TMI Blog1989 (4) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... s were added in the assessment order dated March 29, 1976. "Penalty notice under sections 271(1)(c) and 273 have already been issued. Assessed. Issue documents." The assessment order was duly signed, by the Income-tax Officer and below the assessment order there was added a depreciation chart and certain annexures. This was also signed by the Income-tax Officer. A copy of the assessment order is annexure "A" in the paper book. However, at the top of the order "draft order" is written. The Income-tax Officer communicated the order dated April 7, 1976, passed under section 144B(3) of the Act to the assessee. It is in the following terms: "The draft assessment order served op. March 30, 1976, on you should be treated as final as the s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... "(1) Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the assessment framed is not null and void ? (2) Whether, on the facts and in the circumstances of the case, the Tribunal is correct in law in holding that the provisions of section 144B of the Income-tax Act, 1961, are not mandatory but are only advisory and that the Income-tax Officer is not bound to conform to the provisions of section 144B in case the addition to be made to the declared income of the assessee exceeds the prescribed amount and further that he is not bound by the directions of the Inspecting Assistant Commissioner, if given under section 144B ? (3) Whether, on the facts and in the circumstances of the cas ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s done in this case. Once the order dated March 29, 1976 was not a draft order but was a final order, the assessee was not obliged to Me objections within seven days of the receipt of the order and thus the order dated April 7, 1976, passed by the Income-tax Officer also could not be allowed to stand. Whether the provisions contained in section 144B of the Act are called mandatory or statutory, the result is the same, namely, that if the Income-tax Officer wants to add more than a lakh of rupees to the returned income, he has to follow the procedure contained in section 144B of the Act before doing so. The next question is, what is the power of the Commissioner of Income-tax (Appeals) in such a situation. Section 251(1)(a) of the Act aut ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uted that an appellate authority has jurisdiction to notice any error in the order of the lower authority and to grant appropriate relief. Where the mistake can be corrected at the appellate stage after due opportunity, a decision can be rendered. Where it becomes necessary to remand the matter to the original authority, that course can be followed. All illegal and erroneous orders are not null and void but all null and void orders also partake of the character of being illegal and erroneous and can be rectified in appeal. Illegal and erroneous orders, if not appealed against, bind/the parties, but if a null and void order is not appealed against, it may not bind the party against whom it is passed and it will be open to the aggrieved party ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssessment can be framed before the expiry of two years from the end of the financial year in which the order under section 146 of the Act cancelling the assessment is passed by the Incometax Officer or in pursuance of an order passed under sections 250, 254, 263 and 264 of the Act. Section 250 of the Act pertains to the first appellate order and section 254 of the Act pertains to the orders of the Appellate Tribunal. Since the order of remand is passed for framing a fresh assessment, the limit would stand enlarged as indicated by sub-section (2A) of section 153 of the Act. There is yet another, non obstante clause in section 153(3) of the Act. It provides that the provisions of sub-sections (1) and (2) shall not apply to the classes of a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... wants to make additions which exceed the prescribed amount. The directions issued by the Inspecting Assistant Commissioner given under section 144B of the Act are no doubt for the guidance of the Income-tax Officer but are binding upon him by virtue of section 144 B (5) of the Act. Question No. 3 : This question is answered in favour of the Revenue, that is, in the affirmative, that the Income-tax Officer has jurisdiction to add over a lakh of rupees but before doing so, he has to follow the procedure given in section 144B of the Act. Question No. 4 : Under this question, it is answered that if the Income-tax Officer does not follow the procedure laid down in section 144B of the Act, it is not fatal to the framing of a fresh assessmen ..... X X X X Extracts X X X X X X X X Extracts X X X X
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