMENT ORDER AND IS RE FERABLE ONLY TO SECTION 23 OF THE 1922 ACT (CORRESPONDING TO SECTIONS 143 AND 144 OF THE 1961 ACT). AN APPEAL WOULD, THEREFORE, LIE U NDER SECTION 30 OF THE ACT (SECTION 246 OF THE 1961 ACT) TO THE AAC AGAINST AN ORDER OF THE ITO AMENDING OR REVISING AN ASSESSMENT PURSUANT TO THE DIRECTIONS OF THE TRIBUNAL UNDER SECTION 33( 4) (SECTION 254 OF THE 1961 ACT). IT WAS OBSERVED: '...THE INCOME-TAX OFFICER'S DUTY TO ASSESS THE TOT AL INCOME OF THE ASSESSEE AND TO DETERMINE THE SUM PAYABLE BY HIM ON THE BASIS OF THE RETURN UNDER SECTION 23 OF THE ACT IS THE WHOLE PROCESS OF ASSESSMENT WHICH MAY END WITH HIS ORDER OR MAY BE REVISED BY THE HIGHER APPELLATE AUTHORITIES INCLUDING THE APPELLATE ASSISTANT COMMISSIONER AND THE TRIBUNAL RECOGNISED BY THE INCOME - TAX ACT. IF, THEREFORE, SUCH HIGHER APPELLATE AUTHO RITIES SUCH AS THE APPELLATE ASSISTANT COMMISSIONER OR THE TRIBUNAL DIRECTS OR ORDERS HIM TO DO SOMETHING AGAI N WITH REGARD TO THE ASSESSMENT HE HAS ALREADY MADE AND TH AT BY WAY OF REVISION OR AMENDMENT, THE INCOME-TAX OFFI CER MUST BE HELD TO BE STILL UNDER SECTION 23 OF THE AC T ON THE PROCESS OF ASSESSING THE TOTAL INCOME OF THE ASSESSE E AND DETERMINING THE SUM PAYABLE ON THE BASIS OF THE RETURN ALREADY FILED BY HIM. NO OTHER CONSTRUCTION OR INTERPRETATION OF SECTION 23 OF THE ACT SEEMS TO ME TO BE SENSIBLE OR CONSISTENT WITH THE SCHEME OF THE ACT.' (P. 65) ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 13 THIS VIEW IS ALSO FULLY SUPPORTED BY A DECISION OF THE SUPREME COURT IN GARIKAPATI VEERAYA V. N. SUBBIAH CHOUDHRY AIR 1957 SC 540 WHERE IT WAS OBSERVED: 'THE LEGAL PURSUIT OF A REMEDY, SUIT, APPEAL AND SE COND APPEAL ARE REALLY BUT STEPS IN A SERIES OF PROCEEDI NGS ALL CONNECTED BY AN INTRINSIC UNITY AND ARE TO BE REGAR DED AS ONE LEGAL PROCEEDING.' (P. 540) THIS VIEW WAS REITERATED RECENTLY BY THE SUPREME CO URT IN UMAJI KESHAO MESHRAM V. SMT. RADHIKABAI AIR 1986 SC 1272 WHERE IT WAS OBSERVED THAT AN APPEAL IS NOT A FRESH PROCEEDING BUT MERELY A CONTINUATION OF THE ORIGINAL PROCEEDINGS. 12. IN THE LIGHT OF THESE DECISIONS AND FOR THE REASONS GIVEN ABOVE, WE ARE OF THE OPINION THAT THE IMPUGNED ORDER OF ASSESSMENT PASSED BY THE ITO PURSUANT TO T HE DIRECTIONS OF THE APPELLATE AUTHORITIES WITH A VIEW TO GIVING EFFECT TO THE DIRECTIONS CONTAINED THEREIN I S AN ORDER OF ASSESSMENT WITHIN THE MEANING OF SECTION 1 43 OR SECTION 144 OF THE ACT AND AN APPEAL LIES UNDER SECTION 246(C) AGAINST SUCH AN ORDER.' E. DIRECT PRECEDENTS ON THE ISSUE - IT IS SUBMITTED THAT ISSUE IN DISPUTE IS ANSWERED IN DETAIL BY TWO DIRECT DECI SIONS OF HON'BLE HIGH COURTS. THERE CANNOT BE TWO ASSESSMEN T ORDERS FOR ASSESSING THE SAME INCOME IN THE SAME AS SESSMENT YEAR ON THE SAME PERSON. REFERENCES: * HON'BLE DELHI HIGH COURT DECISION IN CASE OF CIT VS. CITY FINANCIAL CONSUMER FINANCE INDIA PVT. LTD. VIDE ORDE R DATED 17 TH JULY, 2015 IN ITA NO.275/2015 COPY ENCLOSED AT PAGES 64 TO 72 OF PB - RELEVANT CONCLUSIONS AT PAGES 68 TO 71, PARAS 8 TO 12. * HON'BLE BOMBAY HIGH COURT DECISION IN CASE OF CLASSI C SHARE & STOCK BROKING SERVICES LTD VS ACIT REPORTED IN 216 TAXMAN 238(BOM) COPY ENCLOSED AT PAGES 95 TO 98 OF PB - RELEVANT CONCLUSIONS AT PAGE 97, PARA 6. 12. WE ARE NOT CONVINCED WITH THE ARGUMENTS OF THE LD. COUNSEL FOR ASSESSEE THAT THE DOCUMENTS DATED 28.3. 