9911796707
TMI Blog1996 (2) TMI 119X X X X Extracts X X X X X X X X Extracts X X X X ..... o decide this reference by a separate judgment and accordingly decided in Income-tax Reference No. 28 of 1991 (Aspinwall and Co. Ltd. v. CIT (No. 1) [1996] 220 ITR 611) in that way. The assessment year in question is 1980-81 posing the question referred for our consideration and consequent decision as follows : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the assessment made on the second draft assessment was valid ? " The necessary factual matrix is available in paragraph three of the order of the Tribunal (annexure "P"). We find therefrom that the Income-tax Officer prepared a draft assessment order on July 7, 1981, and forwarded the same to the Inspecting Assistant Commissioner f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed office. On the basis of the provisions of section 144B(1) of the Act, it is contended and as such the issue referred is framed that there can be only one draft assessment order, ruling out justification of the second draft order altogether as is crystal clear from the language of the section. Reading the contents of section 144B of the Act, it would appear and it is submitted accordingly that when the Income-tax Officer proposes to make any variation in the income or loss prejudicial to the assessee, the Income-tax Officer has to forward a draft of the proposed order of assessment to the assessee. The provision is further elicited specifying inviting objections and procedure to deal with the objections on the basis of the draft order. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner on the other, in regard to the matters which are considered necessary or expedient in regard to which certain directions are decided. The provisions also relate to a situation requiring a fresh look at situations which have escaped assessment and in that process certain safeguards are provided and it will have to be observed that these safeguards are provided for the protection of the interest of the assessee in question. The safeguards relate to the right of hearing on the basis of principles of natural justice statutorily embodied as a consequence. The normal position that the succeeding authority has to carry forward the situation from the stage at which the situation is left by the earlier authority, it cannot be disputed, would be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T [1982] 138 ITR 518, and it is observed that the provision is only on procedural matter and would be only in the nature of a procedural irregularity curable by appropriate directions by the Income-tax Officer, the prime legislative intent being to safeguard the interest of the assessee, by giving him to raise an objection, against the additions proposed to be made by the Income-tax Officer. Mention must be made to the decision of the Delhi High Court in Sudhir Sareen v. ITO [1981] 128 ITR 445 laying down a proposition that only one draft order of assessment could be passed and the Income-tax Officer in this connection cannot be understood to have any power to issue more than one draft order. Although the decision is of the learned single ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ence when the material on record clarifies the situation to the contrary, bringing on record a situation of modification in the nature of necessary amendment to the original situation. In our judgment, such statutory provisions relating to the matters of procedure cannot be under stood in the restrictive sense of literal interpretation and have to be understood that an occasion of issuance of draft assessment has to be meaningfully understood in relation to an occasion for modification. Such occasion cannot be in isolation in continuity of time and such occasion can be legitimately contemplated to occur more than once depending on the situation demanding. In our judgment, the Tribunal has taken the correct view of the situation and accordi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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