TMI Blog1992 (3) TMI 24X X X X Extracts X X X X X X X X Extracts X X X X ..... d an appeal before the Appellate Assistant Commissioner claiming that his income is exempt from income-tax under section 10(26) of the Act. The Appellate Assistant Commissioner entertained the appeal, accepted the claim of the assessee for exemption under section 10(26) of the Act. The Department filed an appeal before the Tribunal contending that the appeal was not maintainable under section 246(1)(c) of the Act and also contending that the assessee is not entitled to exemption under section 10(26) of the Act. The Tribunal upheld the contentions of the assessee and dismissed the appeal. Thereupon, the Department filed a reference application before the Tribunal to refer the question of entertainability of the appeal and also certain other questions arising in regard to the claim under section 10(26) of the Act. The Tribunal referred only the question of entertainability of the appeal and declined to refer the questions arising on merits. Shri D. K. Talukdar, learned standing counsel for the Revenue, desired to make submissions in regard to the merits of the case which the Tribunal declined to refer to the High Court. We did not permit him to make the submissions as they do not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed in the return which, on the basis of the information available in such return, accounts and documents, is, prima facie, inadmissible and give due effect to the allowance referred to in sub- clause (iv). Sub-section (2)(a) enables such an assessee, within one month from the date of service of the notice of demand issued in consequence of such an assessment, to make an application to the Income-tax Officer objecting to the assessment. Sub-section (2)(b) empowers the Income-tax Officer to verify the correctness and completeness of the return by requiring the presence of the assessee or the production of evidence in this behalf, by serving a notice on him, though in a case where an assessment has been made under sub-section (1), the notice under subsection (2)(a) shall not be issued by the Income-tax Officer without obtaining the previous approval of the Inspecting Assistant Commissioner. Sub-section (3)(a) relates to the making of assessment in such cases where no assessment has been made under sub-section (1). Sub-section (3)(b) relates to cases where an assessment has been made under sub-section (1) and either it is objected to by the assessee by an application under subsec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of assessment under subsection (3) of section 143, or section 144, where the assessee objects to the amount of income assessed, or to the amount of tax determined, or to the amount of loss computed, or to the status under which he is assessed. The order of assessment in this case is not one under section 143(3) or section 144. The Appellate Assistant Commissioner and the Tribunal have taken the view that it is an order against the assessee where the assessee denies his liability to be assessed under this Act, and this finding is supported by the assessee and disputed by the Revenue. The first part of section 246(1)(c) of the Act refers to denial of liability by the assessee to be assessed under the Act. The words used in the first part of section 246(1)(c) are of wide import and amplitude and do not contain any restriction regarding the stage of denial. There is no restriction imposed to the effect that the order will be appealable only where the assessee had denied his liability to be assessed under the Act in the return. Such denial could be made at any stage. In relation to the first part of section 246(1)(c), the Legislature used the words " assesses denies " his liability ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeals were dismissed. It was argued for the Revenue that there was no denial before the Income-tax Officer and, therefore, no appeal lay under section 30 of tile 1922 Act which contained the words " Any assessee . . . denying his liability to be assessed under this Act..." The Chief Court observed ( at page 129): The words 'denying his liability to be assessed under this Act' in section 30(1) are not confined to the denial of liability before tile Income-tax Officer but include, and must include, his denial in the appeal filed by him. " The court also observed (at pages 128 and 129): "There is nothing in the Indian Income-tax Act to justify the view that it is incumbent upon the assessee to deny his liability to assessment before the Income-tax Officer to invest him with a right of appeal under section 30 of the Act." Mere filing of a return, therefore, cannot be said to be tantamount to an admission by the person submitting the return that he is liable to assessment . . . It is contemplated that this assessment may be made without any further notice to the assessee, and, therefore, in case the Income-tax Officer has accepted the return, there is no opportunity for the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X
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