2013 WAS AN ORDER PASSED BY THE A.O. FOR THE PURPOSE OF THIS ACT AND, THEREFORE, THE SUBSEQUENT ORDER PASSED DATED 2 8.3.2004 AGAINST WHICH THE ASSESSEE HAS COME UP IN APPEAL BE FORE THE FIRST APPELLATE AUTHORITY AND EVEN BEFORE US, IS NU LLITY OR IS VOID. GOING THROUGH THE CONTENTS OF THE DOCUMENTS F ILED BEFORE US AND THE ARGUMENTS MADE BY BOTH THE PARTIE S WE ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 14 AGREE WITH THE LD.CIT(A) THAT THIS CONTENTION RAISE D BY THE ASSESSEE IS NOT ONLY MISPLACED BUT ALSO EGREGIOUSLY MISLEADING AND WE SHALL EXPLAIN IN DETAIL THE REASO NING FOR THE SAME. 13. TO DECIDE WHETHER THE DOCUMENT IS AN ASSESSMENT ORDER OR NOT IT WOULD BE NECESSARY TO LOOK INTO THE ACT A ND UNDERSTAND WHAT IT STIPULATES TO BE AN ASSESSMENT O RDER. SECTION 143(3) OF THE ACT STATES THAT THE A.O. SHAL L BY AN ORDER IN WRITING MAKE AN ASSESSMENT OF THE TOTAL IN COME OR LOSS OF THE ASSESSEE AND DETERMINE THE SAME PAYABLE BY HIM OR REFUND OF ANY AMOUNT DUE TO HIM ON THE BASIS OF SUCH ASSESSMENT. THE PROVISIONS OF THE RELEVANT SECTION ARE BEING REPRODUCED HEREUNDER FOR CLARITY: 143[(3) [ON THE DAY SPECIFIED IN THE NOTICE ISSUED UNDER] SUB-SECTION (2), OR AS SOON AFTERWARDS AS MAY BE, AFTER HEARING SUCH EVIDENCE AS THE ASSESSEE MAY PRODUCE AND SUCH OTHER EVIDENCE AS THE ASSESSING OFFICER MAY REQUIRE ON SPECIFIED POINTS, AND AFTER TAKING INTO ACCOUNT ALL RELEVANT MATERIAL WHICH HE HAS GATHERED, THE ASSESSING OFFICER SHALL, BY AN ORDER IN WRITING, MAKE AN ASSESSMENT OF THE TOTAL INCOME OR LOSS OF THE ASSESSEE, AND DETERMINE THE SUM PAYABLE BY HIM OR REFUND OF ANY AMOUNT DUE TO HIM ON THE BASIS OF SUCH ASSESSMENT:] 14. IT IS EVIDENT FROM THE ABOVE THAT AN ASSESSMENT ORDER NECESSARILY HAS TWO COMPONENTS; I) DEALING WITH THE ASSESSMENT OF THE TOTAL INCOME OR LOSS OF THE ASSESSEE AND II) DETERMINING THE TAX PAYABLE BY HIM OR THE REFUN D DUE TO HIM. 15. THE HON'BLE APEX COURT IN THE CASE OF KALYAN KU MAR RAY (SUPRA) HAS, WHILE INTERPRETING THIS SUB SECTIO N, HELD ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 15 THAT ASSESSMENT IS ONE INTEGRATED PROCESS INVOLVIN G NOT ONLY THE ASSESSMENT OF THE TOTAL INCOME BUT ALSO THE DETERMINATION OF THE TAX AND THAT THE LATER IS AS C RUCIAL FOR THE ASSESSEE AS THE FORMER. THE HON'BLE APEX COURT HELD THAT THE INCOME TAX OFFICER HAS TO DETERMINE BY AN ORDER IN WRITING NOT ONLY THE TOTAL INCOME BUT ALSO THE NET SUM WHICH WILL BE PAYABLE BY THE ASSESSEE FOR THE ASSESSMENT YEAR IN QUESTION. THE RELEVANT FINDINGS OF THE HON'BLE APEX COURT IN THIS REGARD ARE AS UNDER: SRI S. PADMANABHAN, LEARNED COUNSEL FOR THE PETITIONER, INVITED ATTENTION TO THE LANGUAGE OF SECTION 143(3) OF T HE ACT WHICH MANDATES THAT THE I.T.O. 'SHALL, BY AN ORDER IN WRIT ING, MAKE AN ASSESSMENT OF THE TOTAL INCOME OR LOSS OF THE ASSESSEE, AND DETERMINE THE SUM PAYABLE BY HIM ON THE BAS IS OF SUCH ASSESSMENT'. THE DEPARTMENT POINTING TO THE PLACEMENT OF A COMMA AFTER THE WORD 'ASSESSEE' SUGG ESTED BEFORE THE TRIBUNAL THAT AN ORDER IN WRITING IS REQUIR ED ONLY FOR THE ASSESSMENT OF THE INCOME OR LOSS AND THAT THE DETERMINATION OF THE SUM PAYABLE CAN BE AN INDEPENDE NT PROCESS NOT NECESSARILY IN WRITING. THE SUGGESTION SE EMS PLAUSIBLE BUT IS NOT REALLY TENABLE. AS POINTED OUT FO R THE PETITIONER, JUDICIAL DECISIONS UNDER THE 1922 ACT AS WE LL AS THE PRESENT ACT HAVE READ BOTH CLAUSES TOGETHER. ASSESSM ENT IS ONE INTEGRATED PROCESS INVOLVING NOT ONLY THE ASSESS MENT OF THE TOTAL INCOME BUT ALSO THE DETERMINATION OF THE TA X. THE LATTER IS AS CRUCIAL FOR THE ASSESSEE AS THE FORMER. S ECTION 144, WHICH ALSO DESCRIBES THE SAME PROCESS, MAKES NO DISTI NCTION AS SUGGESTED. IT WILL NOT BE THEREFORE CORRECT TO REA D THE PROVISION, AS LEAVING UNDEFINED THE PROCESS OF DETERM INATION OF THE NET SUM PAYABLE BY THE ASSESSEE. IN OUR OPINIO N, THEREFORE, LEARNED COUNSEL FOR THE PETITIONER IS RIGHT I N HIS SUBMISSION THAT THE INCOME TAX OFFICER HAS TO DETER MINE, BY AN ORDER IN WRITING, NOT ONLY THE TOTAL INCOME BUT ALSO THE NET SUM WHICH WILL BE PAYABLE BY THE ASSESSEE FOR THE ASSESSMENT YEAR IN QUESTION AND THAT THE DEMAND NOT ICE UNDER SECTION 156 HAS TO BE ISSUED IN CONSEQUENCE OF SUCH AN ORDER. 