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TMI Blog1991 (4) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... 4 1974-75 1975-76 ----------------------------------------------------------------------- Rs. Rs. Rs. Escaped turnover 90,555 93,500 96,915 Tax 3,169 3,740 3,877 Additional tax 158 187 194 Penalty under section 16(2) of the Act 4,753 5,610 5,815 ----------------------------------------------------------------------- After giving due opportunity, by orders dated 15th December, 1979, the proposals were confirmed and assessments made on that basis. 2.. The petitioners filed three appeals before the first appellate authority objecting to the assessment on the escaped turnover in question. While considering the appeals, the appellate authority found that the assessing authority, at the time of assessing the escaped turnover, did not properly analyse the accounts, that huge undisclosed purchases and their impact on the actual extent of their business activities were omitted to be considered and consequently it required a further detailed probe and proper working out of the quantum of turnover actually suppressed by the petition ers. On that view, while setting aside the order of the assessing authority dated 15th December, 1979, the appellate authority directed the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e petitioners and submitted that it was well within the powers of the appellate authority to issue such directions as the appellate authority thinks fit while ordering remand of the case and that no exception could be taken to the course adopted by the appellate authority and the Tribunal in this case. 5.. On behalf of the petitioners, it was submitted that the power to assess the escaped turnover vests with the assessing authority subject to certain conditions and the appellate authority exercising powers under section 31 of the Act can neither do it itself nor can it direct the assessing authority to do something which the appellate authority or the assessing authority cannot themselves do. In other words, it was also submitted that the order of remand can only have the case or proceedings restored to the file of the assessing authority to the stage at which it was prior to the passing of the order and that being the position it would not be possible for empowering the assessing authority to recommence the whole proceedings afresh in respect of turnover or aspect which was not the subject-matter of earlier preassessment notice which culminated in an order which ultimately came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be seen that in that case the court was concerned mainly on the scope of the direction issued in that particular case and context of the revisional power exercised and not as a matter of general principle of invariable applicability. 7.. In Mohd. Ahsan Wani v. Commissioner of Income-tax [1977] 106 ITR 84, the Jammu and Kashmir High Court was considering a case in the light of the scope of the appellate authority's power under section 251 of the Income-tax Act, 1961, and in the context of the scheme underlying those provisions came to the conclusion that the said appellate authority exercising power under section 251 of the Income-tax Act, 1961, though was legally competent to set aside the order of assessment and direct the Income-tax Officer to make a fresh assessment with regard to income from sources which had been considered by him earlier, he was not competent to direct the Income-tax Officer to make assessment in respect of income from other sources which were not considered by the Income-tax Officer nor on the basis of material which had not been considered by the Income-tax Officer. Reference was also made to the decisions reported in [1967] 66 ITR 443 (SC) (Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tate that a particular power is vested only with a particular authority specified under the Act with certain limitations but another thing to read into the exercise of a statutory power conferred upon the competent authority limitations from outside and de hors the very provisions themselves. So long as the scope of a particular power conferred upon a specified authority under a particular provision of the Act permits that authority to do a particular thing, limitations aliunde cannot be imported on such exercise of its powers. Adopting such a course would amount to the courts themselves legislating and not confining themselves to their accredited task of interpreting and laying down the law. As a matter of fact, in our view, even the decisions relied upon in the said judgment do not warrant such an extreme proposition of law. 9.. In T.V. Sundaram Iyengar Sons (P.) Ltd. v. State of Madras [1970] 25 STC 160, a Division Bench of this Court had an occasion to consider directly a question relating to the scope and extent of the powers of the appellate authority under section 31(3)(a)(i) of the Act. The Division Bench, while dealing with the said aspect, held as follows: "The seco ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to by the assessee in the appeals and thus enhance the assessment by taking the view that they are not works contracts but sales of goods. It is not disputed that unlike under the Madras General Sales Tax Act, 1939, the appellate powers of the Appellate Assistant Commissioner as well as the Tribunal under the Madras General Sales Tax Act, 1959, include the power to enhance the assessment in disposing of an appeal. But it is urged that the power of enhancing in appeals can only be exercised within the limits of the assessment which is the subject-matter of the assessment that is objected to by the assessee in his appeals. In our opinion, there is no justification for this narrow view of the scope of the power to enhance the assessment in disposing of an appeal. If this view is to prevail, the content of the power will be reduced to almost nothing. It is difficult to conceive of cases of enhancement of assessment confined to the limits of that part of the order which is objected to and appealed against by the assessee. The words 'enhance the assessment' in section 31(3)(a)(i) should, as it appears to us, be given their full scope. Section 31(1) does not speak of an assessment but o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The Division Bench further elaborately considered the inherent differences in the scheme underlying the provisions of the Income-tax Act, and the Tamil Nadu General Sales Tax Act and came to the following conclusion: "We are, therefore, of the view, as we have already indicated, that the Appellate Assistant Commissioner was competent, in disposing of the appeals filed by the assessee, to take a view different from that of the Assessing authority on the nature of the bus-body-building contracts which was not objected to by the assessee in his appeal, and bring them to tax as sales of goods and thus enhance the assessment. There remains the last ground of the assessee relating to limitation. On this question we think the Tribunal took the correct view. The Appellate Assistant Commissioner in enhancing the assessment did not act under section 16 as a case of escaped assessment but he was using his powers under section 31(3)(a)(i) of the Act. On that view, the enhancement is not open to attack as out of time." 11.. A Division Bench of this Court in a decision reported in Natarajan v. Deputy Commercial Tax Officer [1981] 48 STC 193, while considering the scope of powers under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... over which had escaped assessment to tax. 12.. It is also necessary for us to consider as to whether there is or there is not any distinction between suo motu exercise of power under section 16(1) of the Act in respect of an escaped turnover and assessment to be remade pursuant to a direction of the appellate authority. In our view, there is a vital distinction. In Sales Tax Officer v. Pathrose [1979] 44 STC 223, a Division Bench of the Kerala High Court had an occasion to consider the issue under the provisions of the Kerala General Sales Tax Act and it expressed the view that when once the assessment proceedings have been completed and carried up in appeal to the appellate authority and remanded back to the Sales Tax Officer for fresh assessment, the resultant proceedings are only a continuation of those originally started proceedings and not a recommencement of fresh proceedings. In State of Tamil Nadu v. Mohamed Sulaiman Co. [1980] 46 STC 151 (SC), the assessee filed an appeal against an order passed by the assessing authority on the ground that the order was not preceded by a pre-assessment notice and, therefore, it was invalid. The appellate authority, however, exercised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sal adopted by the assessing authority which initiated proceedings under section 16 of the Act well within the period of limitation, the appellate authority considered it to be necessary to set aside the order of the assessing authority and remit the matter for consideration afresh in the light of and in accordance with the directions contained in the order passed on appeal. The power of the appellate authority under the scheme of the provisions contained in section 31 of the Act has been rightly construed to be wider and inclusive of not merely to confirm, reduce, or annul but also to enhance the assessment or the penalty. To achieve such a purpose, it was well within its powers as the appellate authority to pass such other orders as he may think fit and such a provision, in our view, constitutes conferment of sufficient jurisdiction on the said appellate authority to order a remand to the authority below and when such directions are issued by the appellate authority by virtue of its subordination in the official hierarchy, the authority below has no other option but to obey. Consequently, we consider the objection raised by the assessee at this stage to be not only unjustified bu ..... X X X X Extracts X X X X X X X X Extracts X X X X
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