1992 (9) TMI 19 - HC - Income Tax

Summary

Issues:
1. Whether the assessee was estopped from appealing before the Commissioner of Income-tax (Appeals) for not objecting to the draft assessment order under section 144B of the Income-tax Act?
2. Whether the draft unsigned assessment order forwarded by the Income-tax Officer under section 144B(1) of the Income-tax Act was valid?

Analysis:

Issue 1:
The case involved the question of whether the assessee's appeal before the Commissioner of Income-tax (Appeals) was maintainable despite not raising objections to the draft assessment order under section 144B. The unsigned assessment order was served on the assessee, who submitted objections after the stipulated time. The Commissioner of Wealth-tax (Appeals) dismissed the appeal, stating that objections were not filed within the specified period. The Tribunal also held the appeal was not maintainable. The High Court analyzed section 246 of the Income-tax Act, emphasizing that the right of appeal was not intended to be taken away even if objections were not filed in time under section 144B. The High Court referred to precedents from Calcutta and Kerala High Courts to support its view. It concluded that the appeal was maintainable and should be decided on merits.

Issue 2:
The second issue revolved around the validity of the draft unsigned assessment order forwarded by the Income-tax Officer under section 144B(1) of the Income-tax Act. The court highlighted that the purpose of section 144B was to provide the assessee with an early opportunity to raise objections to proposed additions to income. While the communication required authenticity, the absence of the Income-tax Officer's signature on the draft order did not render the proceedings invalid. The court deemed any defect in this regard as technical, in line with the objective of section 144B. Citing a Gujarat High Court case, the court held that such defects were not fatal to the proceedings. Consequently, the court answered the reframed questions, affirming in favor of the assessee for the first issue and in favor of the Revenue for the second issue, with no costs awarded.