16. HAVING SAID SO WHAT LOGICALLY FOLLOWS IS THAT T HE ASSESSMENT OF INCOME HAS TO NECESSARILY PRECEDE THE CALCULATION OF TAX PAYABLE. ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 16 IN THE PRESENT CASE THE DOCUMENT BEFORE US IS HEADE D INCOME TAX COMPUTATION. THEREFORE, IT IS ONLY THE SECOND COMPONENT OF THE ASSESSMENT ORDER. NOW THERE NECESS ARILY HAS TO BE A ASSESSMENT OF INCOME PRECEDING IT. THIS CAN BE EITHER IN THE ORDER OF THE I.T.A.T. WHERE THE INCOM E IS ASSESSED GIVING ALL FINDINGS WITH REGARD TO THE SAM E, LEAVING THE COMPUTATION OF TAX TO THE A.O. OR IF NOT SO THE RE HAS TO BE A SEPARATE ORDER PASSED BY THE A.O. ASSESSING TH E INCOME. ON GOING THROUGH THE CONTENTS OF THE ORDER OF THE I .T.A.T. WE FIND THAT THERE IS NO FINDING VIS--VIS THE COMPUTA TION OF TOTAL INCOME OF THE ASSESSEE. THE I.T.A.T. IN ITS D IRECTIONS HAS ASKED THE A.O. TO VERIFY WHETHER ANY DEDUCTION ON ACCOUNT OF INTEREST TOWARDS BANK WAS CLAIMED AND AL LOWED AND THEN DECIDE THE ISSUE IN ACCORDANCE WITH LAW. I N FACT, WE FIND THAT THE I.T.A.T. HAD CATEGORICALLY MENTIONED THAT THERE IS NO FINDING TO THIS EFFECT IN THE ORDERS OF THE A .O. OR EVEN THE APPELLATE AUTHORITIES. THIS IS CLEAR FROM PARA 25 OF THE ORDER OF THE I.T.A.T. GIVING SUCH A DIRECTION AS UN DER: 25. AS FAR AS TAXABILITY OF THIS AMOUNT U/S 41 IS CONCERNED, IT WAS CONTENDED THAT THE ASSESSEE HAS N OT CLAIMED DEDUCTION ON ACCOUNT OF INTEREST AND THE SA ME HAS NOT BEEN ALLOWED BY THE DEPARTMENT. HOWEVER, PERUSAL OF THE ASSESSMENT ORDER OR APPELLATE ORDER DO NOT SHOW THAT THERE IS A FINDING TO THIS EFFECT. THEREFORE, WE REMIT THIS ISSUE BACK TO THE FILE OF ASSESSING OFFICER WITH THE DIRECTION TO VERIFY WHET HER ANY DEDUCTION ON ACCOUNT OF INTEREST TOWARDS BANK W AS CLAIMED AND ALLOWED AND THEN DECIDE; THE ISSUE IN ACCORDANCE WITH LAW. 17. THE I.T.A.T. HAD ALSO DIRECTED THE A.O. TO NOT ALLOW SET OFF OF UNABSORBED DEPRECIATION WHICH IS OUTSIDE THE BLOCK OF ASSESSMENT YEARS 1997-98 TO 2001-02. NOW CONSIDERIN G THE DIRECTIONS GIVEN IN PARA 25 OF THE ORDER OF THE I.T .A.T. IT IS ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 17 CLEAR THAT EVEN THE TOTAL INCOME HAS NOT BEEN ASSES SED OR TAX HAS BEEN COMPUTED BY THE I.T.A.T. BUT HAS BEEN LEFT TO THE A.O. TO DO IN THE SET ASIDE PROCEEDINGS. ALSO ADMIT TEDLY, NO ORDER HAS BEEN PASSED BY THE A.O. ASSESSING THE ASS ESSED INCOME OF THE ASSESSEE, PRECEDING THIS COMPUTATION OF INCOME TAX. THEREFORE, FOR ALL PURPOSES THIS INCOME TAX COMPUTATION DOCUMENT CANNOT BE TREATED AS AN ORDER PASSED BY AN A.O. GIVING EFFECT TO THE DIRECTIONS OF THE I .T.A.T. WE DO NOT FIND ANY MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR ASSESSEE, THEREFORE, THAT ALL THE INGREDIENTS OF TH E ASSESSMENT ORDER ARE PRESENT IN IT, BECAUSE IT IS O NLY AN INCOME TAX COMPUTATION AND NOT AN ORDER PASSED U/S 143(3) R.W.S. 254 OF THE ACT AND AS STATED ABOVE, A MERE INCOME TAX COMPUTATION SHEET, DESPITE CONTAINING OTHER INGREDI ENTS OF AN ASSESSMENT ORDER CANNOT BE TREATED AS AN ASSESSM ENT ORDER UNLESS AND UNTIL IT IS PRECEDED BY AN ORDER C OMPUTING THE INCOME OF THE ASSESSEE. THAT NO SEPARATE ORDER HAS BEEN PASSED ASSESSING THE TAXABLE INCOME OF THE ASSESSEE CONSEQUENT TO THE DIRECTIONS OF THE I.T.A.T., IS EV IDENT FROM THE FACT THAT THE SAID DOCUMENT MENTIONS THE