TMI Blog1997 (4) TMI 506X X X X Extracts X X X X X X X X Extracts X X X X ..... el for the assessee as well as the learned D.R. The assessee's counsel has submitted that in appeal against order under section 154, which was against the ITO's order dated 8-3-1990 passed as a result of assessee's application under section 154 for rectification all the adjustments made while passing the assessee's return under section 143(1A) of Income-tax Act. The CIT (Appeals) was not justified after accepting the assessee's pleas that the adjustments made by the Assessing Officer was debatable and were not covered by his powers available under the provisions of section 143(1A), in instructing the Income-tax Officer to issue notice under section 143(2) for making the assessment under section 143(3). The counsel for the assessee has submitted that the CIT (Appeals) has neither any power nor he had jurisdiction to give such directions, therefore, has requested for quashing the directions of the CIT (Appeals) given in para 7 of his order. The assessee's counsel has further submitted that even if it is assumed that the CIT (Appeals) had power to give such directions then also the directions given by the CIT (Appeals) in the present case is not valid in the ey ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals) was pleased to accept the assessee's submission and deleted the adjustments made by the Assessing Officer as a result of which the additional tax charged by the Assessing Officer was also cancelled. However, as per para 7 of his order, the CIT (Appeals) directed the Assessing Officer to make regular assessment after issuing a notice under section 143(2) and while giving such directions the CIT (Appeals) observed that time limit for issuing notice under section 143(2) is already over but such limit is not applicable to the assessment to be made in pursuance of directions of the appellate authorities, and, therefore, extended the limitation for issuing notice under section 143(2). Para 7 of CIT (Appeals) order is reproduced below : 7. In the circumstances of the case as indicated above, it appears to me that the Assessing Officer should verify each and every item of the claim for deduction aggregating to ₹ 1,02,04,033. It is required to be seen as to whether the assessee company satisfies the conditions for deduction under section 43B in respect of various items. Therefore, he is directed to issue a notice under section 143(2) and make regular assessment aft ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he case may be the Commissioner (Appeals) may at the hearing of an appeal allow the appellant to go into any ground of appeal not specified in the grounds, of appeal if the Deputy Commissioner (Appeals) or as the case may be the Commissioner (Appeals) is satisfied that the omission of that ground from the form of appeal was not wilful or unreasonable. (6) The order of the Deputy Commissioner (Appeals) or as the case may be the Commissioner (Appeals) shall communicate the order passed by him to the assessee and to the Chief Commissioner or Commissioner. (7) On the disposal of the appeal, the Deputy Commissioner (Appeals) or the case may be the Commissioner (Appeals) shall communicate the order passed by him to the assessee and to the Chief Commissioner or Commissioner. 6. From the aforesaid provisions we have noticed that it is only sub-section (4) which empowers the CIT (Appeals) to make such further inquiry as he thinks fit or may direct the Assessing Officer to make further inquiry and report the result of the same to the CIT (Appeals), while disposing an appeal. But in our opinion these provisions do not empower the CIT (Appeals) to direct the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Officer shall thereupon proceed to make such fresh assessment and determine, where necessary the amount of tax payable on the basis of such fresh assessment. (b) in an appeal against an order imposing a penalty, he may confirm or cancel such order or vary it so as either to enhance or to reduce the penalty. (c) in any other case, he may pass such orders in the appeal as he thinks fit. (2) The Deputy Commissioner (Appeals) or as the case may be the Commissioner (Appeals) shall not enhance an assessment or a penalty or reduce the amount of refund unless the appellant has had a reasonable opportunity of showing cause against such enhancement or reduction. Explanation - In disposing of an appeal, the Deputy Commissioner (Appeals) or as the case may be, the Commissioner (Appeals) may consider and decide any matter arising out of the proceedings in which the order appealed against was passed, not withstanding that such matter was not raised before the Deputy Commissioner (Appeals) or as the case may be the Commissioner (Appeals) by the appellant. The power available to CIT (Appeals) except as power available in clause (c) of sub-section (1); are amply clear, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Assessing Officer to decide as to whether the assessment under section 143(3) has to be framed or not; which we are afraid is not available with the CIT (Appeals). We are, therefore, of the opinion that the CIT (Appeals) had no jurisdiction to give directions for issuing a notice under section 143(2) of the Income-tax Act. 8. Coming to the assessee's second plea that even if presuming that the CIT (Appeals) had the power to direct the Assessing Officer to serve upon the assessee a notice under section 143(2) then also the directions having been given after the expiry of the period prescribed for service of notice under section 143(2) are bad in law and ab initio void we would like to consider the provisions of section 143(2) which is reproduced as under : Where a return has been made under section 139, or in response to a notice under sub-section (1) of section 142, the Assessing Officer shall, if he considers it necessary or expedient to ensure that the assessee has not understated the income or has not computed excessive loss or has not underpaid the tax in any manner, serve on the assessee a notice requiring him on a date to be specified therein, either to attend ..... X X X X Extracts X X X X X X X X Extracts X X X X
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