TMI Blog1955 (7) TMI 32X X X X Extracts X X X X X X X X Extracts X X X X ..... arated from his two brothers long before 1944. The assessee family had acquired a half share in the firm of Bihar Ginning Factory an Oil Mills, Siwan, for ₹ 64,000 during the accounting year. Then, the firm's books showed net cash credit of ₹ 18,730 in favour of the assessee. In the course of the original assessment for 1946-47 the Income-tax Officer had asked the assessee to explain the nature and the source of the two same, one of ₹ 64,000 and the other of ₹ 18,730. The assessee explained by saying that their father Phagoolal was the karta of the family consisting of himself and his two brothers, Ganeshlal and Bhagilal, and during the period of his kartaship he had misappropriated out of the family funds a sum of ₹ 84,000 and the assessee was possessed of this amount at the time of purchase of the half share in the Bihar Ginning Factory and Oil Mills and that the purchase price of ₹ 64,000 and the cash credit of ₹ 18,730 formed part of the same deflected amount. The Income-tax Officer accepted the explanation so far as it concerned ₹ 64,000 but did not accept it regarding the source of the net cash credit of ₹ 18,730 in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es is manifest. The assessee did not appeal against the order of the Appellate Assistant Commissioner setting aside the assessment and directing a reassessment. In due course the Income-tax Officer made the reassessment for 1946-47 under section 23(3) of the Income-tax Act read with section 31 of the Act and determined the total income of the assessee family at ₹ 86,308 which included the two disputed sums of ₹ 64,000 and ₹ 18,370 after disallowing the objection that they formed part of the misappropriated sum of ₹ 80,000. After an unsuccessful appeal to the Appellate Assistant Commissioner against the reassessment, the assessee appealed to the Income-tax Appellate Tribunal. Before the Tribunal it was contended that the Appellate Assistant Commissioner was not competent to set aside the original assessment and direct an enquiry to be made concerning the sum of ₹ 64,000 and further that as the appeal to the Appellate Assistant Commissioner concerned the sum of ₹ 18,730, the Income-tax Officer had no authority to include in the course of the reassessment the sum of ₹ 64,000 in the total income of the assessee. The Tribunal overruled both t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner to set aside the assessment and remand the case to the Income-tax Officer for fresh assessment . The point taken by him, however, is that in disposing of the appeal by remand, the Appellate Assistant Commissioner cannot travel beyond the grounds taken before him in appeal and permit the Income-tax Officer to include in the re-assessment any sum which was not originally considered chargeable o income-tax, and against which no appeal had been taken in such a way as to work adversary to the assessee. It is contended that the remand should be made according to the usual and known canons which govern remand in an appeal, Reliance was placed on the case of Motor Union Insurance Co., Ltd. v. Commissioner of Income-tax, Bombay [1945] 13 I.T.R. 272. In that case the Bombay High Court was considering the power not of the Appellate Assistant Commissioner, but of the Appellate Tribunal. The Bombay High Court held that on a proper interpretation of sub-section (4) of section 33, the powers of the Appellate Tribunal may, after giving both parties to the appeal an opportunity of being heard, pass such orders thereon as it thinks fit, and shall communicate any such orders to the asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sment made by the Income-tax Officer. Under section 33, a right of appeal to the Appellate Tribunal is given on the order made by the Appellate Assistant Commissioner. That right is given both to the assessee and to the Commissioner. If the assessee feels aggrieved, he has a remedy by way of appeal to the Appellate Assistant Commissioner--a remedy which the Department does not possess. It is true that the Commissioner has powers of revision both under section 33(A) and 33(B). If the Department felt aggrieved, they could move the Commissioner for appropriate order. That is, however, a different question. The important fact is that the Department has no right to appeal gains the order of assessment made by the Income-tax Officer to the Appellate Assistant Commissioner. It is one of the main reasons why such wide powers have been conferred on the Appellate Assistant Commissioner, so that he may pass suitable orders so as to provide relief to both the parties. The position of the Appellate Tribunal is entirely different. Both parties have got right of appeal. If they are aggrieved by the order of the Appellate Assistant Commissioner. If one of the two parties appeals and the other part ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Department, in disposing of an appeal by the aggrieved assessee, though the appeal was confined in its subject-matter to a portion of the order, it would be open to the appellate Assistant Commissioner to deal with the whole of the assessment order of the Income-tax Officer, even to enhance the assessment. It was held that when once an appeal was preferred by an assessee it would not be open to the assessee to withdraw the appeal so as to prevent the Appellate Assistant Commissioner from enhancing the assessment under section 31(3)(a) of the Act. Vide Commissioner of Income-tax, Punjab v. Nawab Shaw Khan [1938] 6 I.T.R. 370, Of course, it would not be open to the Appellate Assistant Commissioner to introduce into the assessment new sources, as his power of enhancement should be restricted only to the income which was the subject-matter of consideration for purposes of assessment by the Income-tax Officer. A similar view was taken by the Allahabad High Court in the case of Commissioner of Income-tax, U.P. and Ajmer Merwara, Lucknow v. Bijli Cotton Mills Ltd., Agra [1953] 23 I.T.R. 278. It follows quite clearly that the Appellate Assistant Commissioner has powers to set aside th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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