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TMI Blog1983 (11) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 146. It was non-compliance with the terms of this notice which had attracted the ex parte completion of the assessment under section 144. The assessee before both the ITO and the Commissioner (Appeals) referred to another contention that the initiating of the assessment proceedings for the assessment year 1972-73 by issuing notice under section 148 of the Act was not valid. Both the ITO and the Commissioner (Appeals) considered this objection to be irrelevant while dealing with the provisions of section 146. The Commissioner (Appeals) agreed with the ITO that while dealing with the assessee's application under section 146 the validity of proceedings initiated under section 147(a) of the Act could not be looked into. He like the ITO confined himself to the short issue whether the assessee was prevented by sufficient cause from complying with the last notice issued by the ITO under section 142(1) on 17-3-1982. It may be stated that section 148 notice required for the filing of the return of income and the assessee did file a return on 17-3-1982 prior to the completion of ex parte assessment on 22-3-1982 and thus, there was no default in complying with the requirements o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 146(1) it is clearly provided that 'the ITO shall, if satisfied about the existence of such ground, cancel the assessment and proceed to make a fresh assessment in accordance with the provisions of section 143 or section 144'. If an assessee succeeds in the application filed under section 146 the ex parte assessment framed on him will become a nullity and fresh assessment will be ordered in view of the clear provisions of section 146. The disposal of the assessee's application under section 146 should, therefore, precede the issue of deciding the merits of quantum assessment made under section 144. It may also be pointed out that once the appeal under section 146 gets disposed of in favour of the assessee he gets the necessary relief in the sense that the assessment framed on him under section 144 and the defaults attributed therein attracting penalty provisions of the Act get vacated and the whole question of framing the assessment opens out. 5. The second question is what will be the scope of an appeal against an order under section 146 passed against an assessee by the ITO. Section 246(1) of the Act in clause (d) provides an appeal to the AAC or to the Commissioner (Appeals) u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ovisions of section 143 or 144. The relief envisaged herein thus, is not only of cancellation of the assessment but a fresh assessment is also directed to be made. This aspect is emphasised by clause (d) of section 246(1) when it is stated therein 'an order under section 146 refusing to re-open an assessment made under section 144'. The reopening of the assessment must follow the cancellation of assessment according to the language of the statute. 7. After clarifying the above principles, we may now look to the language used in section 253(1) of the Act about providing an appeal to the Tribunal. Section 253(1) opens with the words "Any assessee aggrieved by any of the following orders may appeal to the Appellate Tribunal against such order--". As the assessee has relied on case law, which was under the Indian Income-tax Act, 1922 ('the 1922 Act') we may mention the opening words of corresponding section 33(1) of that Act, viz., 'Any assessee objecting to an order passed by an Appellate Assistant Commissioner.....'. Under section 253(1), which applies in the assessee's case what is necessary is that he should be aggrieved by an order passed by the Commissioner (Appeals). The asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the notice was invalid and merely considered the appeal on merits and set aside the assessment and remanded the case to the ITO directing him to make a fresh assessment, etc. The assessee appealed against the order of the AAC to the Tribunal who held that in view of the order passed by the AAC there was no subsisting demand against the assessee and the appeal before it had, therefore, become infructuous. This decision of the Tribunal was challenged before the High Court, which held that the Tribunal ought to have decided the legal question raised by the assessee in the appeal before it and was not justified in dismissing the appeal as infructuous. The real issue involved in this case was that in the appeal against reassessment the assessee had sought two reliefs, one was on the legal ground of invalidity of notice under section 34 and if the assessee had succeeded in establishing the invalidity the assessment would have become a nullity and there was on question of its being framed afresh. The second relief was that on merits the assessment was not justified on the ground of proper opportunity not having been allowed, etc. In that situation, the assessee could be provided the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ment under section 147 a separate clause (e) was provided in section 246(1). We are not questioning that position being subsisting in the case of an assessment made by recourse to the provisions of section 147, etc., and it will be open to the assessee to agitate that question when the ITO takes up the fresh assessment. Here we are concerned with the effect of provisions of section 146 and the fact of appeals filed against the orders under sections 146 and 144. The assessee's counsel finally voiced an apprehension on the basis of the Punjab and Haryana High Court decision in Gopal Singh's case in which the headnote stated that in an appeal against an assessment under section 23(4) of the 1922 Act, the validity of the notice under section 34(1)(a) in pursuance of which the assessment was made cannot be raised without resorting to proceedings under section 27. The headnote may give rise to an apprehension in the mind of the assessee's counsel that the issue of validity of notice under section 148 could not be raised when the fresh assessment is made by the ITO but this apprehension disappears when the judgment in full is read and its facts are kept in mind. The headnote no doubt does ..... X X X X Extracts X X X X X X X X Extracts X X X X
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