1947 (4) TMI 20 - HC - Income Tax

Summary

Issues:
1. Authority of the Tribunal to order resumption of assessment proceedings.
2. Jurisdiction of the Appellate Tribunal in directing further enquiry by the Income Tax Officer.

Analysis:
The judgment pertains to a reference made by the Income Tax Appellate Tribunal under Section 66(1) of the Indian Income Tax Act regarding the authority of the Tribunal to order the resumption of assessment proceedings. The assessees, acting as agents for a company, had returned a loss in their business, which was disputed by the Income Tax Officer. The Officer alleged that the assessees were involved in the black market, receiving payments exceeding the recorded amounts. This led to an assessment adding substantial profits to the assessees' income, which was partially upheld by the Appellate Assistant Commissioner but later challenged by the assessees before the Tribunal.

The Tribunal, in its order, disagreed with the previous assessments and directed the Income Tax Officer to re-examine the case from a specific stage, involving further enquiry with the customers of the assessees. The main contention was whether the Tribunal had the authority to issue such directions. The powers of the Tribunal under Section 33(4) of the Act are broad, allowing it to pass orders as deemed appropriate after hearing both parties. The Tribunal's powers were compared to those of the Appellate Assistant Commissioner under Section 31(3), who can set aside an assessment and direct a fresh enquiry. It was concluded that the Tribunal's authority is not limited to merely allowing or rejecting an appeal, but extends to directing further enquiries, similar to the powers of the Appellate Assistant Commissioner.

The judgment affirmed that the Tribunal had the jurisdiction to order the resumption of assessment proceedings and direct the Income Tax Officer to conduct a fresh enquiry. The reference was answered in the affirmative, with costs awarded to the Commissioner. The concurring opinion by Justice Patanjali Sastri supported the decision, and the matter was settled in favor of the Tribunal's authority to issue such directions in income tax matters.