9911796707
TMI Blog1988 (10) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... he same was tagged with some other appeal papers and it was not brought to the notice of the ITO. Immediately after noticing this appeal, it is stated, that the ITO took action to file the cross-objection. In the circumstances, it is requested that the delay should be condoned. Taking into account the reasons mentioned in the petition, the delay in filing the cross-objection is condoned. 2. For the assessment year 1980-81 the Income-tax Officer originally prepared a draft assessment order u/s. 144B on 7-7-1981 and forwarded the same to the Inspecting Assistant Commissioner for further action. Subsequently there was a change in the incumbent of the ITO and the new incumbent seems to have asked the assessee whether he requires any further he ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oceedings u/s. 144B is concerned. Thus he held that the earlier draft order became a non-entity in the eyes of law in view of the fresh draft order submitted by the ITO. He thereupon proceeded to give instructions to the second draft assessment order. On the same day he had also given instructions u/s. 144A in respect of certain other items of income to be considered by the ITO. There is no dispute that instructions were issued by the IAC after giving the assessee an opportunity of being heard in the matter. The assessment was ultimately completed on the basis of the instructions from the IAC both u/s. 144A and u/s. 144B. The assessee challenged the assessment made by the ITO on various grounds before the Commissioner of Income-tax (Appeals ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cond draft assessment order is not valid and in directing the ITO to make a fresh assessment only on the basis of the first draft assessment order and the instructions of the IAC in so far as it related to that order. While the assessee relies on the decision of the Delhi High Court in Sudhir Sareen's case, the departmental representative relies on the provisions of sec. 129 of the IT Act and the decisions in Guduthur Bros.' case and H. H. Maharaja Raja Pawer Dewas v. CIT [1982] 138 ITR 518 (MP). 3. We have considered the rival submissions. As stated earlier, originally the Income-tax Officer prepared a draft assessment order on 7-7-1981 and forwarded the same to the IAC for his action. After forwarding the draft assessment order, there wa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the IAC. As long as the assessment is pending and not concluded and it is not barred by limitation, if the ITO is of opinion that the predecessor's draft requires reconsideration in that some more items of income require to be included in the total income of the assessee, we do not think the provisions of the IT Act prohibit him from doing so. Indeed it is his duty to bring all items of income which he considers liable to tax, into the computation of the total income and after following the procedure required to be followed u/s. 144B to complete the assessment within the limitation set by the Act. There is no dispute that the revised draft assessment order was prepared after hearing the assessee. There is also no dispute that the prepara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to be quashed. While disposing of the matter in the above fashion their Lordships have also observed that sec. 144B does not contemplate a second draft order to be prepared and submitted. These observations, in our opinion, have to be understood in the context of the facts obtaining in that case, namely, that the second draft order was the result of certain illegal directions given by the IAC without giving the assessee an opportunity of being heard. The Tribunal, Bombay Bench 'E', in Heritage Estates (P.) Ltd. v. ITO [1985] 11 ITD 519, in similar circumstances and after considering the above decision of the Delhi High Court held that the ITO can revise or rectify a draft order already submitted to the IAC and proceed to submit a fresh dra ..... X X X X Extracts X X X X X X X X Extracts X X X X
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