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TMI Blog1983 (5) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... elhi) of 1975-76. The Bench hearing the case, however, found another decision of the Calcutta Tribunal in the case of ITO v. D.K. Sen in IT Appeal No. 251 (Cal.) of 1976-77, wherein, the Calcutta Bench after considering the decision of J K High Court in S. Mubarik Shah's case, took contrary view. Accordingly, the matter was referred to the President for constituting a Special Bench. 2. It will be relevant to mention that on a point relating to the assessee's appeal, Special Bench was constituted. But the departmental appeal lying before the Bench was disposed of by the order of the Tribunal dated 15-9-1980 in IT Appeal No. 12 (Gauhati) of 1980. The appeal of the department was on the limited issue that the AAC was not justified in allowing a relief of Rs. 48,896 in contract account. The appeal of the department was set aside by the Tribunal. Thus, the matter is being disposed of by the Special Bench (sic). 3. The first ground taken by the assessee is that the AAC erred in holding that even though the ITO had not determined the tax payable in the assessment order, the assessment order could not be held invalid. The necessary facts relating to the above issue are that the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... book, which is Form No. 36. He referred to the grounds of appeal of the department and stated that the subject-matter of appeal of the department was the relief of Rs. 48,896 allowed by the AAC. The Tribunal can only give its finding on the subject-matter of appeal. If the order of the Tribunal in IT Appeal No. 12 (Gauhati) of 1980 is read along with the subject-matter of appeal, the order of the ITO was only set aside on that issue. The assessee has filed a separate appeal before the Tribunal. Therefore, the Tribunal will have to dispose of the appeal of the assessee irrespective of the fact as to what decision had been taken in the case of the department's appeal. Shri Tandon, in this connection, placed reliance on S.P. Kochhar v. ITO 1983 Tax LR 181 (All). 6. The fact is that against the order of the AAC, the assessee as well as the department both filed appeals before the Tribunal. The assessee was in appeal on the various grounds and it also took a legal objection that the assessment made by the ITO was invalid, because the ITO did not determine the tax payable by the assessee as required under section 143(3) in the assessment order. The department, on the other hand, was ag ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that there was no work-in-progress. This fact finds mentioned in para 7 of the impugned order of the AAC. The ITO having based the addition mainly on this score and the AAC having granted relief to the assessee on this very score, this aspect of the case requires to be discussed and thrashed afresh and for the purpose the ITO will call for additional evidence from the assessee if necessary and the assessee shall be at liberty to place on the file of the ITO any further evidence, the assessee so chooses. " It is clear from the above extract that the assessment was set aside. However, the 'set aside' will have to be read in the context of the subject-matter of the appeal of the department. The department was in appeal only on a limited issue of relief of Rs. 48,896 allowed by the AAC in the contract account. Therefore, the Tribunal's order will have to be read in the light of the subject-matter of appeal. It will be relevant to mention the observation of the Supreme Court in CIT v. Walchand Co. (P.) Ltd. [1967] 65 ITR 381 : " . . . It is necessary to emphasize that, though the Tribunal is not a court, it is invested with judicial power to be exercised in manner similar to the e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of the AAC by which a relief of Rs. 48,896 was allowed to the assessee, whereas, the assessee was aggrieved on the various grounds which were decided against it. The appeal of the department was, no doubt, decided earlier, but it should not prejudice the interest of the assessee. The assessee had inherent right of appeal under section 253 of the Act, against the order of the AAC. if the argument of the department is accepted, the appeal of the assessee would be nullity which is not fair. The above view is supported by the decision in Pathikonda Balasubba Setty v. CIT [1967] 65 ITR 252 (Mys.). The facts of the above case are that in computing the assessment for 1949-50, the ITO estimated the gross profit under two of the various businesses carried on by the assessee, viz., buying and selling of groundnut kernel and manufacturing and selling of groundnut oil and oil-cake. The ITO found suspicious entries but did not make any additions specifically for that purpose but used them as supporting the additions made to the gross profits. A further addition of Rs. 20,000 was made on account of unexplained stock. On appeal, the AAC gave substantial relief on the addition to the gross ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atory for the ITO to determine the sum payable by the assessee in the assessment order. He also referred to section 156 of the Act and urged that if the tax payable by the assessee had been determined in a notice of demand, it would not satisfy the requirement of section 143(3)(a). The counsel, in this connection, referred to the decision of the Hon'ble J K High Court in S. Mubarik Shah's case, and also referred to the provisions of sections 143(3)(a) and 144 under which the Hon'ble J K High Court gave their decision. The counsel pointed out that the provisions of sections 143(3)(a) and 144 are in pari materia and, therefore, the decision could not be distinguished. He referred to the decision of the Delhi Bench of the Tribunal in the case of Smt. Sushilla Devi, and the contrary decision of the Calcutta Bench of the Tribunal in the case of D.K. Sen. Referring to the contrary decision of the Tribunal, the assessee's counsel stated that the only decision on the issue is available of J K High Court which has a binding effect in view of the decision in CIT v. Smt. Godavaridevi Saraf [1978] 113 ITR 589 (Bom.). 