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TMI BlogJurisdiction of Commissioners of Income-tax (Appeals)--Section 246(2) of the I.T. Act--Board's notification No. 2381* dated 7-7-78, and notification No. 2845+ dated 4-6-79--Clarification regardingX X X X Extracts X X X X X X X X Extracts X X X X ..... 4-6-79--Clarification regarding. Certain jurisdictional problems in regard to the interpretation of the provisions of section 246(2) of the I.T. Act and of the corresponding sections of other Direct Tax Acts, and also in regard to the scope of the Board's Notifications issued under section 246(2)(i) have been referred to the Board for clarification. They are posited in the form of questions and answered here under:- Question 1 (a) Who is to rectify any mistake in an order passed by the AAC before the appointed day, i.e., 10-7-78, in a case of a non-company-assessee where the total income/loss exceeded Rs. 1 lakh, or in an order passed by the AAC before 1-6-79, in the case of a company? (b) Who is to comply with the requirements of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pointed day would arise after the said date. Those words in section 39(2) of the Finance Act, 1977, would cover cases where the rectification application had been filed after the appointed day or the AAC had issued the show cause notice on his own after that date. As for rectification application filed or show cause notice for rectification issued before the appointed day, the normal rule in section 154 that the authority may amend any order passed by him would apply and the same AAC or any other AAC presently having jurisdiction in respect of the concerned case of the assessee may amend the previous order. Likewise section 39(2) of the said Finance Act would cover the cases where the Tribunal's order, setting aside the AAC's order wholly ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on, development rebate, etc.? (b) Who is to deal with an appeal in the case of a non-company assessee where the business loss of the concerned year is less than Rs. 1 lakh, but the amounts of brought forward loss, unabsorbed depreciation, unabsorbed development rebate or deficiency under section 80J(3) of that year, if aggregated with the business loss exceed Rs. 1 lakh? Answer: (a) Under sections 143 and 144 the ITO makes the assessment of the total income or loss. Clause (e) of section 246(2) and item (ii) of the notification refer to cases where the assessee objects to the amount of income assessed or to the amount of loss computed in such order of assessment. They, therefore, refer to the total income which is determined after set-off ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mestic companies whose assessed total income or loss exceeded Rs. 5 lakhs and the cases of assessees (other than a company) with assessed total income or loss exceeding Rs. 1 lakh as "such person or classes of persons" who would file appeal to the CIT (Appeals) against an order of the ITO specified in items (i), (ii) and (iii) of the notification (No. 2381** dated 7-7-78). There is no further stipulation that an appeal against an ancillary order like penalty, rectification, etc., mentioned in clauses (d) to (o) of sub-section (1) of section 246 would lie to the CIT (Appeals) only if the assessment for that very assessment year had been challenged in appeal before the CIT (Appeals). In other words, an appeal against any ancillary order menti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been excluded for that purpose from sub-section (1) thereof. If any order is not appealable within the provisions of sub-section (2) it would still remain appealable under sub-section (1) with the result that appeals against such preassessment orders would lie to the AAC. 2. The above would apply mutatis mutandis to other Direct Taxes, to the extent applicable. 3. The above clarifications may be circulated to all the officers including AACs in your charge. Yours faithfully, (Sd.) Mehrotra, Director, Central Board of Direct Taxes. * See [1978] 114 ITR (St.) 11 ; Indian Tax Laws (1980) Pt. III, p. 166. + See [1979] 118 ITR (St.) 56 ; Indian Tax Laws (1980). Pt. III, p. 166. ++ See [1978] 111 ITR (St.) 9. ** See [1978] 114 ITR (St.) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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