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18-10-2019, Neetaa Suneel Shah, Section 147, 111A, 68, HIGH COURT OF MADRAS
The challenge made in this writ petition is against the assessment orderdated 31.12.2018 made under Section 143(3) r/w Section 254 of the Income Tax, Act, 1961.
2. The case of the petitioner, in short, is as follows:
The petitioner is an individual Assessee. The relevant assessment year is 2010-2011. The assessment of the petitioner was reopened by issuing a notice under Section 148 of the Income Tax, Act, 1961, (for brevity "IT Act"). The reasons for reopening is that the Assessee had evaded tax through the client modification mode with regard to brokers in futures and options business. The petitioner had objected to the reopening and however, the objections were rejected by the Assessing Officer, by order dated 29.08.2016. During the course of assessment proceedings, the petitioner had stated that she is consistently reporting her income/loss on sale of shares under the head Capital Gains. The assessment was completed by order dated 15.09.2016 under Section 143(3) r/w 147 of the IT Act. In the said assessment order, the Assessing Officer confirmed the assessment by making an addition of a sum of Rs.25,05,304/- as Short Term Capital Gains. Therefore, the Assessing Officer has accepted that the income has to be assessed under the head Capital Gains and consequently, made the addition as stated supra. The petitioner filed an appeal before the CIT(A) and the same was dismissed on 22.06.2017. The petitioner preferred further appeal before the Income Tax Appellate Tribunal, questioning the erroneous addition of Rs.25,05,304/- as Short Term Capital Gains. The entire issue in the appeal was only in relation to the sole addition of Rs.25,05,304/- as Short Term Capital Gains and no other dispute in respect of characterization of the heads of income of the petitioner. The Tribunal, by order dated 10.10.2017, remanded the sole issue in appeal to the file of the Assessing Officer, as it has found that there was violation of principles of natural justice. After remand, the Assessing Officer, without issuing any notice of personal hearing and n complete violation of the order of the Tribunal, completed the assessment by order dated 31.12.2018 and enhanced the total income of the Assessee. The entire income of the Assessee, which was accepted in the reopening of the assessment under the head Capital Gains, is now being assessed under the head Profits and Gains from the business and profession. Thus, the enhanced income of the petitioner by making new addition of Rs.60,48,161/- is without any notice of hearing. While the Assessing Officer has allowed the claim of Brought/Forward losses in the assessment order dated 15.09.2016, under Section 143(3) r/w 147 of the IT Act, has now, chosen to reject the claim of set off brought/forward without capital loss. The said act would amount to change of opinion. The addition of Rs.25,05,304/- which was made in the reopening of the assessment as Short Term Capital Gains is now, being added as income from Undisclosed Sources under Section 68 of the IT Act. Thus, the present impugned order enhancing the income of the petitioner pursuant to the order of the remand made by the Income Tax Appellate Tribunal, is wholly without jurisdiction, as the other issues dealt with by the Assessing Officer is not the subject matter appeal or issues raised in appeal. Since the impugned order was passed without jurisdiction and in violation of principles of natural justice, the present writ petition is maintainab e, even though the appellate remedy is available against the order impugned.
3. The respondent filed a counter affidavit, wherein, it is stated as follows:
The writ petition is liable to be dismissed on the ground of availability of the statutory appellate remedy against the impugned order. It is not in