Draft assessment order in certain cases to the I.A.C u/s 144-B of the Income-tax Act, 1961. - Income Tax - 1031/CBDT

INSTRUCTION NO. 1031/CBDT Dated : December 20, 1976 Section(s) Referred: 144B Statute: Income - Tax Act, 1961 Section 144-B of the Income-tax Act, 1961 as introduced by the Taxation Laws (Amendment) Act, 1975 with effect from 1st January 1976, provides for forwarding the draft assessment order in certain cases to the I.A.C. 2. Sub-section (4) of section 144-B reads as under:- "If any objections are received the ITO shall forward the draft order together with the objections to the I.A.C. and the I.A.C. shall after considering the draft order and the objections and after going through (wherever necessary) the records relating to the draft order, issue in respect of matters covered by the objections, such directions as he thinks fit for the guidance of the ITO to enable him to complete the assessment. Provided that no directions which are prejudicial to the assessee shall be issued under this sub-section before an opportunity is given to the assessee to be heard." 3. It will thus be seen that sub-section (4) requires the I.A.C. to issue direction to the ITO after considering the draft order and the objections of the assessee thereto. Further, an opportunity of being heard shall be given by the I.A.C. to the assessee wherever directions prejudicial to him are given. Sub-section (5) of section 144-B lays down that every direction issued by the IAC under sub-section (4) shall be binding on the ITO. 4. A question has been raised whether the assessee is entitled to get a copy of the directions issued by the IAC to the ITO. It will be noticed that once the assessee has been given an opportunity of being heard by the I.A.C., there is no provision for reconsidering the directions issued. The entire procedure laid down under sub-section (4) of section 144-B of forwarding a draft order to the IAC and of a hearing to be given by the I.A.C. before any directions prejudicial to the assessee are issued, is quasijudicial in nature. Even though, there is no specific provision in the Act to give a copy of the directions issued by the I.A.C to the assessee, the principles of natural justice would require that the assessee is given a copy of such directions. 5. The Board, therefore, desire that a copy of the directions issued under sub-section (4) of section 144-B by the IAC should be furnished to the assessee. It is further clarified that the validity of assessments which have already been completed will not be collected, rectified on the ground that a copy of the directions issued by the IAC to the ITO was not supplied to the assessee. However, even in completed assessments a copy of the directions may be supplied to the assessee if he makes a specific request to that effect.