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TMI Blog1992 (3) TMI 52X X X X Extracts X X X X X X X X Extracts X X X X ..... in holding that the Appellate Assistant Commissioner had wrongly issued notices for enhancement of income on new items or sources of income? 2. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the Income-tax Officer had no power to consider the fresh sources of income or new sources of income for enhancement in the income of the assessee when the assessment was set aside as per directions of the Appellate Assistant Commissioner ? 3. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that the Appellate Assistant Commissioner had set aside the assessment without restrictions ? " The facts leading to this applicatio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s Pvt. Ltd. The Appellate Assistant Commissioner, in the appeal by the assessee, instead of confining himself to the issues raised by the assessee, issued a notice for enhancement on the items which were neither considered by the Income-tax Officer nor were raised by the assessee before the Appellate Assistant Commissioner. Notice for enhancement was in regard to an income of Rs. 3,24,000 under section 2(22)(e), Rs. 97,303 under section 2(24)(iv) and cash credits of Rs. 1,32,000. The learned Appellate Assistant Commissioner made a very detailed enquiry and, considering the various submissions of either side, held that the income of the assessee should be enhanced. While doing so, he considered the fresh material which was not before the Inc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the Income-tax Act, 1961, which has been rejected by the Income-tax Appellate Tribunal and, it is in these circumstances, that the present application was filed. Mr. Virendra Dangi, appearing on behalf of the petitioner, vehemently argued that, from the order of the Appellate Assistant Commissioner, it is amply clear that the assessee had deliberately withheld the correct information and they have not filed the returns correctly and thus the assessee, not having come with clean hands, should not have been heard by the Income-tax Appellate Tribunal, firstly, on the ground of his being guilty of suppression of material facts and, secondly, that it was a case of escaped income. Mr. Dangi submitted that as to whether the Appellate Assistan ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... it is not open to the Appellate Assistant Commissioner to reopen the whole case. Learned counsel, in this respect, has relied on the decisions of their Lordships of the Supreme Court in CIT v. Rai Bahadur Hardutroy Motilal Chamaria [1967] 66 ITR 443 and CIT v. Shapoorji Pallonji Mistry [1962] 44 ITR 891. We have given our thoughtful consideration to the rival contentions and have looked into the provisions of law. Appeals are provided under section 246 of the Income-tax Act, 1961, before the Appellate Assistant Commissioner and the Commissioner (Appeals). These appeals are by assessees aggrieved by the orders mentioned in section 246. Any order made under section 143(3) is appealable and the powers of the appellate court are provided i ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ions are made in the Act. The Tribunal had elaborately discussed the provisions of the Act and the case law on the subject and has rightly come to the conclusion that new sources not mentioned in the return or considered by the Income-tax Officer are beyond the scope of the powers of the Appellate Assistant Commissioner. The case relied on by learned counsel for the petitioner that the power of setting aside the assessment order remanding the case for reconsideration of the whole matter including the evasion of tax by the assessee is not applicable in the facts of the present case because the matter arising in that case was one which arose out of the proceedings before the Incometax Officer. The question was not about new or fresh material ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y or to its non-taxability and not to any incidental connection. In the instant case, the Appellate Assistant Commissioner has, after issuing notice, himself considered the new material and has gone into new sources of income for the consideration of which he had no jurisdiction. In fact, we fail to understand as to why when the order was brought to the notice of the Commissioner, he himself proceeded to issue direction when he had ample powers under other provisions of this Act. There are various other provisions under the Income-tax Act which can be invoked in cases of escaped income or such situations where the new sources had been left to be considered, but that would not give powers to the Appellate Assistant Commissioner to transgre ..... X X X X Extracts X X X X X X X X Extracts X X X X
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