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TMI Blog1987 (3) TMI 68X X X X Extracts X X X X X X X X Extracts X X X X ..... eference is made to the Inspecting Assistant Commissioner of Income-tax under section 144B(1) of the Income-tax Act, the provisions of section 129 of the Income-tax Act do not come into operation (3) Whether, on the facts and in the circumstances of the case, the reference made by the Income-tax Officer to the Inspecting Assistant Commissioner under section 144B prior to the receipt of objections from the assessee was valid ? " The relevant facts are : The assessee is a registered firm carrying on business as auctioneers and commission agents for sale of jaggery. For the assessment years 1973-74 and 1974-75, the firm filed returns declaring incomes of Rs. 50,640 and Rs. 37,640, respectively. After making appropriate enquiries, the Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stry are void ab initio for the reason that he did not afford an opportunity to him as contemplated by section 129 of the Act. Reliance was placed upon a decision of this court in Anantha Naganna Chetty v. CIT [1970] 78 ITR 743. This objection was upheld by the first appellate authority. The matter was then carried in further appeal to the Income-tax Appellate Tribunal. The Appellate Tribunal allowed the Department's appeal holding that in the circumstances of the case, section 129 has no application. The Tribunal observed that once the matter is referred to the Inspecting Assistant Commissioner, the change in the incumbent of the office of the Income-tax Officer has no relevance because the Income-tax Officer has no power to make any chang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... followed when there is demand from the assessee. The section does not even say that when such a demand is made, it is obligatory upon the officer to afford such hearing. It is true that a Bench of this court has held in Anantha Naganna Chetty v. CIT [1970] 78 ITR 743, that even though section 5(7C) of the Indian Income-tax Act, 1922-corresponding to section 129 of the present Act-does not in terms or expressly provide for a notice by the succeeding officer, yet such a notice must be inferred from the principles of natural justice. This was premised on the reasoning that the assessee may not know the change in the incumbent and that, therefore, the succeeding officer must tell the assessee and give him an opportunity. Though we have certain ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tant Commissioner under sub-section (4) shall be binding on the Income-tax Officer. Now in this case the assessee filed his objections. The matter was referred to the Inspecting Assistant Commissioner along with his objections. The Inspecting Assistant Commissioner heard the assessee we and then issued the directions. It is during the pendency of the matter before the Inspecting Assistant Commissioner that there was a change in the incumbent of the office of the Income-tax Officer (assessing authority). This, in our opinion, is immaterial inasmuch as under section 144B, the Income-tax Officer is not expected to take any fresh initiative or pass any order other than one in accordance with the directions issued by the Inspecting Assistant Com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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