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TMI Blog1998 (3) TMI 166X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1961. Subsequent to the completion of the assessment, information was received by the Assessing Officer that income of the appellant escaped by a sum of Rs. 58,502 on account of processing of cloth done by the appellant from M/s. Unitex Processors Pvt. Ltd., and the payment was made of which the details are as follows: 15-5-1986 1598 Sq. Mtrs. Rs. 10,962.00 3-12-1986 6930 Sq. Mtrs. Rs. 47,539.00 ------------- Rs. 58,502.00 ------------- 3. The Assessing Officer initiated proceedings under section 147 and passed order on 31-7-1995. The Assessing Officer mentioned that the proceedings initiated in this case are dropped. The order of dropping the proceeding was found to be erroneous insofar as the same was treated as prejudicial to the interest of revenue. The CIT observed that the Assessing Officer dropped proceedings on the ground that only an amount of Rs. 10,962 is related to the previous year relevant to the A.Y. 1987-88 and consequently he filed the proceedings because same were not applicable as the income escaped is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ld. counsel is that there was no order in existence which could have given jurisdiction to the CIT under section 263 of the I.T. Act. The records show that the original order was passed under section 143(1) of the Income-tax Act, 1961. There is no dispute about the issue of notice under section 148 consequential to initiation of proceedings under section l47 of the Act. Before us is an order under review which passed on 31-7-1985 in I.T.N.S.-65. Column 13 of the I.T.N.S. mentions that the order is passed under section and sub-section under which the assessment is made and same is mentioned as order under section 143(3)/147. In the body of the assessment order, the Assessing Officer has mentioned "Proceedings initiated in this case are dropped". The Income-tax record according to the observation of the CIT mentions perhaps an office note giving the reasons for dropping proceedings. The word 'order' is not defined in the Income-tax Act. In the legal terminology, order from Government Authority is an action of any authority which will cost upon either an advantage or disadvantage upon the person against whom such order is passed. The order has to be passed by an authority legally comp ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... this context that Parliament did not think of appeals and revisions in respect of assessment orders already made or which it had authorised to be made under clause (a) of section 297(2)." 9. It is very important to understand the wider meaning of the assessment and various Courts have defined the word 'assessment' which is used in a number of provisions in a comprehensive manner. The Hon'ble Supreme Court has further broadened the ambit of assessment in the case of C.A Abraham v. ITO [196l] 41 ITR 425 and CIT v. Bhikaji Dadabhai Co. [1961] 42 ITR 123 whereby the assessment has been held as a compact procedure for ascertainment of tax liability which starts from the filing of the return, issue of notice by the Assessing Officer either under section 139 or under section 148 and gels completed by passing an order under section 143(3) of the I.T. Act. The Hon'ble Supreme Court in the case of K.L. Varadarajan v. CIT [1975] 98 ITR 182 has held that the assessment includes reassessment. 10. On the equal analogy, regarding filing of the proceedings or accepting the 'nil' return, there are many decision of Hon'ble High Courts and Supreme Court. In the case of Aruppukottai Chandra Bus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fore him initiated by the notice dated February 23, 1950, should no longer remain in existence as being unnecessary, and he clearly intended that they should be terminated or dropped. In the circumstances, the word 'filed' had to be interpreted as equivalent to "disposed of". (ii) That, assuming that it was essential that the Additional Income-tax Officer should have passed on an order of assessment even if the result of the determination was that the tax payable was nil and, therefore, the order that the case be "filed" would be invalid, the effect could not be that the proceedings before the Additional Income-tax Officer must be held to have continued after the order was made by him. So long as it was not set aside, the only conclusion possible was that the proceedings before the Additional Income-tax Officer initiated by the notice dated February 23, 1950, terminated and did not continue to remain pending. (iii) That the order passed by the Commissioner transferring the case of the assessee to the Principal Income-tax Officer did not necessarily indicate that the proceedings which the Additional Income-tax Officer had actually terminated were still to be treated as pending a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e was no basis on which any reassessment could be made under section 34. The view we have taken of the matter clearly finds support from the decision of the Supreme Court in Esthuri Aswathiah v. Income-tax Officer. A similar order in an assessment proceeding under section 23(1) was held to amount to an order of assessment. The relevant observations of their Lordships are at page 543 of the report and are reproduced below for facility of reference: The submission that the previous return submitted on September 8, 1952, "had not been disposed of" and until the assessment pursuant to that return was made, no notice under section 34(1) for reassessment could be issued, has in our judgment no substance. The Income-tax Officer had disposed of the assessment proceeding accepting the submission made by the appellants that they had no income for the assessment year 1950-51. Under section 23(1) of the Indian Income-tax Act, it is open to the Income-tax Officer, if he is satisfied that the return made by the assessee under section 22 is correct, to assessee the income and to determine the sum payable by the assessee on the basis of the return without requiring the presence of the assessee o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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