TMI Blog1991 (2) TMI 20X X X X Extracts X X X X X X X X Extracts X X X X ..... 2. Whether, on the facts and in the circumstances of the case and on a true interpretation of the relevant provisions of the Act, the Tribunal is justified in law in holding that the capital gain had escaped assessment at the time of making of the original assessment by the Income-tax Officer during the relevant assessment year and was further justified in upholding the order made by the Commissioner of Income-tax under section 263 of the Act? 3. Whether the conditions for exercise of power by the Commissioner of Income-tax under section 263 have been satisfied and whether, on the facts and in the circumstances of the case, the Tribunal was justified in confirming the order of the Commissioner of Income-tax ? " The facts relating to this reference are that the assessee did not file returns of income for the assessment year 1971-72. The Income-tax Officer issued a notice under section 148 of the Income-tax Act, 1961. The assessee, in compliance with such notice, filed returns of income on March 14, 1977. The Income-tax Officer also completed the assessment in the status of an association of persons under section 143(3) of the Act on March 21, 1979. The assessment was complete ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mmissioner of Income-tax allegedly acted within the four corners of the directions issued by the earlier Tribunal and completed the proceedings under section 263. He again held the view that the capital gains arising out of the acquisition of the land from the payment of compensation was taxable in the hands of the assessee. The assessee, being aggrieved by the said order, again brought the dispute before the Tribunal. The assessee wrote a letter dated July 8, 1987, to the Commissioner of Income-tax at the time of fresh disposal of proceedings under section 263 and raised several objections. The main objection was that the land at Mouza Dhapamanpur, P. S. Bhangur, District 24-Parganas, was acquired by the Extraordinary Gazette Notification dated January 6, 1970, by the orders and notifications by the Governor of West Bengal under section 4 of the West Bengal Land (Requisition and Acquisition) Act, 1948, and, therefore, the effective date of transfer took place on the date of the Gazette notification, i.e., January 6, 1970. It was also contended that the transfer of capital assets took place under section 45 of the Income-tax Act, 1961, on the date of the Gazette notification, i.e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccounting year or not. On the other hand, the learned advocate for the Revenue supported the order of the Tribunal. To appreciate the contentions of Dr. Pal, it is necessary to set out the order of the Tribunal directing the Commissioner of Income-tax to pass a fresh order: "We have perused the order of the Commissioner of Income-tax along with other papers placed before us for our consideration. As pointed out earlier, the first point raised on behalf of the assessee is that the order of the Commissioner of Income-tax under section 263 is invalid inasmuch as the same was passed on an invalid assessment order. The case of the assessee is that the return was filed on March 14, 1977, for the above assessment year, which fact alone indicated that the return was invalid and, therefore, on an invalid return, no valid assessment could be made and, consequently, no order under section 263 could be passed. It is pointed out by the assessee's learned counsel that the Commissioner of Incometax has not considered this aspect of the matter. Besides, it is also in the appeal by the assessee that the Commissioner of Income-tax has not given the assessee sufficient opportunity to rebut the ma ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and should strictly be confined to the order of the appellate authority. Where there is no limitation imposed on the power of the lower authority to make a fresh order, the authority making such fresh order is not precluded from considering all the issues raised in the course of the proceeding held de novo in accordance with the direction of the appellate authority. On a reading of the entire order of the Tribunal, it appears to us that, since the matter was restored to the file of the Commissioner of Income-tax for fresh disposal in accordance with law, it was open to the parties to urge all points of law and facts before the Commissioner of Income-tax to whom the matter has been remanded. It is not a case where the Commissioner of Income-tax was directed only to deal with the contentions urged before the Tribunal. In that event, the Tribunal ought to have clearly said that the Commissioner of Income-tax should confine himself to the issues raised before the Tribunal and that the order was being set aside to that limited extent only. But that is not the case here. The Commissioner of Income-tax was no doubt directed to consider all the issues raised before the Tribunal but, at th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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