INCOME ASSESSED BOTH AFTER THE CIT(A) ORDER AND I.T.A.T. S ORDER. IF IT WOULD AN ASSESSMENT ORDER PASSED IN CONSEQUENCE TO THE DIRECTIONS OF THE I.T.A.T., THERE WAS NO REASON AT ALL TO MENTION INCOME ASSESSED AFTER THE CIT(A)S ORDER. I N FACT, WE FIND MERIT IN THE CONTENTION OF THE REVENUE THAT TH IS WAS ONLY A COMPUTATION SHEET PENDING VERIFICATION OF TH E MATERIAL FACTS AS DIRECTED BY THE I.T.A.T. AND WHICH CONSTIT UTED PART OF THE PROCEDURE FOLLOWED BY THE DEPARTMENT IN EVER Y SUCH ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 18 CASE. IT WAS POINTED OUT TO US THAT ON RECEIVING OR DERS FROM THE APPELLATE AUTHORITIES THE A.OS ARE DIRECTED TO PASS ORDERS GIVING EFFECT TO THE APPELLATE ORDERS RAISING DEMAN D OR ISSUING REFUND TO THE ASSESSEE IMMEDIATELY THEREAFT ER AND IN THIS PROCESS WHERE CERTAIN ISSUES ARE SET ASIDE FOR VERIFICATION TO THE A.O, A COMPUTATION OF TAX IS P REPARED WHEREIN DEMAND IS RAISED ON ACCOUNT OF ADDITIONS MA DE, REDUCED ON ACCOUNT OF RELIEF GRANTED AND ALSO REDUC ED ON ACCOUNT OF ISSUES WHICH ARE SET ASIDE FOR VERIFICAT ION SINCE ON ACCOUNT OF THE SETTING ASIDE ORDER OF THE A.O., THE ORDER NO LONGER SURVIVES AND SO ALSO THE DEMAND AND IT IS ONLY SUBSEQUENTLY WHEN THE SET ASIDE ISSUE IS DECIDED TH AT A FRESH DEMAND IS RAISED ON THE ASSESSEE. IT WAS POI NTED OUT THAT SUCH A PROCEDURE IS FOLLOWED TO UPDATE THE REC ORD OF TAX RECOVERIES SO THAT TAXES DUE AFTER APPEALS ARE EFF ECTIVELY COLLECTED AND IN CASES WHERE THE DEMAND IN NULLIFIE D, EITHER ON ACCOUNT OF DELETION OF ADDITIONS MADE OR WHERE M ATTERS ARE SET ASIDE AND THE ORIGINAL ORDER DOES NOT SURVI VE, THIS PROCEDURE HELPS IN AVOIDING NOTICES OF RECOVERY OF DEMAND BEING UNNECESSARILY ISSUED. WE ALSO DO NOT FIND AN Y MERIT IN THE CONTENTION OF THE LD. COUNSEL FOR ASSESSEE THAT EVEN THE A.O. HAD ADMITTED TO THIS FACT THAT THE DOCUMENT WA S AN APPEAL EFFECT ORDER. IT NEED NOT BE POINTED OUT BY US, SINCE IT IS ABUNDANTLY CLEAR, THAT THE NATURE OF THE DOCUME NT IS NOT DETERMINED BY THE AVERMENTS OF THE PERSON PREPARING IT BUT IS TO BE DETERMINED FROM THE CONTENTS OF THE SAME. EVEN OTHERWISE THE LD. COUNSEL FOR ASSESSEE IS MERELY TR YING TO READ THE AVERMENTS OF THE A.O. IN THIS REGARD OUT O F CONTEXT. ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 19 WHAT THE A.O. HAS STATED IN HIS REMAND REPORT IS ON LY IN CONSONANCE TO WHAT THE DEPARTMENT HAS BEEN PLEADING ALL ALONG THAT SUCH DOCUMENTS ARE TO BE PREPARED ON REC EIVING THE APPELLATE ORDERS AND IS BEING INCORRECTLY READ AS AN ORDER GIVING EFFECT TO THE DIRECTIONS OF THE I.T.A. T. THE RELIANCE PLACED BY THE LD. COUNSEL FOR ASSESSEE ON THE DECISION OF THE HON'BLE BOMBAY HIGH COURT IN THE CA SE OF CALTEX OIL REFINING (INDIA) LTD. (SUPRA) IS, WE FIN D, OF NO ASSISTANCE TO THE ASSESSEE SINCE IT DEALT WITH THE ISSUE OF WHETHER AN ORDER GIVING EFFECT TO THE ORDERS OF APP ELLATE AUTHORITIES COULD BE TREATED AS AN ASSESSMENT ORDER . IN THE PRESENT CASE SINCE WE HAVE HELD THAT THE IMPUGNED D OCUMENT WAS NOT AN ORDER AT ALL GIVING EFFECT TO THE DIRECT IONS OF THE I.T.A.T., THE SAID DECISION IS OF NO HELP TO THE AS SESSEE. ALSO, THE DECISIONS RELIED UPON BY THE LD. COUNSEL FOR AS SESSEE OF THE HON'BLE HIGH COURT IN THE CASE OF CITI FINANCIA L CONSUMER FINANCE INDIA PVT. LTD. (SUPRA) AND OF THE HON'BLE BOMBAY HIGH COURT IN THE CASE OF CLASSIC SHARE & BR OKING SERVICES LTD. (SUPRA) IS ALSO OF NO ASSISTANCE TO T HE ASSESSEE SINCE THEY ARE CLEARLY DISTINGUISHABLE ON FACTS. IN BOTH THE SAID CASES THOUGH THE ISSUE WAS WHETHER TWO ASSESSM ENT ORDERS COULD BE PASSED BY AN A.O., THERE WAS A CATE GORICAL FINDING OF