COMMISSIONER OF INCOME-TAX VS SMT. SATI K. SIPPY
1992 P T D 1460
[Bombay High Court (India)]
[195 I T R 276]
Before T. D. Sugla mid B. N. Srikrishna, JJ
COMMISSIONER OF INCOME-TAX
Versus
Smt. SATI K. SIPPY and others
Income-tax Reference NO-303 of 1977 decided on /01/.
th
April, 1991. (a) Income-tax ---
----Assessment---Assessment completed originally under section 143(3 ---On appeal to AAC, assessee contending that it was denied reasonable opportunity to explain its position ---AAC setting aside assessment and directing ITO to give assessee fresh opportunity to explain its posttion---On appeal to Tribunal, Revenue contending that AAC himself should have decided appeal on merits---Tribunal agreeing with order passed by AAC---Department cannot have any grievance with order passed by AAC and Tribunal---No question of law involved in conclusion of AAC and Tribunal.
The assessment of the assessee was made originally by the Income Tax 'Officer under section 143(3) of the Income Tax Act, 1961. On appeal to the Appellate Assistant Commissioner, it was contended that the assessee was denied reasonable opportunity to explain its position with regard to the alleged undeclared consideration and compensation received. The Appellate Assistant Commissioner set aside the assessment and directed the Income-tax Officer to give the assessee a fresh opportunity to explain its position. On further appeal to the Tribunal, the Revenue contended that the Appellate Assistant Commissioner himself should have decided the appeal on merits rather than setting aside the order and directing the Income Tax Officer to make a fresh assessment after allowing the assessee an opportunity. The Tribunal agreed, however, with the order passed by the Appellate Assistant Commissioner and held that there was nothing wrong in the Appellate Assistant Commissioner setting aside the order with a direction to do the assessment afresh after giving the assessee reasonable apportunity. On a reference:
Held, that the Department could not have any grievance with the order passed by the Appellate Assistant Commissioner and the Tribunal and no question was involved in the conclusion arrived at by the Appellate Assistant Commissioner and the Tribunal.
(b) Income-tax---
----Capital gains---Understatement of consideration---Tribunal was justified in deleting the addition.
Held also, that the Tribunal was justified in deleting the addition of Rs. 3,00,000 under section 52 of the Income Tax Act, 1961, following the Suppreme Court decision in K.P. Varghese v. ITO 1991 131 ITR 597.
Dr. V. Balasubramanian with J. P. Devdhar and K.C. Sidhwa for the Commissioner.
Dinesh Vyas with P.C. Tripathi for the Assessee.
JUDGMENT
T. D. SUGLA, J.---In this Departmental reference relating to the assessee's assessment for the assessment year 1970-71, the Income-tax Appellate Tribunal has referred to this Court the following two questions of law for-opinion under section 256(1) of the Income Tax Act, 1961:
"(1) Whether, on the facts and in the circumstances of .the case, the Tribunal was justified in cancelling (sic), the order of the Appellate Assistant Commissioner setting aside the order of assessment with a direction to the Income-tax Officer to make a fresh assessment after affording the assessee a reasonable opportunity?
(2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in deleting the addition of Rs. 3,00,000 under section 52 of the Income-tax Act, 1961?"
In so far as the second question of law is concerned, counsel are agreed that, in view of the Supreme Court decision in the case of K.P. Varghese v. ITO (1981) 131 ITR 597, the question is to be answered in the affirmative and in favour of the assessee. The question is so answered.
As regards the first question, it may be stated that the assessment was made originally by the Income-tax Officer under section 143(3) on March 26, 1973. It was the contention of the assessee before the Appellate Assistant Commissioner that it was denied reasonable opportunity with regard to the alleged undeclared consideration and compensation received for the reasons given in the order. The Appellate Assistant Commissioner set aside the assessment and directed the Income-tax Officer to give the assessee a fresh opportunity to explain its position as demanded in the assessee's letter dated March 27, 1973, and reiterated by the assessee's advocate before him. It was contended before the Tribunal on behalf of the Revenue that the Appellate Assistant Commissioner should have himself decided the appeal on merits rather than setting aside the order and directing the Income-tax Officer to make a fresh assessment after allowing the assessee an opportunity. For elaborate reasons given in the impugned order, the. Tribunal agreed with the Appellate Assistant Commissioner and held that there was nothing wrong in the Appellate Assistant Commissioner's setting aside the order with a direction to do fresh assessment after giving the assessee a reasonable opportunity. We fail to understand what grievance can the Department have against such an order passed by the Appellate Assistant Commissioner and the Tribunal. We also fail to understand as to what question of law is involved in such a conclusion which requires our opinion. In any event, on the facts stated above, we answer the first question also in the affirmative and in favour of the assessee.
No order as to costs.
M.B.A./1633/T??????????????????????????????????????????????????????????????????????????????????? Questions answered.