TMI Blog1978 (4) TMI 22X X X X Extracts X X X X X X X X Extracts X X X X ..... own file and calling for report from the ITO on the limited question as to whether the business of S. R. Kalani Co. ceased to be the business of the HUF ? 4. Whether the Tribunal is justified in law in directing that the quantum assessment before the ITO shall continue to be under section 144 of the I.T. Act of 1961 ?" The statement of the case submitted by the Tribunal indicates that the assessment years involved are 1963-64 and 1964-65 for which the accounting periods ended on March 31, 1963, and March 31, 1964, respectively. The assessee claimed to be a firm of two partners, Shri S. R. Kalani and his widowed mother, Badami Bai. It was claimed that a firm had come into existence w.e.f. August 17, 1961, on which date there was a partition between Shri S. R. Kalani and his widowed mother, Badami Bai. This question was also raised in the assessment year 1962-63 and the ITO did not accept the claim for partition on the ground that the widowed mother, Badami Bai, became a widow prior to 1937 and, therefore, she is not entitled to claim a share on partition of the HUF property as she was only entitled to maintenance. Consequently, it was held that the claim of partition is not ge ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bunal the assessee submitted an application for making a reference to this court and the Tribunal agreed with the assessee that the question of law arises and has made this reference. It was contended by the learned counsel for the assessee that although s. 144, which is similar to s. 23(4) of the earlier Act of 1922, provides for the best judgment assessment and s. 145 provides for an application to be moved by the assessee for setting aside the best judgment assessment which according to learned counsel is equivalent to s. 27 of the old Act, but according to learned counsel the AAC, while exercising appellate jurisdiction under s. 251, has wide powers to set aside the assessment-even the quantum of assessment-and pass such orders as he deemed fit. Although s. 246 refers to orders against which an appeal could be filed by the assessee and under this section the assessee can also file an appeal where the ITO under s. 146 refuses to reopen the assessment made under s. 144, yet according to learned counsel the appellate jurisdiction of the AAC could not be limited or curtailed on account of the provisions contained in s. 246 as it is clear that the powers have been conferred on th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 144; (e) an order of assessment, reassessment or recomputation under section 147 or section 150;..." It is no doubt clear that cl.(d) of this section specifically provides that an order refusing to reopen an assessment made under s. 144 is itself appealable ; but it is also clear that cl. (c) provides that in an order under s. 144 if 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, still, he can prefer an appeal. It is, therefore, clear that under the provisions of this section even after the best judgment assessment under s. 144 if an assessee does not follow the procedure prescribed in section 146, still he can prefer an appeal under clause (c) of section 246. The word " status " in clause (c) of s. 246 has been explained by the Explanation at the end of s. 246 : Explanation.- 'Status' means the category under which the assessee is assessed as 'individual', 'Hindu undivided family' and so on." This makes it clear that if the assessee is assessed as a HUF or an individual or a firm this question can also be agitated in an appeal under cl.( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal under s. 246. And in this view of the matter, hearing an appeal in the present case if the AAC has set aside the assessment and directed an inquiry in respect of the status of the assessee and thereafter to proceed for a fresh assessment it could not be said that the AAC has gone beyond his jurisdiction which he is exercising under s. 251(1)(a) of the Act. In Naba Kumar Singh v. CIT [1944] 12 ITR 327 (Cal), the question was raised before the Calcutta High Court about jurisdiction in appeal against the best judgment assessment and their Lordships observed : " Coming now to the provisions of the Income-tax Act, section 30 gives the assessees the right to object to the amount of income assessed under section 23 or section 27. They may also object to the amount of tax determined under those sections and they may appeal if they object to the refusal of the Income-tax Officer to make a fresh assessment under section 27. To that extent only has the proviso in the same section of the Act prior to the amendment been limited. What the assessees, are apparently trying to do now as it appears to me is to raise an objection not merely to the amount of the assessment or to the amount of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s held that the Appellate Tribunal had wide powers but they too relate only to the quantum of tax payable. In Padampat Singhania v. CIT [1953] 24 ITR 141 (All), it was held that in an appeal before the AAC against an order under s. 27 the AAC could only consider the quantum of tax imposed but he could not go into the question about the propriety of passing the best judgment assessment. In Mauladin Ayub Firm v. CIT [1959] 35 ITR 449 (Bom), it was observed that in the quantum appeal the AAC was justified in not considering the question whether the assessment was properly made under s. 23(4). In Gaurishanker Kedia v. CIT [1963] 49 ITR 655 (Bom), also it had been held that the only limitation on the appellate jurisdiction is that the propriety of proceeding of best judgment assessment could not be questioned when no steps have been taken under s. 27 for setting aside the best judgment assessment. It is, therefore, clear that even on the basis of these authorities cited by learned counsel the only limitation on the appellate jurisdiction of the AAC which could be inferred is that he could not go into the question of the propriety of the proceedings ex parte and the best judgment assessm ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
