1984 (6) TMI 121 - AT - Income Tax

Summary

Issues:
1. Delay in filing the appeal.
2. Best judgment assessment under section 144 of the Income-tax Act, 1961.
3. Co-operation of the assessee in finalizing the assessment.
4. Power of the Appellate Assistant Commissioner in appeals against best judgment assessments.

Analysis:

Issue 1: Delay in filing the appeal
The appeal in this case was delayed by one day due to the partner responsible for accounts and taxation matters being out of station. Despite the delay, the Appellate Tribunal condoned the delay and admitted the appeal.

Issue 2: Best judgment assessment under section 144
The assessment for the year 1979-80 was made under section 144 of the Income-tax Act. The assessment order indicated that the assessee did not produce books of account, leading to a best judgment assessment. The assessee's attempt to file an application under section 146 was rejected due to a technicality, leaving the assessee with no remedy. The AAC upheld the assessment, stating lack of co-operation by the assessee.

Issue 3: Co-operation of the assessee in finalizing the assessment
In the appeal, the counsel argued that the quantum determined did not reflect the true state of loss and that the accounts were produced before the ITO. The departmental representative defended the best judgment assessment.

Issue 4: Power of the Appellate Assistant Commissioner
The Tribunal referred to the observations of Jaganmohan Reddy, CJ., regarding the power of the Appellate Assistant Commissioner in appeals against best judgment assessments. The Tribunal concluded that the proper order would be to set aside the quantum of income as computed and direct the ITO to recompute the total income considering the books of account and any additional evidence.

The Tribunal allowed the appeal in part, emphasizing the need for a fair and proper recomputation of income based on the available evidence and documents.