1983 (5) TMI 50 - AT - Income Tax

Summary

Issues Involved:
1. Validity of the assessment order under section 143(3) of the Income-tax Act, 1961.
2. Jurisdiction of the Tribunal to rehear the appeal of the assessee.
3. Compliance with section 143(3)(a) regarding the determination of tax payable by the assessee.
4. Applicability of section 292B to cure defects in the assessment order.

Detailed Analysis:

1. Validity of the Assessment Order under Section 143(3):
The primary issue was whether the assessment order passed by the Income Tax Officer (ITO) on 30-3-1978 was invalid due to the non-determination of the tax payable by the assessee within the assessment order itself. The assessee argued that the ITO failed to determine the tax payable as mandated by section 143(3)(a), rendering the assessment invalid. The assessee relied on the J&K High Court's decision in S. Mubarik Shah Naqshbandi v. CIT and the Tribunal's decision in Smt. Sushilla Devi Rajendra Lal v. ITO to support their claim. However, the Tribunal found that the ITO had computed the total income and issued a demand notice on the same date, indicating the net tax payable. The Tribunal concluded that the assessment order was valid as the tax was determined on a separate form (ITNS 150A) and a plain sheet, both signed by the ITO on 30-3-1978.

2. Jurisdiction of the Tribunal to Rehear the Appeal:
The Tribunal addressed a preliminary objection raised by the department, arguing that the Tribunal could not rehear the assessee's appeal as the departmental appeal had already been disposed of. The Tribunal clarified that the department's appeal was limited to the relief of Rs. 48,896 allowed by the AAC in the contract account and did not cover the broader issues raised by the assessee. The Tribunal emphasized that it could only adjudicate on matters that arise in the appeal and that the assessee's appeal on various grounds, including the validity of the assessment order, was still pending and required a separate hearing.

3. Compliance with Section 143(3)(a):
The Tribunal examined whether the ITO complied with section 143(3)(a), which requires the determination of the sum payable by the assessee or refundable to them on the basis of the assessment. The Tribunal noted that the ITO had computed the total income and determined the tax payable on a plain sheet and Form ITNS 150A, both dated 30-3-1978. The Tribunal referred to various case laws, including the J&K High Court's decision in S. Mubarik Shah and the Calcutta High Court's decision in CIT v. Smt. Krishwanti Punjabi, which emphasized the necessity of determining the tax payable within the assessment order. The Tribunal concluded that the ITO had fulfilled the requirement of section 143(3)(a) by determining the tax on separate sheets, even though these were not forwarded to the assessee.

4. Applicability of Section 292B:
The Tribunal considered the applicability of section 292B, which states that an assessment shall not be invalid merely due to any mistake, defect, or omission. The Tribunal observed that the assessment order was made under section 143(3)(a), but there was an omission in forwarding the part of the order containing the tax determination to the assessee. The Tribunal held that this omission was curable under section 292B and did not render the assessment invalid. The Tribunal concluded that the assessment made by the ITO on 30-3-1978 was valid despite the omission.

Conclusion:
The Tribunal partially allowed the appeal, upholding the validity of the assessment order under section 143(3) and confirming that the ITO had complied with the requirements of section 143(3)(a) by determining the tax payable on separate sheets. The Tribunal also clarified its jurisdiction to rehear the assessee's appeal and applied section 292B to cure the defect in the assessment order.