1984 (4) TMI 23 - HC - Income Tax

Summary

Issues involved:
The issues involved in the judgment are:
1. Whether the Income-tax Appellate Tribunal was legally correct in upholding the action of the Appellate Assistant Commissioner in setting aside the assessment for re-making by the Income-tax Officer.
2. Applicability of the decision of the Supreme Court in Guduthur Bros.' case to the facts and circumstances of the case.
3. Whether the Tribunal misdirected itself in law in upholding the order of the Appellate Assistant Commissioner.

Judgment Details:

Issue 1:
The Income Tax Officer (ITO) made an assessment order after a revised return was filed during the hearing. The original return showed an income of Rs. 4,93,079, while the revised return indicated a total income of Rs. 3,44,196. The ITO assessed the income at Rs. 5,85,573. The Appellate Assistant Commissioner (AAC) set aside the assessment, stating that a de novo assessment should be made after providing a fresh opportunity for hearing. The Tribunal upheld the AAC's decision, citing discretionary power and referring to the case of Guduthur Bros. v. ITO. The Tribunal found no issue with the remand order by the AAC.

Issue 2:
The counsel raised a question regarding the applicability of section 143(2) of the Income-tax Act and argued that the time limit for assessment on the revised return had expired. However, the assessment order was passed within the time limit, and it was within the AAC's power to remand the case under section 251 of the Act. The Tribunal considered the revised return in making the assessment order, even though no separate notice under section 143(2) was issued for it.

Issue 3:
The main contention was whether the ITO should have stopped proceedings and issued a fresh notice under section 143(2) after the revised return was filed. The counsel argued that the assessment was invalid due to procedural irregularity. However, the court held that the AAC had the authority to set aside the order and remand the case for a fresh assessment. The court rejected the application, stating that it was a case of remand for re-decision by the ITO, which was within the AAC's powers under section 251(1)(a).

In conclusion, the court found no legal question arising from the case and rejected the application, considering the procedural irregularities and legality issues raised.