1973 (5) TMI 26 - HC - Income Tax

Summary

Issues:
1. Assessment made under the wrong Act of 1922 instead of the Act of 1961.
2. Competency of the Appellate Assistant Commissioner to direct assessment under the Act of 1961 after the time limit.
3. Jurisdiction of the Income-tax Officer in relation to the assessment order.
4. Power of the Appellate Assistant Commissioner to set aside the assessment and refer the case back.

Analysis:

Issue 1:
The initial assessment was made under the Act of 1922 instead of the Act of 1961. The Appellate Assistant Commissioner held that the assessment should have been made under the Act of 1961. The Tribunal accepted the contention that the assessment under the wrong Act was invalid. However, the High Court considered whether the assessment order was null and void or merely incorrect.

Issue 2:
The Appellate Assistant Commissioner directed the Income-tax Officer to complete the assessment under the Act of 1961. The assessee contended that this direction was invalid as it revived a time-barred assessment. The Tribunal held that the Appellate Assistant Commissioner could not extend the time limit for a valid assessment. The High Court analyzed the powers of the Appellate Assistant Commissioner in setting aside the assessment and referring the case back.

Issue 3:
The High Court examined whether the Income-tax Officer's order was null and void or merely irregular. It referred to previous judgments to determine that mentioning a wrong provision of law does not render the order null and void. The Court held that the order should be related to the jurisdiction the officer had, i.e., the Act of 1961.

Issue 4:
The High Court concluded that the Appellate Assistant Commissioner had the power to set aside the assessment and refer the case back to the Income-tax Officer under section 251 of the Income-tax Act, 1961. The Court determined that the order was not null and void, allowing for the referral back to the Income-tax Officer for a correct assessment under the Act of 1961.

In conclusion, the High Court answered the question in the negative, in favor of the department and against the assessee. The Court emphasized that the Appellate Assistant Commissioner had acted within his powers in setting aside the assessment and referring the case back to the Income-tax Officer. The judgment clarified the jurisdictional issues and the powers of the authorities involved in the assessment process.