1990 (9) TMI 39 - HC - Income Tax

Summary

Issues Involved:
Two questions referred by the Tribunal under section 256(1) of the Income-tax Act, 1961, one at the instance of the assessee and the other at the instance of the Revenue.

Issue 1 - Question at the Instance of the Assessee:
The question raised was whether the assessment order passed by the Income-tax Officer under section 23(3)/33B of the Indian Income-tax Act, 1922, was valid in law considering a prior assessment order under section 143(3) of the Income-tax Act, 1961. The assessment in question was for the year 1946-47. The Commissioner had reopened the assessment under section 33B of the Indian Income-tax Act, 1922, while the Income-tax Officer had reopened it under section 34 of the same Act. The court upheld the validity of the Commissioner's order, rendering the question moot. The court ruled in favor of the Revenue and against the assessee on this issue.

Issue 2 - Question at the Instance of the Revenue:
The second question pertained to additions made by the Income-tax Officer in the assessment, specifically regarding a speculation loss and a cash credit. The Commissioner found the Income-tax Officer's actions unsustainable and prejudicial to the Revenue, issuing a show-cause notice under section 33B. The Commissioner's order limited the Income-tax Officer's jurisdiction to only the two mentioned items, preventing additional additions to the assessee's income. The Tribunal concurred with this view, citing a previous court decision affirming the same principle. Consequently, the court ruled in favor of the assessee and against the Revenue on this issue.

Conclusion:
The High Court disposed of the income-tax reference accordingly, with no costs incurred.