COMMISSIONER OF INCOME-TAX Vs. VENKATESHA EDUCATION SOCIETY

JUDGEMENT

(1.) THIS income tax appeal is directed against the order dated 3rd February 2006 passed by Income Tax Appellate Tribunal (for short 'the Tribunal' ) in ITA No.1778/Bang/04 for the assessment year 1998 -99. By this order, the Tribunal allowed the appeal which was directed against the order dated 21 -02 -2003 passed in exercise of the revisional power conferred under Section 263 of the Income Tax Act, 1961 (for short 'the Act'), by the Director of Income Tax (Exemptions), Bangalore (for short 'the Revisional Authority'). By this order, the revisional authority, set aside the order dated 24 -11 -2000 passed by the Deputy Commissioner of Income Tax (for short 'the Assessing Officer') holding that the order under Section 143(3) of the Act is erroneous and prejudicial to the interest of the Revenue and remanded the matter to the Assessing Officer with a direction to make further enquiries on the basis of the observations made therein. In the order, the revisional authority, made detailed reference to the points, on which show cause notice was issued by the Commissioner dated 08 -01 -2003. The concluding paragraph in the order of the revisional authority reads thus:

(2.) AFTER the order of revisional authority dated 21 -02 -2003, it appears that the Assessing Officer passed a detailed order, after having taken into consideration the observations made by the revisional authority in the order dated 21 -02 -2003 and disposed of the matter vide order dated 30 -03 -2004. At the same time, the order of the revisional authority dated 21 -02 -2003 was also challenged by the assessee before the Tribunal and the Tribunal, after the order of the revisional authority was acted upon, set aside the same by the impugned order holding that the points on which, the revisional authority had set aside the order dated 24 -11 -2000 passed by the Assessing Officer and remanded the matter to hold fresh enquiry were already considered and enquired by the Assessing Officer while passing the said order (24 -11 -2000). This observation, in our opinion, was factually incorrect. More over, it was not proper on the part of the Tribunal to decide the matter on merits and set aside the order passed in the revision dated 21 -02 -2003, despite the fact that the said order had already been acted upon and the Assessing Officer had decided the matter vide order dated 30 -03 -2004.

(3.) IT is pertinent to note that the assessee did not seek stay of the proceedings pending before the Assessing Officer, after filing of the appeal before the Tribunal, against the order passed by the revisional authority dated 21 -02 -2003. As a result thereof, the Assessing Officer proceeded to hear and decide the matter on merits in the light of the observations made by the revisional authority in his order dated 30 -03 -2004. That apart, the assessee then had filed an appeal before the CIT (A) against the order dated 30 -03 -2004 and the appeal was also pending when the Tribunal decided the appeal vide order dated 3rd February 2006. However, in view of the order passed by the Tribunal, CIT (A) instead of deciding the appeal on merits disposed it of vide order dated 16 -02 -2006 as infructuous.