TMI Blog1997 (3) TMI 130X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income-tax Act, 1961. He, therefore, held that the assessment order was erroneous, insofar as it was prejudicial to the interests of the revenue. He issued a show-cause notice under section 263. On the date of hearing, Shri V.P. Vijh, C.A., attended and the case was discussed by the learned CIT with him. He also filed a written reply dated 18-3-1996. In the said reply, it was submitted that there was no error in the order of the Assessing Officer dated 29-7-1994 and the reported decisions relied upon by the learned CIT, in fact, supported the order made by the Assessing Officer. A reference was made to the decision of the Andhra Pradesh High Court in the case of A. Sanyasi Rao v. Government of Andhra Pradesh [1989] 178 ITR 31/43 Taxman ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lls for a different consideration. Even according to revenue the provisions (sections 44AC and 206C) are only "machinery provisions". If so, why should the normal reliefs afforded to all assessee's be denied to such traders ? Prima facie, all assessees similarly placed under the Income-tax Act are entitled to equal treatment. In the matter of granting various reliefs provided under sections 28 to 43C the assessees carrying on business are similarly placed and should there be a law, negativing such valuable reliefs to a particular trade or business, it should be shown to have some basis and fair and rational. It has not been shown as to why the persons carrying on business in the particular goods specified in section 44AC are denied the reli ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... -- (a) The object of sections 44AC and 206C was to enable the revenue to collect the legitimate dues of the State from persons carrying on particular trade in view of the peculiar difficulties experience in the past. In order to prevent evasion of tax legitimately due on certain incomes, sections 44AC and 206C were enacted so as to facilitate the collection of tax on that income, which is bound to arise or accrue, at the very inception itself or at an anterior stage. (b) The aforesaid provisions are akin to advance-tax and that the standard by which the amount of tax is measured, being the purchase price, will not in any way alter the nature and basis of levy, i.e. the tax imposed is a tax on income. It cannot be labelled as a tax on pu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onstitution and that the said provisions were not hit by Article 14 of the Constitution. In the process, the Hon'ble Supreme Court observed as follows :-- "However, the denial of relief provided by sections 28 to 43C to the particular business or trades dealt with in section 44AC calls for a different consideration. There is no reason why the persons carrying on business in the particular goods specified in section 44AC are to be denied the reliefs available to others. The denial of such reliefs to trades specified in section 44AC, available to other assessees, has no nexus to the object sought to be achieved by the Legislature. Hence, to the extent the non obstante clause in section 44AC excludes the provisions of sections 28 to 43C (app ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... High Court had observed that it does not dispense with the regular assessment altogether. After the tax is collected in the manner provided by section 206C a regular assessment will be made where the profits and gains of the business in specified goods will be ascertained in accordance with sections 28 to 43C. The Hon'ble Supreme Court have concurred with the aforesaid conclusion of the Andhra Pradesh High Court on this aspect. In view of the foregoing, we feel that the learned CIT was justified in directing the Assessing Officer to recompute the taxable income of the assessee in the light of the provisions of section 44AC read with sections 28 to 43C, as the assessment made under section 143(1)(a) cannot be called a regular assessment in v ..... X X X X Extracts X X X X X X X X Extracts X X X X
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