11. The counsel further referred to rule 15, Form No. 8 under rule 15 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 143(3) was not invalid. Shri Bara filed photostat copy of a plain paper containing determination of tax and signed by the ITO on 30-3-1978, computation of tax in Form ITNS 150A on the same date and duly signed by the ITO and the copy of the demand notice, dated 30-3-1978 which contained the tax determined by the ITO and payable by the assessee. Shri Bara urged that the Act has not prescribed any form for the assessment order. The assessment order and demand notice had been given to the assessee and the demand notice contained the tax payable by the assessee as determined under section 143(3)(a). The ITO on the same date had determined the tax payable by the assessee not only in Form ITNS 150A but he has also determined the tax payable on a plain sheet which has been duly signed by the ITO as on 30-3-1978. Shri Bara, therefore, urged that the ITO has complied with the requirement of section 143(3)(a) and the decision of J K High Court in S. Mubarik Shah's case. 13. He further referred to section 292B and said that even if the sheet containing the tax determined by the ITO was not given to the assessee, it was only a curable defect under section 292B. He, in this connectio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the tax payable by the assessee on the basis of the total income computed by him in the assessment order, which is invalid. Therefore, the question for consideration is whether on the facts and in the circumstances of the case, the order passed by the ITO was invalid in view of section 143(3)(a) read with the decision in S. Mubarik Shah's case. It would be relevant at this stage to quote section 143(3)(a) : " (3) On the day specified in the notice issued under sub-section (2), or as soon afterwards as may be, after hearing such evidence as the assessee may produce and such other evidence as the ITO may require on specified points, and after taking into account all relevant material which he has gathered,--- (a) in a case where no assessment has been made under sub-section (1), the ITO shall, by an order in writing, make an assessment of the total income or loss of the assessee, and determine the sum payable by him or refundable to him on the basis of such assessment ; " If the above section is read, possibly there could not be any dispute on these facts that the assessment under section 143(3)(a) is not only of the computation of total income or loss of the assessee, but the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntrary decision is available. The Hon'ble High Court has observed---- "...an authority like an Income-tax Appellate Tribunal, acting anywhere in the country, has to respect the law laid down by the High Court, though of a different State, so long as there is no contrary decision of any other High Court on that question ....." Similar observation is also available in CIT v. Vrajlal Manilal Co. [1981] 127 ITR 512 (MP), CIT v. U.P. Hotel-Restaurant Ltd. [1980] 123 ITR 626 (All.) and T. Sundaresa Mehta v. CED [1981] 127 ITR 107 (Mad.). 17. The provisions of sections 143(3) and 144 were carefully examined as urged by the respective parties. The necessity of going through the above provisions was felt because the decision of the J K High Court was given in the assessment which was completed under section 144, whereas, the assessment of the assessee had been completed under section 143(3). After the examination of the provisions, the view expressed by the assessee's counsel is accepted. The provisions of section 144 and section 143(3)(a) are pari materia and requirements of the two sections regarding completion of assessment are the same. Therefore, simply because the assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bed. If the argument of the assessee for the sake of convenience is accepted, the tax determined may not be in any form but it may be even on a piece of paper. It may be simple or otherwise. Therefore, apart from the fact that in the case of the assessee tax was determined by the ITO as on 30-3-1978 on a plain paper, it was also determined on another sheet and on the same date. The Form ITNS 150A which was used by the assessing officer may be taken just a rough paper on which the calculation of tax payable by the assessee was done on the same date. Under the circumstances, the necessary compliance of section 143(3)(a) had been made by the ITO as laid down in S. Mubarik Shah and Krishwanti case. The tax determined by the ITO on two sheets, as referred to above, had not been forwarded to the assessee. In plain words, the assessee had been forwarded a part of the assessment order along with notice of demand and another part of the order which contained determination of tax was not served on the assessee though it was made on 30-3-1978 within the period of limitation. Section 292B was introduced by the Taxation Laws (Amendment) Act, 1975 with effect from 1-10-1975 and the purpose of th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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