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TMI Blog1988 (8) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... rstating of the business loss in the year 1971-72 had its effect on the carried forward business loss right up to the assessment year 1982-83 and it affected also the assessment year 1978-79 which is now under appeal before us. 3. The Commissioner of Income-tax also found that there was a mistake in allowing carry forward of unabsorbed 80J profits relating to the assessment year 1969-70 because the 7-year time limit had ended with the assessment year 1976-77 and it should not have been carried forward to the assessment year 1977-78. For rectifying these mistakes, the Commissioner of Income-tax issued notice under section 263, considered the reply of the assessee and in paragraph 6 of his order dated 8-1-1985 stated as under : "To set right the mistakes pointed out in the carry forward of business loss of 1971-72 and 80J profits of 1969-70 and 1970-71, I am setting aside the assessments for 1971-72, 1974-75, 1977-78 and 1978-79 with a direction to the Inspecting Assistant Commissioner (Asst.) Range IV to re-do the same, after giving adequate opportunity to the assessee." 4. On receipt of the order of the Commissioner of Income-tax under section 263, the IAC (Asst.) who held ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are not attributable to the publication of books. : Rs. Rent received 500.00 Interest 1,79,159.00 Misc. Receipts 30,964.00 Profit on Sale of Machinery 4,70,320.00 ---------------------- Total 6,80,943.00 ---------------------- If this is excluded, there is no profit attributable to the publication of books to grant deduction u/s 80QQ. Rs. Total Income 3,21,940 ---------------------- Income-tax thereon 1,93,164 Surcharge 9,658 ---------------------- 2,02,822 Less : At paid. 9,240 ----------------------- 1,93,582 Add : Int. u/s. 215 as charged originally 61,664 ---------------------- Total tax payable 2,55,246." 7. The assessee went up in appeal to the CIT(A). The contention was that the order under section 263 passed by the Commissioner dated 8-1-1985 was an order of limited setting aside and the IAC should have confined himself to rectifying mistakes relating to carried forward of loss and section 80J relief and should not have withdrawn deduction allowed under section 80QQ. The CIT(A), after quoting from the order of the Commissioner under section 263 dated 8-1-1985, agreed with the assessee that the IAC had exceeded his powers s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come-tax Officer shall thereupon proceed to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment." Section 251(1)(a) deals with his powers in relation to an appeal against an order of assessment. It speaks of one of the powers being "he may set aside the assessment". In the case of Seth Manicklal Fomra stress was placed on this phraseology to canvass the contention that when an assessment was set aside, the whole assessment stood set aside. All the three cases relied on by the learned Departmental Representative relate to cases which were set aside by the AAC. In all the cases, the High Courts have held that when an assessment stood set aside, then all matters could be considered and fresh items could be brought to tax. In the case of Kundanlal Maru, there was express direction of the AAC that the whole matter was to be re-examined. In all the three cases, i.e. Seth Manicklal Fomra, Kundanlal Maru and Rambilas Chandram, the setting aside was in toto factually of the assessment as far as the phraseology of the appellate orders were concerned. 13. When we come to the provisions of section 263(1), the provision ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tax Officer partially and that, therefore, a question of law arises. Factually, we do not find that there is any partial setting aside of the order of assessment. In paragraph 10 of his order, the Appellate Assistant Commissioner has specifically stated that the assessment is set aside. However, it is stated that since he had already deleted two items only and not decided with reference to the third item relating to cash credit, he has allowed the Income-tax Officer to reconsider. In form, however, he has set aside the entire order of the Income-tax Officer and remitted the matter. The decision cited by learned counsel is also not an authority for the position that while setting aside the entire order of the Income-tax Officer, cannot restrict the enquiry or the points to be considered. Any other construction will only lead to an incongruous position. Though the Appellate Assistant Commissioner gave his findings on various items, his ultime findings, according to learned counsel, is that there should be a fresh enquiry and, therefore, the Income-tax Officer can stick to his earlier view. But, even if he sticks to his earlier view, when it comes up before the Appellate Assistant C ..... X X X X Extracts X X X X X X X X Extracts X X X X
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