FACT THAT THE FIRST WAS AN ORDER PASSED U/S 254/143(3) OF THE ACT WHICH IS ABSENT IN THE PRESEN T CASE. THE DOCUMENT IN THE PRESENT CASE IS HEADED INCOME T AX COMPUTATION WHILE IN THOSE CASES THE DOCUMENTS WERE HEADED OR PASSED U/S 254/143(3) OF THE ACT. THEREFO RE, THE SAID ORDERS ARE AGAIN OF NO ASSISTANCE OF THE ASSES SEE. IN ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 20 VIEW OF THE ABOVE WE UPHOLD THE ORDER OF THE LD.CIT (A) DISMISSING THE CLAIM OF THE ASSESSEE THAT THE IMPUG NED ORDER OR SO SECOND ASSESSMENT ORDER ARE HENCE VOID. THE APPEAL OF THE ASSESSEE IS, THEREFORE, DISMISSE D. ITA NO.446/CHD/2018(REVENUES APPEAL) : 18. WE SHALL NOW BE TAKING UP THE APPEAL OF THE REV ENUE. GROUNDS OF APPEAL RAISED BY THE REVENUE ARE AS UNDE R: 1. WHETHER IN THE FACTS AND CIRCUMSTANCES OF THE C ASE, THE LD. CIT(A), PATIALA IS LEGALLY CORRECT IN ADJUDICATING BY SETTING ASIDE THE ORDER OF THE ASSESSING OFFICER PASSED U/S 143(3)/254 OF THE INCOME TAX ACT, 1961 WHEN THE ASSESSEE FAILED TO SUBSTANTIATE ITS CLAIM WHICH HAS BEE N PROVIDED IN BOOKS OF ACCOUNTS AND NOT CLAIMED IN THE RETURN OF INCOME (BY THE ASSESSEE) BY NOT PRODUCING THE BOOK S OF ACCOUNTS BEFORE THE ASSESSING OFFICER DURING THE RE- ASSESSMENT PROCEEDINGS (GIVING EFFECT TO THE ORDER OF HON'BLE ITAT). 2. IT IS PRAYED THAT THE ORDER OF LD. CIT(A) BE SET-AS IDE AND THAT OF THE ASSESSING OFFICER BE RESTORED. 3. THE APPELLANT CRAVES LEAVE TO ADD OR AMEND ANY GROU NDS OF APPEAL BEFORE THE APPEAL IS HEARD AND FINALLY DISPOSED O FF. 19. THE REVENUE IN THE PRESENT CASE HAS CHALLENGED THE DIRECTIONS OF THE CIT(A) SETTING ASIDE THE ORDER OF THE A.O. AND DIRECTING HIM TO COMPLY WITH THE DIRECTIONS OF THE ITAT. THE LD. DR HAS CONTENDED THAT SINCE THE ASSESSEE FA ILED TO SUBSTANTIATE ITS CLAIM BY NOT PRODUCING THE RELEVAN T RECORDS BEFORE THE A.O., THERE WAS NO QUESTION OF SETTING A SIDE THE ISSUE AGAIN TO THE A.O. THE LD. DR ALSO CONTENDED T HAT THE CIT(A) HAD NO POWER U/S 251(1) TO SET ASIDE THE ASS ESSMENT ORDER AND, THEREFORE, THE IMPUGNED DIRECTIONS OF TH E CIT(A) WAS BAD IN LAW. THE LD. COUNSEL FOR ASSESSEE, ON TH E OTHER ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 21 HAND, RELIED UPON THE FINDINGS OF THE CIT(A) AT PAR AS 13 TO 16 OF THE ORDER AS UNDER: 13. THE OTHER GROUND OF APPEAL CHALLENGES THE ACTION OF THE AO IN IGNORING THE DOCUMENTS ADDUCED BEFORE HIM BY THE APPELLANT IN TERMS OF PROFIT AND LOSS ACCOUNT, COMPUTATION OF TOTAL INCOME, ASSESSMENT ORDERS AND APPELLATE ORDERS FOR A.YS. 1985-86 TO 2000-01, WHICH WOULD HAVE CLEARLY INDICATED THAT THE APPELLANT COMPANY HAD NEITHER CLAIMED NOR ALLOWED ANY DEDUCTION ON ACCOUNT OF INTEREST PAYABLE TO PUNJAB & SINDH BANK IN EARLIER YEARS SO THAT THE REMISSION OF LIABILITY TO THAT EFFECT COULD NOT BE BROUGHT TO TA X BY INVOKING THE PROVISIONS OF SECTION 41 (1) OF THE AC T, AS DIRECTED BY THE HON'BLE TRIBUNAL. IT WAS FURTHER STAT ED THAT THE APPELLANT HAD DILIGENTLY FURNISHED BEFORE THE AO, IN THE REMAND PROCEEDINGS, A CHART OF THE CUMULATIVE UNABSORBED DEPRECIATION ALLOWANCE FOR A.YS. 1979-80 TO 1996-97 ALONG WITH COPIES OF ASSESSMENT AND APPELLATE ORDERS FOR THE SAID YEARS, EVIDENCING T HE WORKING OF CUMULATIVE DEPRECIATION ALLOWANCE COMPUTED IN THE CHART. 