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TMI Blog1988 (2) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... ereafter, he dealt with the valuation of business immovable assets in paras 8 to 10. He dealt with the dispute regarding the value of tractor in para 11 and about the deduction of liability of Rs. 5,83,719 in para 12. In paras 13 and 14 of his order, he set aside the assessment orders in the following words : "Thus on consideration of the impugned assessment orders of the WTO in respect of valuation or/and taxability of the various items as discussed in the preceding paragraphs, it has been found that practically all the points need to be reconsidered by the WTO. It appears that the assessments were made by the WTO in a hurry and, therefore, neither the appellant could get adequate opportunity to put forth his case nor could the WTO consider the points properly. Under the circumstances I consider it fit to set aside the whole assessment for each of the assessment years under appeal for the purpose of being re-made by the WTO according to law after giving necessary opportunity to the appellant to put forth his case in regard to the various assets or liabilities involved in the assessments. The WTO should make the fresh assessments after considering the taxability of the assets and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly satisfied that there was an error in the order and that the order was, therefore, prejudicial to the interests of the revenue. The show-cause notice under section 25(2) issued by the CWT did not say that the orders passed by the WTO on 27-3-1984 were erroneous and, therefore, prejudicial to the interests of the revenue. Since there was no preliminary satisfaction on the part of the CWT, the orders were not erroneous as could be seen from the show-cause notice issued by him. The initiation of proceedings under section 25(2), according to Shri Dastur, was ab initio void. 3.1 Secondly and without prejudice, Shri Dastur argued that the order passed by the WTO on 27-3-1984 had a limited scope and a limited purpose. It was passed to give effect to the direction of the CWT (Appeals) contained in his consolidated order dt. 30-5-1981 and in particular, in paras 13 and 14 thereof (which are reproduced hereinabove). Therefore, the CWT, Central-II, was not competent to revise an order which was passed in consequent of and to comply with the direction given by the CWT (Appeals) on restricted set aside on a specific issue. In this context, Shri Dastur relied on the decision of the Bombay Hi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he not only inquired into the facts relating to super-tax relief but went further, suo motu, into the question whether there was a discontinuance of the business earlier in 1933 and held that there was such discontinuance and therefore no relief could be granted to the assessee under section 25(4) of the Indian Income-tax Act. On these facts, the Bombay High Court held that the order of the Appellate Tribunal, when read in the proper context, restricted the scope of enquiry by the AAC only to the question of merits affecting the claim of the assessee for relief from super-tax and, therefore, the AAC had no jurisdiction to issue the notice of enhancement and to withdraw the relief in respect of income-tax granted by the ITO under section 25(4). Deriving support from this judgment, Shri Dastur argued that the directions of the CWT (Appeals) were specific and the orders passed consequent to such directions by the WTO had restricted scope and could not be revised by the CWT under section 25(2) of the WT Act. 3.3 Shri Dastur then referred us to another decision of the Bombay High Court in CIT v. Devidayal Metal Industries (P.) Ltd. [1968] 68 ITR 50. In that case, the assessee was a d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... new source of income and the power of enhancement under section 31(3) is restricted to the sources of income which have been the subject-matter of consideration by the Income-tax Officer from the point of view of taxability. Relying on these observations, Shri Dastur argued that the CWT (Appeals) had dealt in his order with certain specific issues, namely, the valuation of non-business immovable properties, other business immovable properties, availability of exemption and deductibility of liabilities claimed. He discussed these issues in his order and made certain observations in respect of these issues and directed the WTO to re-do the assessments in respect of these issues in the light of those observations. Therefore, fresh orders passed by the WTO on 23-3-1984 were restrictive in nature in so far as it had to necessity to bear the character of an order giving effect to the order of the CWT (Appeals). Therefore, the CWT, Central-II, had no jurisdiction to proceed under section 25(2) and hold that a mistake had been committed in such order of the WTO. There was, if any, mistake by way of non-inclusion of value of old assets had been committed, if at all, in the original orders p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r is prejudicial to the interests of the revenue, the error is implicit. Shri Subramanian further argued that the CWT (Appeals) had set aside the entire orders and had directed that fresh assessments be made. The orders passed on 27-3-1984 were fresh assessment orders made under section 16(3) and not the orders giving effect to the CWT (Appeals)'s order. Shri Subramanian further argued that there was no appeal for the assessment years 1969-70 and 1971-72 and so far as the assessment years 1972-73 and 1975-76 were concerned, the proceedings were initiated on 3-3-1986 and the order was passed on 14-3-1986 whereas the order of the AAC was received by the CWT on 17-3-1986. Therefore, the CWT was not expected to be aware of the order of the AAC. Shri Subramanian thereafter relied on the decision of the Delhi High Court in Gee Vee Enterprises v. Addl. CIT [1975] 99 ITR 375. In that case, the Commissioner had under section 263 cancelled the assessment on the ground that the ITO had not made sufficient enquiries before granting registration to the petitioner firm and directed the officer to make fresh assessment. When the petitioner filed a writ to the High Court, the Court held, dismissin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revision were, therefore, valid. Shri Subramanian strongly relied on this decision. 5. Here again, the Tribunal had set aside the orders of the AAC and restored the matter to the ITO for fresh consideration of the issues involved. There was no consideration on merits of the first orders passed by the ITO by any of the appellate authorities. 5.1 In the present cases, specific issues were raised before the CWT (Appeals). These issues were clearly spelt out by the CWT (Appeals) in the various paras. He made specific observations in respect of these issues and sent back the matter to the file of the WTO for reconsideration of these issues in the light of observations made by him. Therefore, on overall reading of the CWT (Appeals)'s order, it could not be said that the orders of the WTO were set aside wholly and the entire assessments were open before the WTO. The WTO had to adjudicate on the valuation of immovable properties, claim of exemption and claim of deduction of liabilities which were the issues on which the dispute had arisen before the CWT (Appeals). He concentrated his attention only on these issues. In fact, his jurisdiction was restricted to the consideration of these ..... X X X X Extracts X X X X X X X X Extracts X X X X
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