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Omprakash Premchand and Company Vs. Inspecting Assistant Commissioner - Court Judgment

LegalCrystal Citation
SubjectDirect Taxation
CourtMadhya Pradesh High Court
Decided On
Case NumberMiscellaneous Civil Matter No. 529 of 1982
Judge
Reported in[1984]147ITR46(MP)
ActsIncome Tax Act, 1961 - Sections 144B
AppellantOmprakash Premchand and Company
Respondentinspecting Assistant Commissioner
Appellant AdvocateG.M. Chaphekar and ;Mandovra, Advs.
Respondent AdvocateNone
Excerpt:
- - 6. we are not satisfied that this is a fit case for exercise of our jurisdiction under arts......of rs. 4,37,049. the ito, acting under section 144b of the i.t. act, 1961 ('the act'), passed a draft assessment order determining the income of the petitioner at rs. 5,25,020. since, according to the ito, the variation in the income returned and proposed in the draft order exceeded rs. 1,00,000, he referred the case to the iac along with the assessee's objections. notice of hearing was issued by the iac to the petitioner, who raised an objection about his jurisdiction on the ground that the variation between the returned and proposed incomes did not exceed rs. 1,00,000.3. in the meantime, the ito after notice to the petitioner, rectified the earlier order on june 29, 1982 (vide annex. i). in the rectification order the ito noted that there was a typographical error in mentioning the.....
Judgment:

1. Shri G. M. Chaphekar, heard on admission. The petitioner is a partnership firm and is assessed to income-tax.

2. For the assessment year 1979-80, the petitioner had returned an income of Rs. 4,37,049. The ITO, acting under Section 144B of the I.T. Act, 1961 ('the Act'), passed a draft assessment order determining the income of the petitioner at Rs. 5,25,020. Since, according to the ITO, the variation in the income returned and proposed in the draft order exceeded Rs. 1,00,000, he referred the case to the IAC along with the assessee's objections. Notice of hearing was issued by the IAC to the petitioner, who raised an objection about his jurisdiction on the ground that the variation between the returned and proposed incomes did not exceed Rs. 1,00,000.

3. In the meantime, the ITO after notice to the petitioner, rectified the earlier order on June 29, 1982 (vide annex. I). In the rectification order the ITO noted that there was a typographical error in mentioning the amount, which should have been Rs. 6,40,220 on the basis of the estimate of sales mentioned in the original order.

4. The IAC thereon issued the notice, annex. F, dated September 3, 1982, under Section 144B, referring to the rectified order and posted the case for hearing on September 16, 1982. The petitioner has challenged annex. F, which is the notice by the IAC on the ground that in view of the fact that the draft order did not show a variation of Rs. 1,00,000 between the returned and the proposed incomes, the IAC had no jurisdiction to act under Section 144B.

5. After hearing the learned counsel, we find that this petition has to be dismissed. The validity of the order of rectification (annex. I) has already been challenged by the petitioner before the Commissioner (Appeals) in accordance with the provisions of the Act--(see para. 11 of the petition). It was not disputed that the order of assessment, which will finally be made by the ITO after compliance with the provisions of Section 144B, will be appealable. The learned counsel, however, contended that the challenge in the petition was to the jurisdiction of the IAC and, therefore, the remedy of appeal provided under the Act was not an equally efficacious remedy and this court could quash the proceedings before the IAC in exercise of its powers under Articles 226 and 227 of the Constitution of India.

6. We are not satisfied that this is a fit case for exercise of our jurisdiction under arts. 226 and 227 of the Constitution. Admittedly, there are remedies of appeals before the Commissioner (Appeals) and the Tribunal, available to the petitioner. If a question of law arises, a reference can be made to this court. Prima facie it appears that the ITO by rectifying his order, brought the draft assessment within the requirements of Section 144B, and, therefore, the IAC had jurisdiction to take further steps in accordance with the above provision. Whether the rectification was proper or not is, as already observed, the subject-matter of a pending appeal beforethe Commissioner (Appeals). If the rectification is legal and valid, the proceedings before the IAC are prima facie valid and within his jurisdiction.

7. In the circumstances, this petition is dismissed summarily.


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