14. ON A VIGILANT PERUSAL OF THE AFORESAID SUBMISSIONS AND DETAILS, IT BECOMES EVIDENT THAT THE ASSESSING OFFIC ER HAS BRAZENLY FAILED TO FOLLOW THE DIRECTIONS OF THE HON'BLE TRIBUNAL QUA THE VERIFICATION OF THE APPELLANT'S CLA IM OR ALLOWANCE THEREOF IN RESPECT OF INTEREST ACCRUING ON T HE BANK LOANS IN THE YEARS EARLIER THAN THE ASSESSMENT YEAR UNDER CONSIDERATION SO AS TO DECIDE ON THE TAXABILITY OF REMISSION OF LIABILITY TO THE EXTENT OF RS.2,24,34,509/- PURSUANT TO THE 'ONE-TIME SETTLEMENT' WITH THE BANK. FOR SUCH VERIFICATION, T HE AO ONLY NEEDED TO CAREFULLY SCAN THE PROFIT AND LOS S ACCOUNT, COMPUTATION OF TOTAL INCOME, ASSESSMENT ORDERS AND THE APPELLATE ORDERS FOR THE EARLIER YEAR S, WHICH DOCUMENTS WERE RECONSTRUCTED AND DULY FURNISHED BEFORE THE AO. BESIDE, THE SAID DOCUMENTS MUST HAVE BEEN AVAILABLE ON THE RECORD OF THE DEPARTMENT SO A BE CONFIRMED ABOUT THE VERACITY OF THE DOCUMENTS PLACED BEFORE THE AO IN THE REMAND PROCEEDINGS, THE AO BEING THE CUSTODIAN OF ASSESSMENT RECORDS. FROM EVEN A CURSORY PERUSAL OF THE SAID DOCUMENTS ADDUCED IN THE APPELLATE PROCEEDINGS, THE CLAIM OF THE APPELLANT THAT SUCH INTEREST, THOUGH PROVIDED INTEREST HE BOOKS, WERE NEITHER CLAIMED NOR ALLOWED INTEREST EH EARLIER ASSESSMENT PROCEEDINGS OR IN THE TAX COMPUTATIONS ACCOMPANYING THE RETURN OF INCOME FOR THE EARLIER YEARS, SEEMS TO BE IN ORDER. THE ONLY ISSUE REMAINS THAT THE SAME HAVE NOT BEEN VERIFIED FROM THE DEPARTMENTAL RECORDS OR THE VERACITY OF SUCH ORD ERS HAVE NOT BEEN CHECKED BY THE AO AS PER THE DIRECTION S OF THE HON'BLE TRIBUNAL. SIMILARLY, CUMULATIVE ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 22 UNABSORBED DEPRECIATION COULD ONLY BE VERIFIED FROM T HE COPIES OF THE ASSESSMENT AND APPELLATE ORDERS FOR A.YS . 1979-80 TO 1996-97, WHICH WERE DULY PLACED BEFORE THE AO AT THE TIME OF EFFECTING ORDER UNDER SECTION 143 (3)/254 AS ALSO DURING THE REMAND PROCEEDINGS DIRECTED BY THIS APPELLATE AUTHORITY FOR THE FINALISATION OF THE INSTANT APPEAL. HOWEVER, THE AO IS SEEN TO HAVE BEEN STUBBORNLY REFUSING TO LOOK AT TH E RECORDS FOR SUCH VERIFICATION EVEN IN THE REMAND PROCEEDINGS DIRECTED BY THIS APPELLANT AUTHORITY. TH E ONLY REASON INTELLIGIBLE FOR SUCH AN ACT ON THE PART OF THE AO SEEMS TO BE TO OUST THE DECISION OF THE TRIBUN AL IN GIVING APPROPRIATE RELIEF TO THE APPELLANT. IT IS AL SO NOT UNDERSTOOD AS TO WHAT DOCUMENTS THE AO IS LOOKI NG FOR TO DISCHARGE HIS OBLIGATION OF FOLLOWING THE DIRE CTIONS OF THE HON'BLE TRIBUNAL, WHICH HAD ATTAINED FINALITY AS PER THE PROVISIONS OF SECTION 254 (4) AS THE PROPOSA L OF FILING APPEAL UNDER SECTION 260A BEFORE THE JURISDICTIONAL HIGH COURT AGAINST THE SUBJECT ORDER OF THE HON'BLE TRIBUNAL DATED 27/02/2013 WAS NOT APPROVED VIDE COMMUNICATION DATED 03/07/2013 FROM THE OFFICE OF THE THEN CCIT, CHANDIGARH. 15. CONSIDERING THE ENTIRETY OF THE CIRCUMSTANCES, IT IS HELD THAT THERE HAS BEEN AN ABJECT DISREGARD OF THE DIRECTIONS OF THE HON'BLE TRIBUNAL. SINCE THE AO HAS FAILED TO COMPLY WITH THE SPECIFIC DIRECTIONS, THE IMPUGNED ORDER CANNOT POSSIBLY SEE THE LIGHT OF THE DAY. WITHIN THE PHRASEOLOGY OF SECTION 251 (1) (A) OF THE ACT, THIS APPELLATE AUTHORITY IS LEFT WITH LITTLE SCO PE BUT TO ANNUL THE IMPUGNED ASSESSMENT. HOWEVER, IT IS FELT THAT AN ANNULMENT WOULD HAVE THE UNINTENDED CONSEQUENCE OF CLOSURE OF THE CASE AS NON EST OR VOID ABINITIO, WHICH WOULD BE UNFAIR TO THE DEPARTMENT. THE AO IS, HEREBY DIRECTED TO COMPLY WITH THE DIRECTIONS OF THE HON'BLE ITAT, CHANDIGARH VIZ VERIFY WHETHER THE APPELLANT COMPANY HAS CLAIMED DEDUCTION OF INTEREST , ACCRUED AND PROVIDED IN THE BOOKS, IN THE EARLIER YEARS. IF THE APPELLANT IS FOUND TO HAVE CLAIMED THE SAID DED UCTION IN THE EARLIER YEARS, THEN THE REMISSION OF LIABILITY SHALL BE TAXABLE AS PER THE PROVISIONS OF SECTION 41 (1) OF THE ACT AS BUSINESS INCOME. IF NOT, THERE SHALL NOT BE A CASE OF TAXABILITY OF THE SAID REMISSION. SIMILARLY, THE AO IS REQUIRED TO VERIFY THE CLAIM OF THE APPELLANT ABOUT THE CUMULATIVE UNABSORBED DEPRECIATION ALLOWANCE OF RS.3,86,91,993/- FOR THE ASSESSMENT YEARS OTHER THAN A.YS. 1997-98 TO 2001- 02. IF THE SAID CLAIM OF THE APPELLANT IS FOUND TO BE CORRECT ON VERIFICATIO N OF THE RECORDS, THE AO SHALL BE REQUIRED TO SET OFF SUCH A MOUNT, SHOULD THERE BE AN ASSESSED INCOME DURING THE YEAR UNDER CONSIDERATION. IT IS ORDERED ACCORDINGLY. 