TMI Blog1982 (5) TMI 3X X X X Extracts X X X X X X X X Extracts X X X X ..... y and promised to pay the balance before or at the time of the execution of the sale deed. The petitioner could buy the property in his own name or in the name of his nominee or nominees partly in his name and partly in the names of his nominees and in one lot or in pieces and at one time or at different times. The possession of the bungalow except for the portion occupied by the Kapoor was delivered to the petitioner who was entitled to make additions or alterations therein without diminishing the value of the property. It was further agreed that the petitioner could prepare layout plan for the development of the said property and get the necessary sanction therefor. The transaction was agreed to be completed within two years, that is by May 18, 1969, provided Sri Kapoor vacated the portion occupied by then, and in case he did not do so the price would stand reduced by Rs. 5,000. It was further provided in the agreement that during the said period of two years if the petitioner wanted that any portion of the said property may be conveyed to any other person, the company would sell the same to the said person as the petitioner's nominee and the price was to be paid at the rate of R ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... : Rs. 1. Sale price of the plots realised on the sale of the same to the nominees of the petitioner 1,04,000 2. Value of the plots retained by the petitioner 86,625 at the rate of Rs. 15,000 per bigha 3. Value of the construction portion 30,000 -------- 2,20,625 -------- Less : Cost 1,35,000 -------- 85,625 -------- It may be noted that the petitioner had admitted before the ITO that the land left with him after the sales made to his nominees by the company was his stock-in-trade but the question of taking any profit did not arise until the entire land had been eventually sold. Furt ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d and the assessee should also be given the benefit of the development expenditure, if any, incurred for developing the land. " The Tribunal agreed with the Appellate Assistant Commissioner in respect of the other two additions made by the Income-tax Officer, that is, with regard to land sold to Smt. Kochhar and the other sold to Smt. Bawa. The case set up by the petitioner is that, after the remand of the case, the Income-tax Officer instead of confining himself to the directions given by the Tribunal, required the petitioner to furnish details of the account of Economical Builders and Gange Corporation for the last two years and details of advance of Rs. 2,84,337. Some other queries also were made. The petitioner submitted a reply to that notice. The Income-tax Officer then issued another notice on March 3, 1979, under section 142(1) of the Income-tax Act, 1961 (hereinafter referred to as " the Act "), requiring the petitioner to produce certain account books and documents. The assessee complied with that notice also. On March 9, 1979, the Income-tax Officer issued another notice under section 143(3) of the Act requiring the petitioner to give details regarding sale of gree ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the remand order and look into the matters which were not the subject-matter of appeal before the Tribunal. The second question is as to whether a notice under s. 148 could be issued when the assessment proceedings were still pending. We shall take up these questions one by one. Section 251 of the Act provides for the powers of the AAC and s. 254(1) lays down the powers of the Appellate Tribunal. Section 251 reads as under? " 251. (1) In disposing of an appeal, the Appellate Assistant Commissioner shall have the following powers (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; or he may set aside the assessment and refer the case back to the Income-tax Officer for making a fresh assessment in accordance with the directions given by the Appellate Assistant Commissioner and after making such further enquiry as may be necessary, and the Income-tax Officer shall thereupon proceed to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment... 2. The Appellate Assistant Commissioner shall not enhance an assessment or a penalty or reduce the amount of refund u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the powers except the power of enhancement which is conferred upon the AAC by s. 251. The distinction that the AAC is competent to examine all matters covered by assessment order while the Tribunal is to confine itself to the subject-matter of the appeal is also to be kept in view. The scope of ITO's powers to make a fresh assessment under an order of remand passed by the appellate authority has come up for consideration in numerous cases. This court in J. K. Cotton Spinning Weaving Mills Co. Ltd. v. CIT [1963] 47 ITR 906, laid down that where on an appeal from an assessment the AAC set aside the assessment and directed the ITO to make a fresh assessment, the ITO is bound by the directions of the AAC in making the fresh assessment. But subject to those directions, he has the same powers in a fresh assessment as he had originally when making an assessment under s. 23 of the Indian I.T. Act, 1922. The same View was reiterated in Abhai Ram Gopi Nath v. CIT [1971] 79 ITR 339 (All). The Kerala High Court in K. P. Moideenkutty v. CIT [1981] 131 ITR 356, has held that the competence of the AAC is not restricted to deal with the subject-matter of the appeal. He may examine all matters ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al was heard. When the remand is made by the Tribunal the position is different. The powers of the Tribunal are confined to the subject-matter of appeal as constituted by the original grounds of appeal and such additional grounds as may be raised by the leave of the Tribunal. Thus, when the Tribunal allows the appeal and sets aside the assessment and remands the case for making a fresh assessment, the power of the ITO is confined to such subject-matter only. He cannot take up the questions which were not the subject-matter of appeal before the Tribunal. This will be so even though no specific direction has been given by the Tribunal. If a specific direction is given, then there is no scope whatsoever for the ITO to travel beyond those directions or restrictions. In the instant case the matter had come up before the Tribunal in the appeal filed by the Revenue. The Revenue had challenged the deletion of three additions, viz., Rs. 85,625 profit on sale of land Rs. 3,420, profit on sale of land to Smt. Bawa and Rs. 2,268 profit on plot sold to Smt. Krishna Kochhar. In regard to the latter two additions the Tribunal agreed with the AAC and held that in respect of sale of land to Smt. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, in consequence of information in his possession, reason to believe that income has escaped assessment. In the notice which was issued under s. 148 to the petitioner it was not stated as to whether the ITO proposed to proceed under cl. (a) or cl. (b) of s. 147. All that was stated was : " Whereas I have reason to believe that your income chargeable to tax for the assessment year 1970-71 has escaped assessment within the meaning of s. 147 of the Income-tax Act, 1961. " Anyhow, the reason to believe has to be that income has escaped assessment. So long as the assessment is pending, the assessing authority cannot have any such reason to believe that income for the year has escaped assessment. Income cannot be said to have escaped assessment within the meaning of this section if the assessment proceedings in respect of that income are still pending and have not yet terminated in final order. This question came up for consideration before the Supreme Court in Ghanshyamdas v. Regional Assistant Commr. of Sales Tax [1964] 51 ITR 557 ; [1963] 14 STC 976. Relying on the decision of the Calcutta High Court in Re Lachhiram Basantlal [1931] ILR 58 Cal 909; AIR 1931 Cal 545 and of the jud ..... X X X X Extracts X X X X X X X X Extracts X X X X
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