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TMI Blog1979 (6) TMI 13X X X X Extracts X X X X X X X X Extracts X X X X ..... the affirmative, whether the Tribunal was justified in holding that, on the facts and in the circumstances of the case, the Income-tax Officer can review his earlier decision whereby he had, while completing the original assessments, applied the provisions of section 183(b) ? " The relevant facts are in a short compass. The original assessment for the assessment year 1967-68 was made on the 20th February, 1969, and for the years 1968-69 and 1969-70, on February 13, 1970. For the assessment year 1967-68, the firm was not registered under s. 185(1)(a) but the provisions of s. 183(b) were applied. It was also mentioned in the assessment order that the assessee had filed a declaration under s. 184(7) requesting continuation of registration. B ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not been completed and he, therefore, called for the share income of the partner of Pattabiraman and Co. communicated to him on completion of the firm's assessment. The ITO reopened the assessment under s. 147(b) and in the assessment order, which subsequently followed, he stated that from a letter received from the ITO, Trichur, it was found that the provisions of s. 183(b) were not applicable for the assessment years under consideration and that, therefore, the assessee had been assessed at too low a rate and consequently action under s. 147(b) was to be taken for the said assessment years. In the reassessment, the ITO treated the firm as an unregistered firm, withdrew the application of s. 183(b) and raised a demand on the firm itself ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt relevant, runs as follows: " In the case of an unregistered firm, the Income-tax Officer-... (b) if, in his opinion., the aggregate amount of the tax payable by the partners if the firm were treated as a registered firm would be greater than the aggregate amount of the tax which would be payable by the firm under clause (a) and the tax which would be payable by the partners individually, may proceed to make the assessment under clause (ii) of subsection (1) of section 182 as if the firm were a registered firm ; and where the procedure specified in this clause is applied to any unregistered firm, the provisions of sub-sections (2), (3) and (4) of section 182 shall apply thereto as they apply in the case of a registered firm." This p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . I, at page 1185: " The Income-tax Officer is not concerned with the motives of the partners, and all that he is concerned with is which course would be more advantageous to the revenue. If his estimate or opinion is wrong, the revenue suffers, and he has no right, it is submitted, to correct his mistake under section 147 and go back on his option at a later stage. But it may be open to the Commissioner to act under section 263." The learned author has not given any reason why he has taken this particular view. There is no authority to support it and we are not satisfied with its correctness. So long as the ITO had some information which came into his possession subsequent to the assessment and which showed that the income chargeable t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cision has no scope for application to the problem before us. In the present case, it was not the contention of the assessee at any stage that the ITO had exercised any option to assess any partner so that he could not have assessed the firm. Further, the option contemplated by s. 183(b) is a different option from the option to assess either the unregistered firm or the partners. The option here is between treating the firm as registered firm or as unregistered firm on the basis of the comparison of the figures of tax payable by the firm and by the partners. It is on this aspect that subsequently information came into the possession of the ITO which showed that his early exercise of the option was such as to result in the assessee being tax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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