Vildirect: IncomeTax-caselaws-1994-VIL-254-MAD-DT

1994-VIL-254-MAD-DT

Equivalent Citation: [1995] 215 ITR 533, 130 CTR 422

MADRAS HIGH COURT

Date: 16.11.1994

COMMISSIONER OF INCOME-TAX

D. VEERAPPAN

BENCH

Judge(s) : THANIKKACHALAM., R. JAYASIMHA BABU

JUDGMENT

At the instance of the Department, the Tribunal referred the following question for the assessment years 1970-71, 1971-72 and 1972-73, under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for our opinion :

" Whether, on the facts and in the circumstances of the case, the Appellate Tribunal, while setting aside the assessments was right in law in directing that the quantum of income to be computed in the fresh assessments to be made should not exceed the quantum of income sustained by the Appellate Assistant Commissioner ? "

For the abovesaid assessment years, the Income-tax Officer completed the assessments. On appeal, the first appellate authority confirmed the assessments made by the Income-tax Officer for these three assessment years under consideration. Aggrieved by the same, the assessee appealed before the Appellate Tribunal. Before the Appellate Tribunal, the assessee contended that since he was detained under the COFEPOSA he could not represent this case before the authorities below. It was, therefore, submitted that natural justice was denied to him in the matter of representing his case before the authorities below. Considering this aspect, the Tribunal set aside the assessments relating to the abovesaid three assessment years and remitted back the matters to the Income-tax Officer with a direction for reassessment. While remitting back for fresh assessments, the Tribunal restricted the jurisdiction of the Income-tax Officer in the following manner :

" So, however, that in the fresh assessments to be made the assessee shall not be worse placed than what is today before us. That means the quantum of income computed in the fresh assessment to be made shall not exceed the quantum of income determined by the Appellate Assistant Commissioner in these three assessment years."

Learned standing counsel appearing for the Department submitted before us that when the assessments made by the Income-tax Officer were set aside and the matters were remitted back for redoing the assessments, it is not possible for the Tribunal to restrict the jurisdiction of the Income-tax Officer in making fresh assessments. In order to support this contention reliance was placed upon a decision of this court in CIT v. Seth Manicklal Fomra [1975] 99 ITR 470, wherein while considering question of similar nature, this court was of the following view :

" Once an order of assessment is set aside, it is open to the Income-tax Officer to consider the entire matter afresh notwithstanding the terms of the order of the Appellate Assistant Commissioner directing the officer to consider the issue relating to the estimation of the income alone. There is no warrant for reading any such restriction of his power either under section 251(1)(a) or under section 143(3) of the Income-tax Act, 1961, under which the officer makes a fresh assessment. It is doubtful whether the Appellate Assistant Commissioner can restrict the power of the officer while setting aside the order and directing the officer to make a fresh assessment to invoke his powers under section 250, call for a finding on a specific issue and dispose of the appeal himself. But if the order of assessment is set aside and the officer is directed to make a fresh assessment, there is nothing in the provisions of the Act which would restrict the powers of the officer in passing an order under section 143(3). Once the order of assessment is set aside and the matter comes up for fresh assessment before the officer, his powers will have to be decided with reference to the provisions of section 143(3) and not with reference to any observations made by the Appellate Assistant Commissioner in his order or with reference to the scope of the appeal before the Appellate Assistant Commissioner. "

On the other hand, none was present on behalf of the assessee. We have heard the learned standing counsel appearing for the Department and perused the records carefully. The facts remain that the Appellate Tribunal set aside the assessments made by the Income-tax Officer in the assessment years under consideration. Thereafter direction was given to the Income-tax Officer for redoing the assessment. While giving direction to the Income-tax Officer, the Tribunal further directed the Income-tax Officer not to increase the income beyond what was determined by the Appellate Assistant Commissioner in the appeal proceedings. Once the assessments were set aside, it is open to the Income-tax Officer to redo assessment under section 143(3) of the Act. The jurisdiction of the Income-tax Officer cannot be restricted when once the assessments are set aside and remitted back for redoing the assessment afresh. This was also the view expressed by this court in volume 99 ITR 470 stated supra. Accordingly, we hold that the Tribunal was not correct in restricting the jurisdiction of the Income-tax Officer by stating not to exceed the income limit as determined by the Appellate Assistant Commissioner in the appeal proceedings. In that view of the matter, we answer the question referred to us in the negative and in favour of the Department. There will be no order as to costs.

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