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Posted on by editor
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DATE: May 25, 2018 (Date of pronouncement)
DATE: June 11, 2018 (Date of publication)
AY: 2006-07, 2007-08, 2008-09
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CITATION:
S. 251(1): While the CIT(A) has the power to "enhance the assessment", he has no power to travel beyond the subject-matter of the assessment and is not entitled to assess new sources of income. In order for the CIT(A) to enhance, there must be something in the assessment order to show that the AO applied his mind to the particular subject-matter or the particular source of income with a view to its taxability or to its non-taxability and not to any incidental connection (all judgements considered)

The principle emerging from various pronouncements of the Supreme Court is that the first Appellate Authority is invested with very wide powers under Section 251(1)(a) of the Act and once an assessment order is brought before the authority, his competence is not restricted to examining only those aspects of the assessment about which the assessee makes a grievance and ranges over the whole assessment to correct the Assessing Officer not only regarding a matter raised by the assessee in appeal but also regarding any other matter considered by the Assessing Officer and determined in assessment. There is a solitary but significant limitation to the power of revision: It is not open to the Appellate Commissioner to introduce in the Assessment a new source of income and the assessment must be confined to those items of income which were the subject-matter of the original assessment

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Posted on by Rakesh Fanindra Joshi
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DATE: December 30, 2016 (Date of pronouncement)
DATE: March 17, 2017 (Date of publication)
AY: 2009-10
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CITATION:
S. 251: The CIT(A) has no power to enhance by discovering a new source of income which is neither discussed in the assessment order nor mentioned in the return of income filed by the assessee

It is well settled law laid down by the Hon’ble Apex Court in Commissioner of Income Tax Vs. Shapoorji Pallonji Mistry, 44 ITR 891 (SC) and Commissioner of Income Tax Vs. Rai Bahadur Hardutroy Motilal Chamaria, 66 ITR 443 (SC) and subsequently followed by the Hon’ble Delhi High Court in Commissioner of Income Tax Vs. Sardari Lal & Co., 251 ITR 864 (Delhi)(SB) that the CIT(A) is not competent to enhance assessment in appeal by discovering new source of income not mentioned in return or consider by the Assessing Officer in assessment. We hold that the Commissioner of Income Tax (Appeals) has exceeded his jurisdiction in making addition u/s. 2(22)(e) of the Act as there is no reference of such income either in the return of income or in the assessment proceedings

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Posted on by editor
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DATE: July 16, 2015 (Date of pronouncement)
DATE: July 27, 2015 (Date of publication)
AY: 2007-08
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CITATION:
S. 40(a)(ia): In an appeal against an order passed by the AO to give effect to the ITAT's order, the CIT(A) has no jurisdiction to enhance the assessee with respect to a new source of income or disallowance of expenditure

The direction to the Assessing Officer by the CIT(Appeals) to disallow payments made by the assessee under sec. 40(a)(ia) of the Act was a question of taxability of income from a new source of income which has not been considered by the Assessing Officer, hence it was exceeding of jurisdiction by the CIT(Appeals) in a set aside matter by the ITAT in the present case. Though the CIT(Appeals) has co-terminus powers as of the Assessing Officer and is empowered to do what an Assessing Officer can do for the assessment, the directed disallowance was new source of income, which was not the subject matter of setting aside order by the ITAT

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