1992 (3) TMI 153 - AT - Income Tax

Summary

Issues:
1. Whether the CIT (Appeals) has the power to enhance an assessment made under section 144B(5).
2. Whether the entire assessment should have been set aside or only the issue of deduction of short-term capital loss.
3. Whether the Commissioner (Appeals) should have decided the issue himself without remitting it to the Assessing Officer.

Analysis:
1. The appeal challenged the order of the CIT (Appeals) setting aside the assessment to consider enhancing it. The assessee argued that the CIT (Appeals) cannot enhance an assessment made under section 144B(5), citing precedents like East Coast Marine Products case. The revenue contended that even assessments under section 144B are amenable to appellate jurisdiction for enhancement, relying on various judgments. The Tribunal noted that the assessment was made under section 144B(5) based on the IAC's direction, and the Assessing Officer had not failed to consider the claim for deduction properly. Therefore, the CIT (Appeals) could not entertain the enhancement petition as the ITO was bound to follow the direction, limiting the CIT (Appeals)'s power to enhance the assessment. The Tribunal concluded that the issue of gathering subsequent information for reassessment falls outside the scope of enhancement under section 144B(5).

2. The Tribunal considered whether the entire assessment should have been set aside or only the issue of deduction of short-term capital loss. The revenue argued that the Assessing Officer could confine the reassessment to the issue remitted back to him. However, the Tribunal found that the CIT (Appeals) was not justified in setting aside the entire assessment with a direction to reconsider the issue of enhancement. The Tribunal set aside the CIT (Appeals)'s order and restored the appeal for disposal on the grounds raised by the assessee.

3. The Tribunal addressed the issue of whether the Commissioner (Appeals) should have decided the issue himself without remitting it to the Assessing Officer. The Tribunal noted that the CIT (Appeals) should not have entertained the enhancement petition, as the Assessing Officer had not failed to consider the claim for deduction properly. The Tribunal concluded that the CIT (Appeals) was not correct in setting aside the assessment with a direction to reconsider the issue, and therefore, the appeal was restored for disposal on the grounds raised by the assessee.