1979 (4) TMI 52 - AT - Income Tax

Summary

Issues:
Jurisdiction of the assessing officer to frame reassessment under section 143(3) of the Income Tax Act, 1961 when the return was filed under the Indian Income Tax Act, 1922.

Detailed Analysis:

1. The appeal was directed against an order passed by the AAC of IT, Ambala Range, Ambala regarding an assessment under section 143(3) of the Income Tax Act, 1961 for the assessment year 1960-61.

2. The primary contention of the assessee was that the assessing officer was incompetent to frame reassessment under section 143(3) of the Act when the return was filed in compliance with a notice under section 22(2) of the Indian Income Tax Act, 1922, and the assessment was framed under section 23(3) of the old Act.

3. The facts revealed that an assessment under section 23(3) of the old Act was initially framed in response to a notice under section 22(2) of the old Act. Subsequently, the assessment was set aside by the AAC to be framed de novo by the assessing officer.

4. The assessing officer, while framing reassessment as per the AAC's directions, proceeded to assess under section 143(3) of the Act, increasing the assessment amount from the earlier figure.

5. The assessee contended that as per section 297(2)(a) of the Act, assessment under section 143(3) could not be made since the return was filed under the old Act and the assessment was also framed under the old Act.

6. The Revenue referred to certain judgments, but the Tribunal found them not applicable to the present case. The Tribunal emphasized the importance of correctly invoking the relevant provisions of law and highlighted the distinction between passing an order under a wrong section and taking proceedings under the wrong Act.

7. Citing various relevant authorities, the Tribunal held that the reassessment framed under section 143(3) of the Act was invalid and therefore cancelled, ultimately allowing the appeal in favor of the assessee.

8. Consequently, the Tribunal allowed the appeal, upholding the contention that the reassessment under section 143(3) of the Act was not valid in the given circumstances.