1984 (1) TMI 86 - AT - Income Tax

Summary

Issues:
1. Rejection of applications under section 146 of the Income Tax Act for the assessment years 1975-76 and 1976-77.
2. Validity of ex-parte assessments made by the Income Tax Officer (ITO) under section 144 of the Act.
3. Compliance with notices issued under section 142(1) and 148 of the Act.
4. Interpretation of the representative's attendance at the ITO's office.
5. Direction to re-open assessments and make fresh assessments in accordance with the law.
6. Impact on quantum assessments for the assessment years in question.

Analysis:
The appeals before the Appellate Tribunal ITAT Allahabad pertain to the rejection of applications under section 146 of the Income Tax Act for the assessment years 1975-76 and 1976-77. The original assessments were made for these years, but subsequently, the ITO initiated proceedings under section 148 of the Act due to alleged omissions in including income from the assessee's wife. The ITO proceeded with ex-parte assessments under section 144, citing non-filing of returns and non-compliance with notices issued under section 142(1). The assessee contended that their representative attended the ITO's office, as evidenced by the Visitors' Register, and argued for the non-applicability of ex-parte assessments. The Tribunal noted the representative's attendance and held that the ITO should have waited for their return before proceeding ex-parte, directing a re-opening of assessments for both years.

The crux of the matter revolved around the adequacy of the assessee's compliance with the notices issued under section 142(1) and 148 of the Act. The Tribunal found that the representative's presence at the ITO's office, as indicated in the Visitors' Register, demonstrated compliance. The Tribunal emphasized that the ITO should have waited for the representative's return before proceeding ex-parte, as leaving for lunch or other reasons did not negate compliance. Consequently, the Tribunal directed the ITO to re-open the assessments for both years and conduct fresh assessments in adherence to the law.

In light of the Tribunal's decision to re-open the assessments and the finding of sufficient cause for non-compliance with the notices, the appeals against the quantum assessments for the relevant years were deemed to have become infructuous and were allowed. The Tribunal, therefore, allowed all the appeals, setting aside the rejection of the applications under section 146 and directing the re-opening of assessments for a fresh determination in accordance with the law.