1984 (3) TMI 52 - HC - Income Tax

Summary

Issues:
1. Challenge to addition of advanced sums to income of assessee during assessment.
2. Jurisdiction of the AAC to direct the ITO to collect fresh evidence.
3. Validity of order of remand by the AAC and the ITO's authority to frame fresh assessment.

Analysis:
1. The judgment addressed the challenge raised by the assessee against the addition of advanced sums to their income during assessment. The ITO conducted a search at a broker's premises, revealing advances made by the assessee. The AAC set aside the ITO's order, directing proper enquiries and confrontation of the assessee with relevant material before reassessment. The Tribunal upheld the AAC's decision, leading to the reference of two questions to the High Court.

2. The first question pertained to the Tribunal's decision on the AAC's action to probe the matter afresh. The High Court, relying on Section 251 of the Income Tax Act, cited precedents to rule against the assessee and in favor of the Revenue. The court referenced Division Bench judgments to support its decision.

3. The second question involved the validity of the order of remand by the AAC and the ITO's authority to frame a fresh assessment. The assessee argued against the remand order, citing a Privy Council decision. However, the court emphasized Section 153(2A) of the Act, allowing for a fresh assessment within two years in such cases. The court rejected the assessee's argument and upheld the Revenue's position, stating that the ITO could pass a fresh assessment within the specified timeframe after a remand order.

In conclusion, the High Court ruled in favor of the Revenue on both issues, upholding the AAC's jurisdiction to direct fresh enquiries and the ITO's authority to conduct a fresh assessment within the prescribed timeline following a remand order. The judgment provided a detailed analysis of the legal provisions and precedents to support its decision, emphasizing the procedural aspects and timelines under the Income Tax Act.