TMI Blog1993 (4) TMI 108X X X X Extracts X X X X X X X X Extracts X X X X ..... ct. The order of the learned AAC being erroneous to set aside and the order of the ITO be restored." 2. The relevant facts may be noted. The assessee filed return for assessment year 1984-85 declaring an income of Rs.26,800 and claiming that the assessment should be made in accordance with the provisions of sections 161 and 166. The ITO made assessment with reference to the said return under section 143(1), but, while working out the tax, he levied tax treating the status as AOP with unspecified shares of the members of the Association. 3. Against the said order under section 143(1), the assessee did not move application under section- 143(2)(a). Instead, the assessee filed appeal against the said order to the AAC under section 246(c) of the IT Act, 1961. 4. The learned AAC disposed of the said appeal of the assessee by observing, inter alia, as below: "The question whether order under section 143(1) is applicable or not has been considered by me in several cases of this Range. After considering the various legal provisions, I have held that the order is appealable when the assessee denied his liability to be assessed to tax. This view is based on several decisions includ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment....the ITO shall serve on the assessee a notice requiring presence on a date to be therein unspecified, either to attend at the ITO's office or to produce or to cause to be there produced any evidence onwhich the assessee may rely in support of the return ........" 9. Explanation to the above sub-section makes it clear that-- (i) An assessment under sub-section (1) shall be deemed to be incorrect, in-adequate or incomplete in a material if ......... (a) ............. (b) The amount of tax payable as determined under sub-section (1) is greater or smaller than the amount of the tax properly payable under this Act by the assessee; (c) .............. (d) .............. (e) .............. (f) the status in which the assessee has been assessed under sub-section(1) is different from the status in which the assessee is properly assessable under this Act; 10. In as much as the assessee's grievance in the present case was that the tax charged by the ITO on the returned income was more than was properly payable under the Act by the assessee in terms of section 161/166 of the said Act. the assessment passed by the ITO would be deemed to be incorrect in terms of clause ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment on the beneficiaries. The ITO, instead of computing the assessment in the above manner, computed the tax in terms of section 164 of the IT Act, 1964. It was this determination of tax that was the cause of grievance of the assessee. For this wrong determination of tax, in case it was really true, the remedy, which is open to the assessee, was the one prescribed by clause (a) of sub-section (2) of section 143 of the IT Act, 1961. This remedy was not an appeal against the order in question in terms of clause (c) of section 246 of the IT Act, 1961. This being so, the learned AAC was, in our opinion, wrong in admitting the appeal in question. Accordingly, his order is hereby vacated. 13. In the result, the departmental order stands allowed. Per S.P. Kapur, J.M.-- 14. Since I have not been able to persuade myself with the reasoning and conclusions arrived at by my learned brother the Accountant Member in his proposed order, I am venturing to append thereto, my 'note' of dissent as under:-- 15. The impugned order of the learned first appellate authority against which the revenue is aggrieved reads as under:-- "The question whether under section 143(1) is appealable ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... b-section (1) of section 74 (or sub-section (3) of section 74A) and the deficiency referred to in sub-section (3) of section 80J, as computed in each case, in the regular assessment, if any, for the earlier assessment year or years." Now an order to be an assessment order under section 143(1) of the Act has to be as the law provides i.e., it has to be an assessment order strictly in accordance with section 143(1) in terms of its tenor, import and has to be such in letter and spirit. If the assessment order is labelled as an assessment order made under section 143(1) of the Act but substantially and strictly it is not so as the said section 143(1) provides i.e., 'adjustments' have to be as provided in clause (b) of the said section 143(1) from the assessment order cannot be said to be so but it is an assessment order made under section 144 of the Act or else or 143(3) of the Act and that too without giving a reasonable opportunity of being heard to the assessee. If the 'adjustments' as provided in clause (b) of section 143(1) of the Act have been made then the assessment order may not be an appealable order but if it does not strictly conforms to the requirements of the said secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Bench have difference of opinion on the following point: "Whether on the facts and in the circumstances of this case, assessment order made is an order under section 143(1) of the Act? If so, whether it was an appealable one?" 2. Therefore, by virtue of the provisions of section 24(11) of the WT Act, 1957 read with section 255(4) of the IT Act, we refer the points of difference to the Hon'ble President of the Tribunal for necessary action. THIRD MEMBER ORDER 1. The assessee in this appeal is a trust, which filed its return of income claiming that the assessment should be made under the provisions of sections 161 and 166 of the Income-tax Act, 1961. The Income-tax Officer, however, purporting to make the assessment under section 143(1) computed the income at Rs.26,800 and instead of making the assessment under sections 161 and 166 as prayed for by the assessee, completed the assessment in the status of Association of Persons. Aggrieved by this assessment, the assessee appealed to the Appellate Asstt. Commissioner, Range II,Agra. The question that arose before him, apart from the merits was whether an order passed under section 143(1) of the Income-tax Act was at all a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of demand and should not have filed an appeal to the first appellate authority. Therefore the appeal filed before the first appellate authority was not valid and maintainable. It was this question that arose before the first appellate authority on the appeal filed by the assessee. The first appellate authority dealt with this objection in the following manner:-- "3. The question whether order under section 143(1) is appealable or not has been considered by me in several cases of this Range. After considering the various legal provisions. I have held that the order is appealable when the assessee denies his liability to be assessed to tax. This view is based on several decisions including the Supreme Court in the case of CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225. I therefore, hold that the appeal is maintainable." Having thus held that the appeal was maintainable, he went into the merits and having found that the Income-tax Ofricer's act was without jurisdiction, directed him to charge the tax according to the provisions of sections 161 and 166 as claimed by the assessee. 2. The department was aggrieved by this order. It filed appeal before the Tribunal stating in particu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he parameters of that code and should not be permitted to travel beyond it transgressing the permissible limits. When an efficacious remedy was provided for in section 143(1), that alone should be taken recourse to and the assessee should not be permitted to take alternative remedy provided. If the assessee had failed to raise objections within one month to the assessment made under section 143(1), the assessee could have filed a revision petition before the Commissioner of Income-tax under section 264 and got the remedy. The assessee chosing neither of those courses preferred an appeal to the Appellate Asstt. Commissioner, which was never provided for in section 246. The right of appeal not being an inherent right of appeal and has to be availed of only when a Statute expressly provides for it and when the Statute provided for no appeal against an order passed under section 143(1), no appeal shall lay against that order and the Appellate Asstt. Commissioner was therefore wrong in saying that such orders were appealable. The reliance upon the judgment of the Supreme Court in the case of CIT v. Kanpur Coal Syndicate [1964] 53 ITR 225 was totally misplaced. She therefore urged that t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an assessee to seek relief under sub-section (2) of section 143 there must be an assessment made under sub-section (1) of section 143. An assessment made beyond the reach of sub-section (1) could not be called an assessment made under sub-section (1) of section 143 merely by so labelling it. The substance of the matter has to be looked into. If in substance the assessment made by the Income-tax Officer is not an assessment made under sub-section (1) of section 143, then it ceases to be an assessment made under section 143(1) and therefore the remedy provided for in sub-section (2) of section 143 is not available to the assessee and the assessee is not obliged or can be compelled to seek the remedy provided for in sub-section (2). Thereafter to seek remedy against an assessment made in violation of sub-section (1) is either under section 264 or under section 246. It is from this point of view that I am inclined to agree with the view expressed by the learned Judicial Member. The Income-tax Officer in this case has changed the status of the assessee and applied a different rate of tax by applying different provisions of the Income-tax Act, which were not the adjustments referred to i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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