2000 (6) TMI 18 - HC - Income Tax

Summary

Issues:
Validity of assessment order due to tax calculation in Form I.T.N.S. 150
Applicability of previous court decisions on assessment order legality

Analysis:
The High Court of Jammu and Kashmir was tasked with addressing the validity of an assessment order under the Income-tax Act, 1961. The case involved an assessee, Alkeensons Agencies, challenging an addition to their disclosed income by the Income-tax Officer for the assessment year 1973-74. The Appellate Assistant Commissioner upheld the addition, leading the assessee to appeal to the Tribunal. The assessee argued that the assessment order was illegal as the tax demanded was not computed within the order itself. The Tribunal agreed, citing a previous court decision. However, the Revenue contended that the tax had indeed been properly calculated in Form I.T.N.S. 150, which accompanied the assessment order. The Tribunal deleted the additions, prompting the Revenue to seek a reference to the High Court.

Upon review, the High Court considered the Supreme Court's decision in Kalyankumar Ray v. CIT [1991] 191 ITR 634, which clarified that the Income-tax Officer is required to determine both the total income and the net sum payable in writing, but not necessarily on the same sheet of paper. The Supreme Court acknowledged the practice of calculating tax payable in Form I.T.N.S. 150, signed by the Income-tax Officer, as compliant with the statutory provision. The Court emphasized that the assessment order need not contain the tax calculation itself, as long as it is determined in a signed or initialled form by the Income-tax Officer.

The High Court concluded that the tax payable had been calculated in Form I.T.N.S. 150, signed by the Income-tax Officer along with the assessment order, fulfilling the statutory requirement. Therefore, the assessment order was deemed valid, contrary to the Tribunal's decision. The Court clarified that the previous court decision cited by the assessee did not apply to the present case, where the tax calculation was done in a separate form. Consequently, both questions referred to the High Court were answered in favor of the Revenue and against the assessee, leading to the disposal of the reference with no costs awarded.