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Issues:
1. Dismissal of appeal as infructuous without fixing a date for hearing. 2. Interpretation of Section 31 of the Indian Income-tax Act, 1922. Analysis: The case involved an appeal against an assessment order under the Income-tax Act, 1922. The Income-tax Officer had initially passed an assessment order under section 23(4) due to the assessee's non-compliance with certain notices. Subsequently, the assessee filed an application under section 27 seeking cancellation of the ex parte assessment order. The Income-tax Officer accepted the application under section 27, set aside the assessment order, and reopened the assessment proceedings. The Appellate Assistant Commissioner was informed of the cancellation of the original assessment, and the Commissioner dismissed the appeal as infructuous without fixing a date for the hearing, leading to the assessee's appeal before the Tribunal. The Tribunal held that the Commissioner should have fixed a date and place for the hearing of the appeal as per section 31 of the Act. Additionally, the Tribunal noted that the appeal could not be considered infructuous solely based on the cancellation under section 27, as the assessee had raised additional grounds challenging the assessment order. The Tribunal allowed the appeal and referred the case back to the Commissioner for further consideration. The Tribunal referred a question of law to the High Court regarding the Appellate Assistant Commissioner's authority to dismiss the appeal as infructuous without fixing a hearing date. The High Court analyzed the provisions of section 31 of the Income-tax Act, which outline the procedure for hearing and disposal of appeals on their merits. The Court noted that while the section allows for adjournment and further inquiries for appeals to be heard on their merits, it becomes inapplicable in situations where the appeal cannot be decided on its merits due to extraordinary circumstances, such as the cancellation of the assessment order. The Court held that in such cases, it is justified for the Appellate Assistant Commissioner not to fix a date and place for the hearing, as the appeal has become infructuous. Insisting on a hearing date in such situations would only cause unnecessary inconvenience to the assessee without achieving any meaningful outcome. Therefore, the High Court disagreed with the Tribunal's interpretation and ruled in favor of the department, answering the question in the negative.
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