1985 (9) TMI 56 - HC - Income Tax

Summary

Issues:
1. Validity of reassessment under section 147(a) of the Income-tax Act, 1961.
2. Maintainability of the appeal by the assessee to the Tribunal.
3. Entitlement of the assessee to prefer the appeal before the Tribunal.

Analysis:
1. The judgment revolves around the reassessment under section 147(a) of the Income-tax Act, 1961. The case involves the inclusion of a sum in the assessee's income based on information received by the Income-tax Officer regarding alleged receipt of premium. The Appellate Assistant Commissioner found that the Income-tax Officer's conclusion lacked a basis as there were no details of the alleged payments in the record. The Appellate Assistant Commissioner remanded the matter for further inquiry to determine the nature of the payments. The Tribunal held that the reassessment was not valid as the essential conditions were not satisfied, and there was no material to support the belief that income exceeding a certain amount had escaped assessment. The Tribunal also found that the Appellate Assistant Commissioner erred in calling for a remand report for a fishing inquiry, leading to the cancellation of the reassessment.

2. The issue of the maintainability of the appeal by the assessee to the Tribunal was raised by the Revenue, arguing that since the Appellate Assistant Commissioner had passed a remand order directing further inquiries, no appeal lay to the Tribunal. However, the Tribunal determined that the order of the Appellate Assistant Commissioner was final as it disposed of the points raised by the assessee, making the appeal to the Tribunal permissible. The Tribunal concluded that the assessee had the right to appeal based on the final nature of the Appellate Assistant Commissioner's order.

3. The judgment also addresses the entitlement of the assessee to prefer the appeal before the Tribunal. The Revenue contended that the assessee could have waited until the Appellate Assistant Commissioner had considered the remand report before filing the appeal. However, it was established that the appeal by the assessee to the Tribunal was competent under section 253 of the Income-tax Act, 1961, as the Appellate Assistant Commissioner's order had conclusively decided against the assessee on a preliminary issue. Therefore, the assessee was within her rights to file the appeal without waiting for further inquiries or reports.

In conclusion, the judgment clarifies the validity of reassessment under section 147(a), the maintainability of the appeal by the assessee, and the entitlement of the assessee to prefer the appeal before the Tribunal, ultimately ruling in favor of the assessee and directing the Revenue to pay the costs of the reference.