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TMI Blog1998 (3) TMI 88X X X X Extracts X X X X X X X X Extracts X X X X ..... ssor-Income-tax Officer without application of his mind and only as per the directions under the said section issued afresh on the basis of the draft assessment order forwarded to him in regular assessment and to whom no draft assessment order is forwarded during the course of fresh assessment, whether the Tribunal erred in holding that such a fresh assessment is neither void nor non est nor a nullity and not to be annulled ? 3. Whether, the interpretation of the Tribunal that the remand was made only to set right the irregularity committed while following the procedure under section 144B correct ? 4. Whether the Inspecting Assistant Commissioner of Income-tax in fresh assessment order to be made as per appellate order had jurisdiction to issue directions on the basis of a draft assessment order forwarded to him in regular assessment ?" The relevant facts are as follows : For the assessment year 1978-79 when the assessee returned an income of Rs. 1,02,790 and an agricultural income of Rs. 1,000, the Income-tax Officer proposed to assess him on an amount of Rs. 11,63,660. Since the difference between the returned income and the income proposed to be assessed was more than Rs. 1 l ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e. The assessee took up the matter again in appeal before the Commissioner of Income-tax (Appeals) contending that since the original assessment was set aside, the Income-tax Officer ought to have sent a fresh draft order and only then the Inspecting Assistant Commissioner could have assumed jurisdiction under section 144B. The Inspecting Assistant Commissioner has committed a grave error in issuing directions under section 144B(4) on the earlier draft order. The contention was repelled by the Commissioner of Income-tax (Appeals). On a second appeal, the Tribunal also took the view that the assessment order dated January 20, 1984, is not liable to be declared as null and void nor was it liable to be set aside as vitiated by any illegality. It is from the above order the four questions are referred for opinion of this court. It was contended by the assessee before the Tribunal as well as before this court that once the assessment order dated September 26, 1981, was set aside, the draft order on the basis of which the Inspecting Assistant Commissioner had given directions to the Income-tax Officer should be treated as no longer in existence and therefore the Income-tax Officer shoul ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e afforded by the Inspecting Assistant Commissioner to the assessee on receipt of the draft order. It was also pointed out that the change of incumbent of an office cannot affect the proceedings in view of the provisions contained under section 129 of the Income-tax Act, 1961. We do not find any merit in the contentions raised by the assessee. The illegality which weighed with the appellate authorities while setting aside the assessment order dated September 26, 1981, was procedural irregularity committed by the Inspecting Assistant Commissioner in giving direction to the Income-tax Officer under section 144B(4) without granting an opportunity of being heard to the assessee. The assessment order dated September 26, 1981, had to be set aside only for this reason. There is nothing wrong in continuing the proceedings from the stage where the proceedings were vitiated by an illegality of not granting sufficient opportunity to the assessee. A similar view was taken by the Supreme Court in Guduthur Bros. v. ITO [1960] 40 ITR 298. After issuing a notice to the assessee under section 28(1)(a) of the Indian Income-tax Act, 1922, to show cause why penalty should not be imposed for failure t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tter was remanded by the Tribunal under its order dated November 17, 1983. In Goa Sea Foods v. CIT [1991] 189 ITR 431 (Ker), it was found that the Income-tax Officer did not forward the objection filed by the assessee along with the draft assessment order to the Inspecting Assistant Commissioner. This court took the view that the word "received" occurring in section 144B(3) should be understood only as "forwarded" as specified in section 144B(2) and since the assessee had forwarded his objections within seven days of receipt of the draft order, the Income-tax Officer should have complied with the provisions of section 144B(4). On the failure of the Income-tax Officer to do so it was held that the final assessment order passed by the Income-tax Officer was vitiated. The matter was remitted to the Income-tax Officer for redoing the assessment after complying with the provisions of section 144B(4). There is no direction issued in this case to the Income-tax Officer to pass a fresh draft order as contemplated by section 144B(1). Reliance was placed by learned counsel for the assessee on the observation made by the Supreme Court in Panchamahal Steel Ltd. v. U. A. Joshi, ITO [1997] 225 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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