9911796707
TMI Blog2010 (11) TMI 685X X X X Extracts X X X X X X X X Extracts X X X X ..... 0 - YATINDRA SINGH. PRAKASH KRISHNA, JJ. Judgment: 1. The main question involved in this reference is, Whether under section 144B of the Income-tax Act, 1961 (the Act) the draft assessment order was required to be sent to, the Inspecting Assistant Commissioner (IAC) having territorial jurisdiction (or administrative control) over the Income-tax Officer (ITO) ; or the Inspecting Assistant Commissioner, who was also conferred powers and functions (jurisdiction) of the Income-tax Officer jurisdiction under section 125A of the Act. The facts Some observations 2. There is a difference in the dates in the statement of the case as well as the orders passed by the different authorities. The statement of the case mentions one set of dates ; whereas the orders indicate another set of dates. The counsel for the parties are also not able to make statements regarding the correct dates. Luckily, it does not affect the decision of the case. 3. In the judgment, we have indicated the date that appeared to be correct and the other date (either in the statement of the case or in the different orders) are mentioned in the brackets. We say no more, except, greater care ought ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ere) on the merits to the assessee) ; The assessee was an industrial company ; and It should be taxed accordingly. The assessee filed an appeal before the Income-tax Appellate Tribunal, Allahabad Bench, Allahabad (the Tribunal). It was referred to a Special Bench. The Special Bench, vide its order dated March 6, 1985, held that : Once concurrent jurisdiction is conferred on the Inspecting Assistant Commissioner then he is deemed to have exercised the powers and per-formed the functions vested in him under section 125A of the Act ; In any case, the Inspecting Assistant Commissioner-Allahabad had exercised the powers and performed the functions vested in him under section 125A of the Act ; In view of section 144B(7) the provisions of section 144B were not applicable ; The assessment order was barred by time and assessment order was to be set aside. 12. On the aforesaid finding, the appeal of the assessee was allowed. This judgment of the Special Bench of the Tribunal is reported in Saraya Sugar Mills (P) Ltd. v. ITO [1985] 25 ITJ (All) 196 ; [1985] 13 ITD 163 (All) [SB]*. 13. The Income-tax Department (the Department) filed an application under s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and given by the assessee only to the Income-tax Officer and not to the Inspecting Assistant Commissioner till the stage of passing of the order dated March 27, 1980, the Tribunal was not justified in overlooking this fact and coming to the conclusion that the Inspecting Assistant Commissioner has exercised the powers and performs the functions of the Income-tax Officer ? (iv) Whether the assessee's case is not covered under section 144B(7) of the Act ? (v) Whether every page of the assessment order dated March 27, 1980 having been signed and sealed by the Income-tax Officer the said order dated March 27, 1980 was a valid order in view of section 292B of the Act ? (vi) Whether even assuming without admitting that the order dated March 27, 1980 was not a valid order under section 143(3) the Tribunal instead of annulling the order should have set aside the case with a direction to the Income-tax Officer to treat the order dated March 27, 1980 as a final order ? First question : Reference to Inspecting Assistant Commissioner having concurrent jurisdiction-Proper 15. Sections 125 and 125A of the Act were titled "Powers of Commissioner respecting specified areas, cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... se were binding upon him (see section 144B(5) of the Act). 21. The intention of the Legislature behind section 144B appeared to be that in case of large variations, the case should be decided under the guidance of a senior officer and an assessee might also object to the same before it was finalised. This was for the benefit of an assessee to save him from unnecessary harassment. It was for this reason that his objections were invited and the draft order was required to be sent to the Inspecting Assistant Commissioner. It was also for safeguarding the interests of the Revenue: an experienced and senior officer was less likely to commit a mistake. 22. Similar intention was behind section 125A of the Act. It was for this reason that the Inspecting Assistant Commissioner, a higher officer, was given concurrent jurisdiction. He could issue binding directions and guidelines. 