Third parties assessment u/s 153(3) - Income Tax - 446/CBDT

INSTRUCTION NO. 446/CBDT Dated: August 17, 1972 Section(s) Referred: 153(3) Statute: Income - Tax Act, 1961 It has come to the notice of the Board that in the case of Smt. Brij Devi of Kanpur Charge, the I.T. Appellate Tribunal found that some income from property assessed in her hands belonged to her son Shri Kuldip Narain Vaish. In giving this finding the I.T. Appellate Tribunal did not follow the provisions of law in Explanation 3 to Section 153(3) which required a hearing to be given to Shri Kuldip Narain. Consequently, the asst. proceedings in the latter case, following the I.T. Appellate Tribunal's order, did not survive the test of appeal. 2. It is desired that you should issue instructions to the I.T. Officers and the Authorised Representatives to see that such a situation is avoided. In all cases before the Appellate Asst. Commissioners or the I.T. Appellate Tribunal, where the question of includibility of a third party's income is involved in appeal, it should be ensured that such third parties are heard/given an opportunity of being heard before any finding regarding ownership of income by them is given. This is a very necessary ingredient for action u/s 150(1) read with Explanation to Section 153 of the I.T. Act, 1961, for assessing such third parties.