16. HOWEVER, BEFORE PARTING, IT IS NECESSARY TO SPELL O UT THE REASONS AS TO WHY THE AFORESAID DIRECTION TO THE AO SHOULD NOT BE CONSIDERED AS UNAUTHORISED IN VIEW OF THE AM ENDMENT OF SECTION 251(L)(A) BY THE FINANCE ACT, 2001, W.E. F. 1-6- ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 23 2001 WHICH OMMITTED THE WORDS 'OR HE MAY SET ASIDE THE ASSESSMENT AND REFER THE CASE BACK TO THE ASSESSING OFFICER FOR MAKING A FRESH ASSESSMENT IN ACCORDANCE WITH THE DIRECTIONS GIVEN, BY THE COMMISSIONER (APPEALS) AND AFTER MAKING SUCH FURTHER ENQUIRY AS MAY BE NECESSA RY, AND THE ASSESSING OFFICER SHALL THEREUPON PROCEED T O MAKE SUCH FRESH ASSESSMENT AND DETERMINE, WHERE NECESSAR Y, THE AMOUNT OF TAX PAYABLE ON THE BASIS OF SUCH FRES H ASSESSMENT'. THE SCOPE AND EFFECT OF THE AFORESAID OMISSION WAS ELABORATED BY THE DEPARTMENTAL CIRCULAR NO. 14 OF 2001 TO STATE THAT THE COMMISSIONER (A) MAY NOT SET ASID E THE ASSESSMENT AND REFER THE CASE BACK TO THE ASSESSING OFFICER FOR MAKING FRESH ASSESSMENT AND THAT THE COMMISSION ER (A) CONTINUES TO HAVE THE POWERS UNDER SECTION 250 OF M AKING FURTHER ENQUIRY, OR DIRECTING THE ASSESSING OFFICER TO MAKE FURTHER ENQUIRY AND REPORT THE RESULT OF THE SAME TO HIM, WHICH CAN BE MADE USE OF IN APPEALS NEEDING FURTHER ENQUIRY OR GATHERING OF ADDITIONAL FACTS OR EVIDENCE. THE INTENTION BEHIND THE SAID OMISSION WAS TO HELP BRINGING ABOUT AN EARLY FINALISATION TO THE ASSESSME NT AND TO AVOID PROLONGING THE PROCESS OF LITIGATION. IN EFFECT, WHAT WAS WITHDRAWN FROM THE POWERS OF THE CIT(A) WAS THE AUTHORITY TO ISSUE DIRECTIONS TO THE A O TO REFRAME THE ASSESSMENT IN A PARTICULAR MANNER AFTER CARRYING OUT THE ANALYSIS OR INVESTIGATION AS SUGGES TED BY HIM. THIS, HOWEVER, IN THE OPINION OF THIS APPEL LATE AUTHORITY DOES NOT EXCLUDE THE DIRECTION TO THE AO T O COMPLY WITH THE DIRECTIONS OF THE APPELLATE AUTHORITIE S SUPERIOR TO THE CIT(A). IN THE INSTANT CASE, THE ASSESSMENT HAS NOT BEEN SET ASIDE FOR MAKING FRESH ASSESSMENT BY THE AO AS PER THE DIRECTIONS OF THIS APPELLATE AUTHORITY. ON THE CONTRARY, SINCE THE ORDER OF ASSESSMENT EARLIER PASSED BY THE ASSESSING OFFICER MERGED WITH THE ORDERS PASSED BY THE HON'BLE ITAT, TH E AO WAS, THEREAFTER, DUTY BOUND TO CARRY OUT THE COMPLIANCE OF THE DIRECTIONS OF THE ITAT. SINCE THE AO HAS FAILED TO DO THE SAME, VIDE THE INSTANT APPELLATE ORDER, HE HAS BEEN DIRECTED TO CARRY OUT THE COMPLIANCE OF THE ORDER OF THE ITAT THAT HAD BECOME FINAL. SUCH DIRECTIONS CANNOT POSSIBLY BE CONSTRUED AS SETTING ASIDE OF ASSESSMENT. THIS ISSUE HAS EARLIER BEEN ASSAYED BY THE HON'BLE HIGH COURT OF RAJASTHAN IN THE CASE OF COMMISSIONER OF INCOME TAX, UDAIPUR VS HINDUSTAN ZINC LTD, REPORTED IN [2012] 22 TAXMANN.COM 248 WHERE IT WAS HELD THAT DIRECTIONS ISSUED BY COMMISSIONER (A) TO THE AO TO COMPLY WITH THE DIRECTIONS OF THE ITAT WOULD NOT AMOUNT TO SETTI NG ASIDE OF THE ASSESSMENT. PARAS 20 & 21 OF THE SAID ORDER OF THE HON'BLE HIGH COURT OF RAJASTHAN IS EXTRACTED HEREIN BELOW FOR THE PURPOSES OF REFERENCE : ' 20. THIS APART, IN THE PRESENT CASE, AS OBSERVED HEREINBEFORE, THE FACTUAL ASPECT HAS BEEN THAT THE ORDER PASSED BY THE AO WHICH WAS SUBJECT OF APPEAL BEFORE THE CIT(A), WAS NOT AN ORIGINAL ORDER OF ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 24 ASSESSMENT BUT WAS AN ORDER OF ASSESSMENT PASSED AFTER REMAND BY THE IT A T. THE DIRECTIONS IN REMAND ORDE R HAVING NOT BEEN COMPLIED WITH, THE COURSE AS ADOPTE D BY THE CIT (A) CANNOT BE SAID TO BE DE HORS THE POWERS AVAILABLE TO HIM TINDER THE STATUTE. 