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TMI Blog1982 (8) TMI 97X X X X Extracts X X X X X X X X Extracts X X X X ..... . The said application was dealt with by the ITO vide his order dt. 20th March, 1980 in a manner which has given rise to the entire controversy in the present appeal. He issued the purported notice u/sub-s (2) of s. 143 of the IT Act, 1961 to the assessee and thereafter instead of making a fresh assessment u/sub-s (3) of s. 143 he rejected the assessee's application by making, inter alia, the following observations: "The Assessee is found to have submitted a statement on 7th October 1964 showing the cost of the property at Rs. 17,000 which was accepted by the then ITO. In view of the provisions of sub-s (2) of s. 48 and sub-s (2) of s. 50 read with s. 55(2) the cost of acquisition of the asset shall be taken to be the cost of acquisition or the fair market value on the 1st day of January, 1961. Since there is no addition or renovation in the form of improvement to the assets during the period from 1961 to 1st January, 1964, the cost is taken at Rs. 17,000, as claimed by the assessee in his statement of 17th October 1964. The capital gain has therefore, been rightly computed and assessed. The petition u/s 143(2)(a) is, therefore, rejected." The above order was described by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AAC and it is submitted before us that even if the learned AAC was of the opinion that the procedure followed by the ITO was extraordinary and not strictly in conformity with the provisions of sub-s. (3) of s. 143 of the IT Act, 1961 he should have set aside the order of the ITO and should have directed him to make a fresh assessment rather than annulling the assessment order passed by him. It is pleaded on behalf of the revenue that instead of going by the form the learned AAC should have gone by the substance of the order and a careful perusal of the order passed by the ITO would show that he had met all the objections raised by the assessee during the course of hearing in response to notice under sub-s. (2) of s. 143 and thereafter he has refused to accept that and has reaffirmed the correctness of the computation of capital gains that he had originally made in the order passed under sub-s. (1) of s. 143. As the total income determined by him earlier under sub-s. (1) 143 remained unchanged, he did not do the exercise of repeating the computation of the said income in this order once again. The order passed by him earlier should, as a matter of fact, be read as part of the presen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee a notice requiring him, on a date to be therein specified, either to attend at the Income-tax Officer's Office or to produce, or to cause to he there produced, any evidence on which the assessee may rely in support of the return: Provided further that in a case where the assessment made under sub-section (1) is objected by the assessee by an application under clause (a), the assessee shall not be deemed to be in default in respect of the whole or any part of the amount of the tax demanded in pursuance of the assessment under that sub-section, which is disputed by the assessee, in so far as such amount does not relate to any adjustment referred to in sub-clause (1) of clause (b) of sub-sec. (1) and further no interest shall be chargeable under sub-section (2) of sec. 220 in respect of such disputed amount." From a reading of the aforesaid sub-section it would be clear that on the receipt of an application from the assessee in terms of cl. (a) of sub-s 143, the ITO is obliged to issue to him a notice u/sub-s (2) of s. 143, requiring him to produce before him any evidence on which the assessee may rely in support of the return. There is nothing in the aforesaid provisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b) In a case where an assessment has been made under sub-sec (1), if either such assessment has been objected to by the assessee by an application under clause (a) of sub-s (2)........ the Income-tax Officer shall by an order in writing make a fresh assessment of the total income or loss of the assessee, and determine the sum payable by him or the basis of such assessment. 9. The requirement of the aforesaid cl.(b) of sub-s (3) of s. 143 is that after taking into account all the material and evidence produced by the assessee before the ITO he shall pass a fresh order of assessment and such order of assessment shall indicate the total income on which assessment is to be made and also the tax payable on the aforesaid total income. 10. Let us now examine the facts of the present case with reference to the aforementioned provisions of law. After the receipt of the application from the assessee in terms of cl. (a) of sub-s. (2) of s. 143 of the IT Act, 1961, the ITO did issue a notice u/sub-s (2) of s. 143 of the Act to the assessee. The procedure prescribed by sub-s. (2) of s. 143 was thus duly followed by him. On the appointed date of hearing, the assessee was heard in full and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The only requirement is that the order in question should be a speaking one and should make the mind of the ITO explicit so that the appellate authorities may be able to evaluate the worth of his order. For the inadequacies of the language or of the format, no order can be quashed or annulled for such an order does not suffer from any legal infirmity which might make its very foundation to disappear. This whole some principal of interpretation has since been incorporated in the statute itself vide s. 292B of the IT Act 1961 which so far as it is relevant for our purpose reads as follows: "No return of income, assessment, notice, summons or other proceeding furnished or made or issued or taken or purported to have been furnished or made or issued of taken in pursuance of any of the provisions by of this Act shall be invalid or shall be deemed to be invalid merely by reason of any mistake, defect or omission in such return of income, substance and effect in conformity with or according to the intent and purpose of this Act." Apparently the ld AAC had omitted to take note of this section. He has apparently gone by the penultimate observations of the ITO that the petition u/s 14 ..... X X X X Extracts X X X X X X X X Extracts X X X X
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