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TMI Blog1983 (5) TMI 46X X X X Extracts X X X X X X X X Extracts X X X X ..... vidence the income returned by it. However, there was no response and none attended. The ITO, therefore, felt that there was no other way but to complete the assessment to the best of judgment under section 144 of the Act. He held that the assessee had filed a statement of profit and loss account, which was not corroborated by any evidence. In the absence of any details and data, he estimated the net income of the assessee at Rs. 25,000 and treated the firm as an unregistered firm. This order was passed by the ITO on 3-3-1981. 2. The assessee appealed against this order to the AAC and contended that the estimate of income made by the ITO was without any basis or reasons, that the assessee was a registered firm, that it had filed a declara ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 146 of the Act on 7-4-1981, requesting the ITO to reopen the best judgment passed by him on 3-3-1981. He further submitted that on the same day, the assessee had filed the appeal against the best judgment assessment to the AAC. The learned counsel submitted that this was the last year of the business and that the assessee-firm was dissolved on 24-10-1976. He further submitted that the assessee-firm had filed a notice of dissolution of the firm with the ITO on 19-1-1978, the date on which it had also filed the declaration in Form No. 12 for the year under appeal. The learned counsel submitted that the ITO was not justified in observing that the assessee had not filed a declaration in Form No. 12, in his order passed under section 185 of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s a fetter on the power of the ITO to be exercised by him under section 146(1). On the contrary, this is a direction to the ITO to dispose of the assessee's application under section 146 as expeditiously as possible, namely, within 90 days from the receipt of the application by the ITO. But, if an ITO is unable to dispose of an application received by him under section 146, within the said period of 90 days, it does not mean that the ITO has become functus officio and that the assessee would be deprived of his right conferred by section 146(1) to have the best judgment assessment cancelled under the said provisions of law. I an unable to agree with the learned departmental representative that after the expiry of the period of 90 days mentio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment. He was also right in directing the ITO to consider the declaration in Form No. 12 filed by the assessee, as the order passed by him under section 185 was patently erroneous. In fact, in an appeal filed under section 246(c) of the Act, it is open to the assessee to object to the status under which he is assessed. In the present case, the assessee objects to the status of unregistered firm taken by the ITO in the assessment order. 9. In the interests of justice, I would, therefore, direct the ITO to first dispose of the application filed by the assessee under section 146 on 7-4-1981 and then make a fresh assessment in accordance with the directions issued by the AAC in his order. With these observations, I confirm the order of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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