21. ON THE FACTS AND IN THE CIRCUMSTANCES OF THE PRESENT CASES, WE ARE CLEARLY OF THE VIEW THAT EVEN IF THE APPEAL HAD BEEN FILED AFTER THE AMENDMENT TO SECTION 251(L)(A) OF THE ACT, 1961, THE ORDER AS PASSED BY THE CIT(A) DIRECTING THE AO TO DECIDE THE MATTER IN ACCORDANCE WITH THE DIRECTIONS OF THE ITAT CANNOT BE SAID TO BE UNAUTHORISED...'. IN VIEW OF THE AFORESAID OBSERVATIONS, THE ASSESSING OFFICER IS DIRECTED TO COMPLY WITH THE DIRECTIONS OF THE HON'BLE ITAT. IT IS ORDERED ACCORDINGLY. 20. WE HAVE HEARD THE RIVAL CONTENTIONS AND GONE TH ROUGH THE ORDERS OF THE AUTHORITIES BELOW. WE DO NOT FIND ANY REASON TO INTERFERE IN THE WELL-REASONED ORDER OF T HE CIT(A). THE CIT(A) HAS CLEARLY POINTED OUT THAT THE A.O. HA S BRAZENLY FAILED TO FOLLOW THE DIRECTIONS OF THE I.T.A.T. QUA THE VERIFICATION THE ASSESSEES CLAIM IN RESPECT OF INT EREST ACCRUING ON BANK LOANS IN THE EARLIER YEARS AND EVE N SET OFF OF UNABSORBED DEPRECIATION PERTAINING TO THE BLOCK PERIOD 1997-98 TO 2001-02. THE CIT(A) HAS NOTED THAT THE A SSESSEE HAD FILED ALL NECESSARY DOCUMENTS BEFORE HIM FOR VE RIFYING THESE CLAIMS BY WAY OF PROFIT & LOSS ACCOUNT, COMPU TATION OF INCOME, ASSESSMENT ORDERS AND APPELLATE ORDERS FOR EARLIER YEARS DESPITE THE SAME THE A.O. HAS FAILED TO DO AS DIRECTED, AND HAD STUBBORNLY REFUSED TO LOOK INTO SUCH RECORD S. THESE FINDINGS OF THE CIT(A) HAVE NOT BEEN CONTROVERTED B Y THE REVENUE. THEREFORE, THE FINDINGS OF THE CIT(A) TO T HE EFFECT THAT THE A.O. HAS TOTALLY DISREGARDED THE DIRECTION S OF THE I.T.A.T. IS CORRECT. WE ALSO AGREE WITH THE LD.CIT( A) THAT IN SUCH CIRCUMSTANCES, THE ISSUE NEEDED TO BE SENT BAC K TO THE ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 25 AO FOR RE-VERIFICATION AND THE SAID ACT COULD NOT B E SAID TO BE SETTING ASIDE THE ASSESSMENT ORDER WHICH THE CIT (A) WAS PROHIBITED FROM DOING U/S 251(1) OF THE ACT. THE RE ASONING OF THE CIT(A) THAT IN THE PRESENT CASE ASSESSMENT ORDE R HAS NOT BEEN SET ASIDE FOR MAKING FRESH ASSESSMENT BY THE A .O. BUT SINCE THE EARLIER ORDER PASSED BY THE A.O. MERGED W ITH THE ORDER PASSED BY THE I.T.A.T., THE A.O. WAS DUTY BOU ND TO COMPLY WITH THE DIRECTIONS OF THE I.T.A.T. AND HAVE FAILED TO DO SO THE CIT(A) HAS ONLY DIRECTED HIM TO COMPLY WI TH THE DIRECTIONS OF THE I.T.A.T. WHICH DOES NOT TANTAMOU NT TO SETTING ASIDE THE ASSESSMENT FRAMED BY THE A.O. REL IANCE PLACED BY THE CIT(A) ON THE DECISION OF THE HON'BLE HIGH COURT IS APT, WHEREIN IT HAS BEEN CATEGORICALLY HEL D THAT DESPITE THE AMENDED SECTION 251(1)(A) OF THE ACT OR DER PASSED BY THE CIT(A) DIRECTING THE A.O. TO DECIDE T HE MATTER IN ACCORDANCE WITH THE DIRECTIONS OF THE I.T.A.T., CANNOT BE SAID TO BE UNAUTHORIZED. IN VIEW OF THE ABOVE, WE D O NOT FIND ANY MERIT IN THE APPEAL OF THE REVENUE AND THE SAME IS DISMISSED. 21. IN EFFECT, BOTH THE APPEALS OF THE ASSESSEE AND THE REVENUE ARE DISMISSED. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- # % $' & (SANJAY GARG ) ANNAPURNA GUPTA) /JUDICIAL MEMBER '( /ACCOUNTANT MEMBER *# /DATED: 17 TH DECEMBER, 2018 * ' * ITA NOS.438 & 446/CHD/2018 A.Y.2001-02 26 &) *+,+ / COPY OF THE ORDER FORWARDED TO : 1. / THE APPELLANT 2. / THE RESPONDENT 3. - $ / CIT 4. - $ ( )/ THE CIT(A) 5. +./ 0 , #0 , 123/4 / DR, ITAT, CHANDIGARH 6. /35' / GUARD FILE &) $ / BY ORDER, 6 ! / ASSISTANT REGISTRAR