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TMI Blog1986 (2) TMI 134X X X X Extracts X X X X X X X X Extracts X X X X ..... IAC under s. 144B of the IT Act. The assessee s objections was that s. 144B could not apply to assessment made under s. 144. Therefore, the forwarding of the proceedings was bad in law. The IAC not only accepted this contention, he also returned the proceedings to the ITO. Subsequently, the ITO served a challen dt 3rd April, 1984 along with a covering letter that the assessment had been completed on 28th Nov., 1979 and challan was being sent for depositing the amount due under that assessment. 2. The assessee went in appeal to the CIT(A) and contended what the order dt. 28th Nov., 1979 was not an assessment order since no tax was determined along with the order as required by s. 143(3)(a) of the IT Act, therefore, the challan forward on 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... demand and merely because the notice of demand was issued after the period of limitation, the assessment was not barred by, limitation. Reliance was placed upon a decision of the Gauhati High Court in Ramanand Agarwala vs. CIT (1984) 39 CTR (Gau) 110 : (1985) 151 ITR 216 (Gau). 4. After carefully considering all the facts and circumstances of the case we are of the opinion that the present assessment orders cannot be considered to be strictly in accordance with law. The first order dt. 28th Nov., 1979 was not on assessment order in as much as it was only a draft of an assessment order suggesting a variation proposed to the income of the assessee and inviting assessee's objections thereto for being furnished to the IAC. No amount of tax du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... It has been held by the Hon'ble Supreme Court in Kapoorchand Srimal vs. CIT (1981) 24 CTR (SC) 345 : (1981) 131 ITR 451 (SC) that an appellate authority has the jurisdiction as well as the duty to correct all errors in the proceedings under appeal and to issue, if necessary, appropriate directions to the authority against whose decision the appeal is preferred to dispose of the whole or any part of the matter afresh, unless forbidden from doing so by statute another in J.P. Sharma Co. vs. CIT (1984) 40 CTR (Raj) 346 : (1985) 151 ITR 131 (Raj) it was held by the Rajasthan High Court itself that the bar created by the provisions of s. 275 of IT Act 1961 refers only to the initial order and if an order of penalty is passed on account of dire ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sued or taken or purported to have been furnished or made or issued or taken in pursuance of any of the provisions of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake defect or omission in such return of income assessment, notice, summons or other proceedings if such return of income, assessment, notice, summons or other proceeding is in substance and effect in conformity with or according to the intent and purpose of this Act." The mistake of the ITO in forwarding the proceedings to IAC was there, but it cannot be fatal to the proceedings altogether. The irregularity can only be correct because the purport and intention of the ITO has been to act according to the intent and purpose of the IT Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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