1993 (8) TMI 134 - AT - Income Tax

Summary

Issues:
1. Appeal against assessment order under IT Act, 1961 for the asst. yr. 1987-88.
2. Barred by limitation - Service of assessment order and notice of demand.
3. Non-cooperation of assessee and best judgment assessment.

Analysis:
1. The appeal was filed against the assessment order passed under IT Act, 1961 for the assessment year 1987-88. The Assessing Officer initiated penalty proceedings under various sections of the IT Act and made an addition to the income of the assessee based on the purchase of bank drafts in favor of his sons. The CIT(A) dismissed the appeal as barred by limitation, citing the date of service of the assessment order as 2nd Jan., 1987.

2. The contention arose regarding the service of the assessment order, with the assessee claiming that he only became aware of the assessment when the notice for penalty proceedings was served. The postal receipt in the Assessing Officer's file did not bear the signature of the assessee or any date, leading to doubts about the actual service of the assessment order. The appeal was held not barred by limitation based on these discrepancies.

3. The Tribunal found that the assessment order did not deserve to be sustained due to the manner in which it was framed. The Assessing Officer's best judgment assessment was criticized for not meeting the required standards of fairness and justice. The Tribunal referred the assessment back to the Assessing Officer for a de novo assessment, emphasizing the need for a dispassionate examination of the facts and giving the assessee a reasonable opportunity to be heard. The application for stay of demand was dismissed as the assessment had been set aside.