23. If the intention of the Legislature was as indicated in the preceding paragraphs, then it seems strange that an Income-tax Officer should work under the guidelines and directions of one Inspecting Assistant Commissioner and to get the draft order finalised by another Inspecting Assistant Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llahabad not only issued guidelines specific to the case of assessee, but the guidance dated November 23, 1979 states : "I will assume jurisdiction over the case and complete the assessment." It shows that he had exercised the powers as well as functions of the Income-tax Officer-Gorakhpur ; (i) Case had to be referred 28. It is correct that section 125A of the Act was applicable and the Inspecting Assistant Commissioner-Allahabad had issued the guidelines but this does not mean that section 144B of the Act was not applicable ; or its applicability was excluded. 29. Section 144B(1) of the Act was titled "Reference to Inspecting Assistant Commissioner in certain cases". It provided that in case the variation in income or loss in the assessment under section 143(3) of the Act was more than the amount fixed by the Board then, The Income-tax Officer was to prepare the draft order and send it to the assessee ; and If the assessee objected to the same then the Income-tax Officer was to send the draft order along with the objections to the Inspecting Assistant Commissioner for his directions and guidance. 30. Sub-sections, namely, (1) and (4) of section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed the functions of an Income-tax Officer in this case ? (ii)(b) : IAC-Allahabad had not performed the functions 36. We have gone through the guidelines dated November 8, 1979 as well as November 23, 1979*. These are merely guidelines to the Income-tax Officer- Goprakhpur as to how the assessment of the assessee might be completed. It nowhere indicates that the Inspecting Assistant Commissioner- Allahabad exercised the power or performed the functions of the Income-tax Officer-Gorakhpur. 37. The Inspecting Assistant Commissioner-Allahabad did say that he would pass an assessment order but he chose not to pass it. The assessment order was ultimately passed by the Income-tax Officer-Gorakhpur and not the Inspecting Assistant Commissioner-Allahabad. Had the Inspecting Assistant Commissioner-Allahabad done so, then the matter would have different. 38. In our opinion, merely because concurrent powers were conferred upon the Inspecting Assistant Commissioner or he issued the guidelines, did not lead to the conclusion or meant that he exercised the powers or performed the functions of an Income-tax Officer ; in this case, the Inspecting Assistant Commissioner-All ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... irect that (a) the powers conferred on the Income-tax Officer by or under this Act shall, in respect of any specified case or class of cases or of any specified person or class of per-sons, be exercised by the Inspecting Assistant Commissioner.(b) such of the functions assigned to the Income-tax Officer by or under this Act, as are specified in any such order may, in respect of any specified area, case or class of cases, person or class or persons or class of incomes, be performed by an Inspector of Income-tax or any member of the ministerial staff, subordinate to the Commissioner or any other income-tax authority subordinate to him, and specified in such order, subject to such conditions, restrictions or limitations as may be specified therein :Provided that the Commissioner shall not, unless he is authorised in this behalf by the Board by general or special order in writing, make an order under clause (b) in relation to the functions of an Income-tax Officer mentioned in the following provisions of this Act, namely, sections 131, 132, 132A, 132B, 140A, 143, 144, 146, 147, 148, 162, 163, 171, 172,174, 175, 176, 177, 178, 183, 184, 185, 189, 221, 222, 226, 228, 228A, 253, 271 to 27 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the income or loss returned which is prejudicial to the assessee and the amount of such variation exceeds the amount fixed by the Board under sub-section (6), the income-tax Officershall, in the first instance, forward a draft of the proposed order of assessment (here after in this section referred to as the draft order) to the assessee.(2) On receipt of the draft order, the assessee may forward his objections, if any, to such variation to the Income-tax Officer within seven days of the receipt by him of the draftorder or within such further period not exceeding fifteen days as the Income-tax Officer may allow on an application made to him in this behalf.(3) If no objections are received within the period or the extended period aforesaid, or the assessee intimates to the Income-tax Officer the acceptance of the variation, the Income-tax Officer shall complete the assessment on the basis of the draft order.(4) If any objections are received, the Income-tax Officer shall forward the draft order together with the objections to the Inspecting Assistant Commissioner and the Inspecting Assistant Commissioner shall, after considering the draft order and the objections and after going th ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
