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TMI Blog1991 (7) TMI 136X X X X Extracts X X X X X X X X Extracts X X X X ..... d to be set off in subsequent years. But with regard to the quantification of such loss the CIT(A) held that the assessment appeared to have been made in hurry without calling for and examining the reconciliation statement and thus without making proper enquiry and investigation into the claim for loss made in the revised return. He, therefore, set aside the assessment and directed the ITO to reframe the assessment according to law after giving proper opportunity of being heard to the assessee. Aggrieved against such directions of the CIT(A) the assessee has preferred its appeal. 2. When the appeal was taken up for hearing it was pointed out that Revenue has filed its cross objection against the very maintainability of the appeal on the grounds of limitation and making wrong person as respondent in the appeal. Since the grounds raised in the cross objection of Revenue were in the nature of preliminary objections against the maintainability of the appeal itself, the parties were first heard on that. 3. The learned D.R. did not press ground No. 1 of the cross objection which related to incorrectly making ITO ; Company Circle XV, New Delhi as respondents in place of ITO, Company C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the Commissioner, as the case may be. The meaning of the expression 'communicated to the assessee' is required to be understood in right perspective. The expression is nearer in meaning to 'intimation of the order' than to 'service of the order'. The Underlying purpose of the expression is to inform the assessee that his appeal has been disposed of in a particular way. That object may be achieved by delivery of the copy of the order to him or to his authorised agent or representative or by sending the same through post. In either case it would amount to 'communication of the order' to the assessee. The starting point of limitation prescribed under sec. 253(3) is thus, the date of the knowledge of the order, sought to be appealed against, to the assessee. We should not be misunderstood as laying down that communication of the order to the assessee by sending a copy of the order to him is not necessary. What we want to convey is that communication of the order may be made either by delivery of the copy of the order itself to the assessee or his authorised agent-or representative or by any other suitable mode which give a clear information and knowledge to the assessee that his app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to IV appealed against or if received might have lost or misplaced the same but who might have acquired the knowledge of the order from a mode other than communication of the order by delivery of the copy of the order to him by the authority passing the order may obtain a certified copy thereof under rule 49 and can file an appeal u/s. 253. In computing the period of limitation in such a case the period spent by him in obtaining the certified copy from the authority concerned shall have to be excluded. But such exclusion of period would not be required in a case where communication of the order has been made to him by delivery of the order to him or his authorised representative, either in person or by post. It follows, therefore, that the Legislature has not purposedly qualified the expression "communicated to the assessee" with the words "by delivery of the copy of the order" as exclusion of other modes of communicating the order to the assessee was not intended. We, therefore, hold that starting point of limitation prescribed under sec. 253(3) is knowledge of the impugned order to the assessee, whether such knowledge is acquired by him by delivery of the copy of the order to him ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... write to the ITO requesting him to expedite the reassessment proceedings as per directions given in CIT(A)'s order. This conclusion is further strengthened by the other material on record. 12. At page 34 of the paper book there is another letter of the assessee which is dated12-10-1987and which was written in answer to ITO's letter dated7-10-1987. In this letter the assessee has mentioned about the directions of the CIT(A) to the ITO regarding the necessity of filing the reconciliation statement by the assessee. In this letter the assessee had not complained that CIT(A)'s order was not communicated to him. The alleged fact of acquiring knowledge of CIT(A)'s order on29-9-1987was also not mentioned by the assessee. It is in a subsequently written letter dated 19-10- 1987 that the assessee has vaguely mentioned that it had acquired knowledge Of CIT(A)'s order from a letter from ITO, Company Circle XXI. No date of acquisition of such knowledge and/or of the alleged letter of the ITO has been mentioned in this letter. Obviously, that letter of the ITO would not have been dated7-10-1987. Or if it was that, the same was not produced. 13. Again, as stated earlier Rule 9 of the Appellat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess the assessee is able to show "sufficient cause" to file the appeal late. 16. It is an admitted position that the assessee has filed no application showing any sufficient cause and seeking condonation of the delay in filing the appeallate. During the course of hearing we enquired of Mr. Agarwal if the assessee intended to move an application for the purpose whereupon W. Agarwal sought permission of the Bench to address it on the point verbally without moving any application and supporting the same with an affidavit. Though guideline No. 7 issued by the Tribunal in its letter referred to above stresses upon the necessity of such an application duly supported by an affidavit, yet we dispensed with the said requirement in view of necessity of doing substantial justice to the assessee. In our opinion, sec. 253(3) empowers the Tribunal to condone the delay even suo mto in suitable cases. We, therefore, heard the parties over the point even in the absence of an appliication for condonation of delay from the assessee. 17. On the point of "sufficient cause" Mr. Agarwal reiterated the same arguments by again stressing that the knowledge of the impugned order was acquired by the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the merits of assessee's grievance against the order under appeal, which we heard on merits with a view to not only finding the alleged injustice likely to be caused to the assessee by allowing the impugned order to remain in force but also with a view to avoid the necessity of hearing the appeal on merits, in case the opinion of the Tribunal on the point of limitation does not find favour with the Hon'ble High Court on a question of law in that behalf referred to it, if such a situation ever arose. 21. It may be refreshed to memory that in the original return the assessee had declared a positive income of Rs. 1,05,934. But in the revised return filed after the lapse of about 1 1/2 years the income was returned at a negative figure of Rs. 15,76,177. He called for the books of assessee'sCochinoffice but the same were not produced. He required the attendance of the Director of the assessee by issuing summons u/s. 131, but not appearance was put in. It was under these circumstances that he made best judgment assessment u/s. 144 of the Act In doing so, the ITO accepted the loss returned by the assessee and determined the same at Rs. 11,14,956 but he refused to carry forward the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lso direct the ITO to do that, if so required, and for that purpose he may set aside the assessment and refer the case back to the ITO for making a fresh assessment in accordance with his directions after making such further enquiry, as may be necessary. That is also the ratio of the various decisions cited by the parties. 24. In the case before the Supreme Court in Raj Bahadur Hardutroy Motilal Chamaria's case the AAC was not found having jurisdiction to assess a source of income which was not disclosed either in the return filed by the assessee or in the assessment order. It was on such facts that it was held that the powers of the AAC restricted to the source of income which had been subject-matter of consideration by the ITO from the point of view of taxability. It was explained that in that context "consideration" did not mean "incidental" or "collateral" examination of any matter by the ITO in the process of assessment. There must be some thing in the assessment order to show that the ITO applied his mind to the particular subject-matter or the particular source of income with a view to its taxability and not to any incidental connection. 25. In the case before the Gujara ..... X X X X Extracts X X X X X X X X Extracts X X X X
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