TMI Blog1981 (1) TMI 53X X X X Extracts X X X X X X X X Extracts X X X X ..... 144B(1) was neither signed nor dated. The learned Advocate-General who appears for the petitioner contended that since this was not properly authenticated and there was no authenticity about the order which was at this stage the draft of the proposed order, the order itself was non est and, therefore, the subsequent proceedings by the third respondent herein, of passing the final assessment order in terms of that draft order is a nullity and, therefore, the final assessment orders based on the strength of the draft of the proposed order were a nullity. The learned Advocate-General has relied on two decisions of the Calcutta High Court which go to show that a notice under s. 34 of the Indian I.T. Act, 1922, if it was not signed by the ITO ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s, that part of the decision of the Supreme Court would not be applicable. The Supreme Court there held that a party claiming to be aggrieved by the action of a public body or authority on the plea that the action is unlawful, highhanded, arbitrary or unjust is entitled to a hearing of the petition on the merits. Before we proceed further to decide upon the question urged by the learned Advocate-General, we must point out the scheme of s. 144B of the I.T. Act. Under s. 143(3) of the I.T. Act, hearing has to be given by the ITO before an assessment order is passed. However, a new procedure has been evolved under s. 144B which was inserted by the Taxation Laws (Amendment) Act, 1975, with effect from January 1, 1976, to the effect that: " ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh (wherever necessary) the records relating to the draft order, issue, in respect of the matters covered by the objections, such directions as he thinks fit for the guidance of the Income-tax Officer to enable him to complete the assessment: Provided that no directions which are prejudicial to the assessee shall be issued under this sub-section before an opportunity is given to the assessee to be heard." Under sub-s. (5): " (5) Every direction issued by the Inspecting Assistant Commissioner under sub-section (4) shall be binding on the Income-tax Officer." And it is after the directions are received by the ITO from the IAC that he completes the assessment and then passes the final order of assessment in the particular case. The lea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , therefore, what is material for the purpose of limitation under subs. (2) of s. 144B is the date when intimation is given to the assessee and it is from the date of the receipt of the draft of the proposed order that the limitation would start so far as the filing of the objections is concerned. The proposed order of assessment cannot bear any date because it is only the proposed order and the final order will have to be passed in case no objections are raised at a subsequent future date and if any objections are filed, the order of assessment will be passed after directions are issued by the IAC. Again, the signing of the proposed order itself, in our opinion, is of no significance whatsoever because what is required to be signed is the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the contention urged by the learned Advocate-General based on the analogy of the notice under s. 34 following the two decisions of the Calcutta High Court cannot be accepted. The notice under s. 34 must be a valid notice as pointed out by the Supreme Court in Narayana Chetty's case [1959] 35 ITR 388 and if it is not a valid notice because it is not signed as pointed out by the Calcutta High Court, it cannot be the basis of the reopening of the assessment because a valid notice is the condition precedent to the reopening of an assessment under s. 34 of the 1922 Act. What is required to be done under s. 144B, on the other hand, is the forwarding of the draft of the proposed order of assessment and that is the obligation of the ITO. Of cour ..... X X X X Extracts X X X X X X X X Extracts X X X X
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