TMI Blog2005 (2) TMI 58X X X X Extracts X X X X X X X X Extracts X X X X ..... gment of the court was delivered by Prakash Krishna J.- The Income-tax Appellate Tribunal, Allahabad, has referred the following question of law under section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), for the opinion to this court: "Whether, on the facts and in the circumstances of the case, the Tribunal was justified in holding that there was no assessment or reassessment of the firm or reduction or enhancement in the income of the firm and that the provisions of section 155(1) had no application to the instant case?" The reference relates to the assessment year 1971-72. The assessee-respondent was one of the partners in M/s. Sanjai Engineering Corporation in the assessment year 1971-72 in question. M ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ut the non-applicability of section 155 of the Act on the ground that section 155 had no application, since there was no assessment or reassessment of the firm, nor it is a case of any reduction or enhancement made in the income of the firm. This plea was accepted by the Tribunal. The relevant portion is quoted below: "We have considered the rival submissions as also the decision referred to above. Section 155 had no application to the facts of the case, since there was no assessment or reassessment of the firm nor it was a case of any reduction or enhancement made in the income of the firm." Heard Shri Shambhu Chopra, learned standing counsel for the Department. None appeared on behalf of the assessee in spite of notice sent by the of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d "assessment" is used in the Income-tax Act in a number of provisions in a comprehensive sense and it includes all proceedings starting with the filing of the return or issue of notice and ending with the determination of the tax payable by the assessee. It is also true that in many sections the word "assessment" is used with reference to the computation of income. The Supreme Court in C.A. Abraham v. ITO [1961] 41 ITR 425 has considered the import of the word "assessment" used in Chapter IV of the Indian Income-tax Act, 1922, dealing with the subject "deductions and assessment" and has held that the expression "assessment" used in these sections is not used merely in the sense of computation of income and there is no ground for holding th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier treated as unregistered by the Income-tax Officer, it is a proceeding for assessment. In proceedings under section 155, the Income-tax Officer amends the order in respect of completed assessment of a partner in a firm on the assessment or reassessment of the firm, on the ground that the share of the partner in the income of the firm has not been correctly included in the income of the partner. Such proceedings, in our view are amendment proceedings, therefore, clearly form part of the proceedings for assessment. Further assistance can be drawn from the scheme of the Act itself. Section 155 is in Chapter XIV of the Act. The heading of said Chapter is "procedure for assessment". Chapter XVI of the Act provides special provisions applica ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... teps must be held to be step in the proceedings for assessment of the firm. Consequently, when the Income-tax Officer passed an order in conformity with the order passed by the appellate authority and treated the firm as a registered firm (earlier it was treated as an unregistered firm) and consequently ordered the refund of the excess income-tax paid by it, it is part of the assessment proceeding of the firm and the partner's share and liability to pay the tax could be rectified. The original assessment was completed in which the share from M/s. Sanjai Engineering Corporation was taken as "unregistered firm" and rebate under section 86 was withdrawn after treating it as a registered firm. The Tribunal was not justified that there was no as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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