9911796707
TMI Blog1983 (10) TMI 149X X X X Extracts X X X X X X X X Extracts X X X X ..... on amounting to Rs. 33,706 for the assessment year 1974-75 and Rs. 82,901 for the assessment year 1975-76. Later, the assessee filed a letter dated 15-9-1975 claiming that for earning the commission, the assessee had paid salary of Rs. 6,000 to Fakruddin Abdul Hussain and that amount should be deducted in each of the assessment years for computing the income. The ITO made assessments ex parte under section 144 of the Income-tax Act, 1961 ('the Act'), because there was no response to his notices and in such assessments be disallowed the claim for deduction by stating that since the entire income has been assessed under the head 'Salaries', the only deduction allowable was under section 16 of the Act and no other deduction should be allowed. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... paid to Shri Fakruddin Abdul Hussain out of the commission receipts have been allowed as a deduction. But, then in those assessment years section 16 did not provide for standard deduction but a regular deduction of expenditure incurred for earning the salary income. Therefore, the decision given for the earlier assessment years cannot be directly applicable on the facts of these assessment years. However, the question remains whether the commission income of the assessee was only the net income after the deduction of the salary paid to Shri Fakruddin Abdul Hussain or whether the gross commission income should be assessed as salary under the head 'Salaries'. This aspect has not been considered by the authorities below. We notice that though ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uced for excluding the time taken for the disposal of the application under section 146 in computing the period of limitation for filing the appeal. These provisions indicate that the limitation prescribed under section 146 is not merely directory but mandatory and the ITO is expected to dispose of the application within the period of ninety days prescribed therein. It cannot be said that the appeal of the assessee against the best judgment assessment is stalled for ever by the ITO not disposing of the application under section 146. Of course it is possible to say that this period of limitation prescribed under section 146 being a provision for the benefit of the assessee, it could be waived by him. But to what effect ? Such a waiver can be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld not only be required that application under section 146 is filed within the period of limitation but also ensure that whether the limitation prescribed is not complied with the assessments got automatically reopened so that the ITO may make fresh assessment in accordance with the law after giving opportunity of being heard to the assessee. It follows that if an appeal has been filed against the assessment itself, the AAC can on the expiry of the limitation for the ITO to pass an order under section 146 and without waiting for another appeal against an order under section 146 declare that the assessment is cancelled and direct the ITO to make a fresh assessment. From this point of view also, it appears to us that the only reasonable impli ..... X X X X Extracts X X X X X X X X Extracts X X X X
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