Facts of the Case

  1. An assessment was originally framed under Section 143(3) of the Income-tax Act, 1961.
  2. The Revenue challenged the order of the CIT(A).
  3. During the pendency of the proceedings, a search operation was conducted on 21 March 2007.
  4. Search assessment proceedings were initiated covering the relevant assessment year.
  5. Before the ITAT, the Revenue itself stated that regular assessment proceedings stood abated and its appeal had become infructuous.
  6. Based on the Revenue’s own submission, the Tribunal dismissed the appeal as infructuous.
  7. Thereafter, the Revenue filed an appeal before the High Court challenging the Tribunal's order.

Issues Involved

  1. Whether the Revenue can challenge an order of the Tribunal that was passed on the basis of its own statement and submission?
  2. Whether an appeal remains maintainable after the Revenue itself acknowledges that the proceedings have become infructuous due to subsequent search assessments?
  3. What is the appropriate remedy if the Department believes that the statement made before the Tribunal was incorrect?

Petitioner’s Arguments (Revenue)

  • The Revenue sought to challenge the order of the Tribunal dismissing its appeal as infructuous.
  • It was contended that the plea taken by the Departmental Representative before the Tribunal was not correct.
  • The Revenue attempted to argue that the Tribunal should not have dismissed the appeal solely on the basis of the statement made before it.

Respondent’s Arguments

  • The Tribunal had merely accepted the statement made by the Revenue itself.
  • Once the Revenue had represented that the appeal had become infructuous because of the search assessment proceedings, it could not subsequently challenge the resulting order.
  • The appeal filed before the High Court was therefore not maintainable.

Court Findings

The Delhi High Court observed that:

  • The Tribunal had accepted the specific contention advanced by the Revenue itself.
  • After obtaining an order on the basis of its own submission, the Revenue could not legitimately claim to be aggrieved by that very order.
  • The appeal filed before the High Court was wholly misconceived.
  • Since the Revenue had itself taken the position that the appeal had become infructuous, the Tribunal was justified in dismissing it accordingly.

The Court held that the Revenue's appeal was not maintainable.

Court Order

The Delhi High Court dismissed the Revenue's appeal as not maintainable and misconceived.

Important Clarification

The Court clarified that even if the Revenue believed that the statement made by its Departmental Representative before the Tribunal was incorrect, the proper course was not to file an appeal before the High Court.

Instead, the Department should move an appropriate application before the Tribunal seeking suitable relief or correction.

Sections Involved

  • Section 143(3), Income-tax Act, 1961
  • Search Assessment Proceedings under the Income-tax Act, 1961
  • Appellate Proceedings before Commissioner of Income Tax (Appeals) [CIT(A)]
  • Proceedings before the Income Tax Appellate Tribunal (ITAT)

Link to download the order –

https://delhihighcourt.nic.in/app/case_number_pdf/2009:DHC:9384-DB/AKS30102009ITA10862009_151029.pdf

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