Skip to content


intarcraft India Vs. Commissioner of Income-tax - Court Judgment

LegalCrystal Citation
Subject Direct Taxation
CourtDelhi High Court
Decided On
Case NumberIncome-tax Case No. 48 of 1980
Judge
Reported in[1985]154ITR662(Delhi)
ActsIncome Tax Act, 1961 - Sections 143(2) and 251(1)
Appellantintarcraft India
RespondentCommissioner of Income-tax
Excerpt:
- - 5,85,573. 3. on appeal to the aac, a number of question were urged regarding the question of items like initial depreciation and weighed deduction under s. aggarwal has raised an interesting question regarding the applicability of s. 8. we do not think that any question of law arises in the case because this is a mere case of remand for re-decision by the ito, and the remand is perfectly in accordance with the powers of the aac under s......the original return dated october 15, 1975, was for an income of rs. 4,93,079, but the revised return filed on february 23, 1977, showed a total income of rs. 3,44,196. the income assessed by the ito was rs. 5,85,573. 3. on appeal to the aac, a number of question were urged regarding the question of items like initial depreciation and weighed deduction under s. 35b and the aac was of the view that the assessment should be set aside and a de novo assessment be made after giving a fresh opportunity of hearing. 4. the assessed appeal to the tribunal claiming that there should have been no remand and instead the assessment should have been annualled, or alternatively, the aac should have disposed of the appeal on merits. one of the points raised before the tribunal was that the.....
Judgment:

Kapur J.

1. The assessed has sought a reference of three question under s. 256(1) of the Income-tax Act, 1961. The question are as follows :

'1. Whether, on the faces and in the circumstances of the case, was the Income-tax Appellate Tribunal legally correct in upholding the action of the Appellate Assistant Commissioner in setting aside the assessment with the direction that the assessment be re-made by the Income-tax Officer

2. Whether, on the facts and in the circumstances of the case, the decision of the Supreme Court in Guduthur Bros.' case [1960] 40 ITR 298, is applicable to the facts and circumstances of the case

3. Whether, on the facts and in the circumstances of the case, the Tribunal has misdirected itself in load in upholding the order of the Appellate Assistant Commissioner ?'

2. The circumstances are that the ITO had made an assessment order after a revised return had been filed before him during the course of the hearing. It appears that a notice was issued under s. 143(2) of the I.T. Act, 1961, in respect of the original return, but in the course of hearing, a revised return was filed quo which no notice under s. 143(2) was issued separately. The original return dated October 15, 1975, was for an income of Rs. 4,93,079, but the revised return filed on February 23, 1977, showed a total income of Rs. 3,44,196. The income assessed by the ITO was Rs. 5,85,573.

3. On appeal to the AAC, a number of question were urged regarding the question of items like initial depreciation and weighed deduction under s. 35B and the AAC was of the view that the assessment should be set aside and a de novo assessment be made after giving a fresh opportunity of hearing.

4. The assessed appeal to the Tribunal claiming that there should have been no remand and instead the assessment should have been annualled, or alternatively, the AAC should have disposed of the appeal on merits. One of the points raised before the Tribunal was that the assessment was a nullity because no notice was issued under s. 143(2) in respect of the revised return filed during the hearing. The Tribunal was of the view that there was discretionary power in the AAC and nothing wrong with the order remanding the case. A reference was made to Guduthur Bros. v. ITO : [1960]40ITR298(SC) , decided by the Supreme Court regarding illegality in the procedure, etc.

5. Though Mr. Aggarwal has raised an interesting question regarding the applicability of s. 143(2), and also submitted that the time-limit for making an assessment on the revised return expired one year after the return was filed, we are impressed by the fact that the assessment order was passed before that one year period was over and, thereafter, it was for the AAC to decide whether to set aside the assessment, vary the same or remand the case in accordance with the power contained in s. 251 of the Act. Having decided that the matter should be remanded, we think the question revised do not really arise. It is also noteworthy that the question of giving a fresh notice under s. 143(2) was not urged before the AAC, but only before the Tribunal. But, that does not make a much difference to this case.

6. The real point urged by Mr. Aggarwal was that once a revised return is filed, then the ITO must stop the proceedings and must give a fresh notice under s. 143(2) and only when can be proceed with the case. Mr. Wadhera referred to the order sheet of the ITO showing that the after the revised return was filed, the proceedings continued for a number of hearing and the revised return was taken into consideration while making the assessment order. It does not appear that any objection was raised to this procedure by the assessed before the ITO. Mr. Wadhera pointed out that no particular procedure is required for giving a notice under s. 143(2) and if a revised return is filed in the course of hearing, it can be taken that notice had been given and taken by the assessed. We think this controversy is a bit unnecessary at this state because after the remand, the assessment has been made.

7. Assuming that the assessment was made after the procedural irregularity in giving the notice, it was open to the AAC to set aside the order and remand the case. Mr. Aggarwal submitted that this was an illegality which could not be rectified. But, we do not see why this is so. Mr. Wadhera had pointed out that after a remand has been made, there is a further period granted by the Act in which the assessment can be completed de novo by the ITO and he has referred to s. 151(2A) and also to some decided cases. It, thereforee, appears that the contention that the proceedings had come to an end because no notice under s. 143(2) had been issued in respect of the revised return seems out of the place now, because after the remand, if no such notice is issued, it may be open to the assessed to raise this very contention in respect of the assessment made after the remand.

8. We do not think that any question of law arises in the case because this is a mere case of remand for re-decision by the ITO, and the remand is perfectly in accordance with the powers of the AAC under s. 251(1)(a). For convenience, this power can set out here :

'(a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annual the assessment; or he may set aside the assessment and refer the case back to the Income-tax Officer for making a fresh assessment in accordance with the direction given by the Appellate Assistant Commissioner...'

9. In the circumstances, we reject the application. In view of the novelty of the point and particularly the contentions raised regarding procedural irregularity and procedural illegality, we make no order as to costs.


Save Judgments// Add Notes // Store Search Result sets // Organizer Client Files //