Appellate Assistant Commissioners in his charge. - Income Tax - 146/CBDT

INSTRUCTION NO 146/CBDT, Dated: February 2, 1970 I have to invite a reference to the attached copy of Circular letter No.R.A.(1)(3 to 5/69-70 dated the 7th October, 1969 addressed by the CIT, Kerala to the Appellate Assistant Commissioners in his charge. You are requested to bring this to the notice of the Appellate Assistant Commissioners in your charge also for observance of the procedure mentioned in para 2 of the enclosed circular letter. CIRCULAR In a recent case decided by the Appellate Tribunal, Cochin Bench, I found that the Appellate Assistant Commissioner had remanded the case to the ITO for 3 assessment years without passing a written order of remand. The ITO after detailed enquiries submitted a remand report to the Appellate Assistant Commissioner, which, among other things, mentioned about certain sales tax assessment orders, and also contained a suggestion that in the light of the materials gathered, there was scope for enhancement of the income. The Appellate Assistant Commissioner dismissed the appeals but there was no mention in the appellate order about the ITO's remand report or the plea for enhancement. The assessee appealed to the Tribunal and the Authorised Representative drew the attention of the Tribunal to the remand report and submitted that in the light of materials gathered by the ITO the estimates made by him were reasonable. However, the assessee's representative objected to the admission as evidence of the matters dealt with in the remand report, since according to him, the Appellate Assistant Commissioner had not at all relied on the remand report and had not even mentioned that a remand report was given by the ITO. The Tribunal agreed with the assessee and considered that the remand report of the ITO had not having been considered by the Appellate Assistant Commissioner, in his order, and the Department not having taken up the matter further after the AAC's order, the remand report of the ITO could not be considered. The Tribunal deleted the additions made by the ITO. 2. In order to avoid such embarassing situations, the Appellate Assistant Commissioners are requested to pass remand orders in writing and send copies of the ITO's remand reports to the assessees and obtain their replies before passing the final orders. The Appellate Assistant Commissioners are also requested to mention in their appellate orders about the remand reports received from the ITO's. When requests for enhancement are made by the ITO's the Appellate Assistant Commissioners should give a definite finding accepting or rejecting the request. If this procedure is followed, there will be no room for the assessee at a alter stage to plead ignorance of the ITO's request for enhancement or the remand proceedings.