TMI Blog1992 (12) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... d under section 143(3) on 31-1-1985 determined the total income at Rs. 2,16,607. The Income-tax Officer also granted deductions under section 80M and section 80K totalling Rs. 1,25,116 and the taxable income was determined at Rs. 91,491. On 30-8-1985 the ITO passed an order under section 154. In the said order it was stated that deduction under section 80M was allowed on gross basis without making any deduction for the expenses incurred for earning the dividend. The assessment order was modified by deducting the expenses and computing the deduction under sections 80M and 80K at Rs. 70,044. Subsequently on 10-12-1985 another order under section 154 was passed by the ITO, In this order the ITO added back Rs. 8,022 being the difference in tota ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t year 1982-83 there is a loss of Rs. 85,489 and it has been set off against the capital gain of Rs. 1,51,637 included in the gross total income. Over and above that, the ITO also set off carried forward loss of Rs. 49,959 against the dividend income charged to tax under other sources. According to the CIT the ITO should have considered the claim of the assessee in the light of the provisions of section 72 and he had not conducted necessary enquiry by calling for the details before passing the assessment order. CIT therefore held that the assessment order passed without conducting necessary enquiries was erroneous and prejudicial to the interest of Revenue on the basis of several decisions of the High Courts. Finally the CIT passed the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter of course. The Departmental Representative resisted the additional ground stating that it was not raised before the CIT and the Appellate Tribunal should not permit the additional ground to be taken for the first time before the Income-tax Appellate Tribunal. On this issue in Ahmedabad Electricity Co. Ltd. v. CIT [1992] 106 CTR (Bom.) (FB) 78, Bombay High Court held that under section 254(1) the Appellate Tribunal may, after giving both the parties to the appeal an opportunity of being heard, " pass such orders thereon as it thinks fit " and this provision gives very wide powers to the Appellate Tribunal and there is nothing in section 254 which would restrict the powers of the Appellate Tribunal, while considering an appeal before it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal grounds to be raised so long as these grounds are in respect of the subject matter of the proceedings. As the additional ground before us relates to the validity of the proceedings under section 263 and pertains to the subject matter of the appeal we grant permission and allow the additional ground to be raised. 5. As already noted in this case the assessment order passed on 25-1-1985 was modified by the orders passed under section 154 on 30-8-1985 and 10-12-1985. The contention of the assessee is that the time limit of 2 years for passing the order under section 263 is to be calculated with reference to end of the financial year during which the assessment order was passed i.e., with effect from 31-3-1985. The rival contention of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... effect to the order of the CIT the original assessment order gets merged in the appeal order but the order giving effect to the appellate order remains an independent order, unaffected by any merger and the Commissioner can exercise jurisdiction under section 263 qua such order. In the case of Modem Roofings Ltd. v. ITO [1986] 17 ITD 489 (Hyd.) the Appellate Tribunal held that the ITO while giving effect to the order of the CIT (Appeals), must have been held to be still acting under section 143 in the process of assessing the total income of the assessee and when the order was passed by the ITO, the Commissioner had power to revise the final assessment order and the period of limitation has to be calculated with reference to such order. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... setting aside the assessment order on the specific issue of set off of carried forward loss. At the time of hearing the appeal the learned Counsel for the assessee stated that the CIT has not said in the disputed order in what manner the assessment order is wrong. It is also stated that the Income-tax Officer has conducted the necessary enquiry and rectified the assessment. Relying upon the CIT v. Ratlam Coal Ash Co. [1988] 171 ITR 141 (MP), CIT v. Kashi Nath Co. [1988] 170 ITR 28 (All.), the learned Counsel for the assessee stated that the CIT must give reasons for his conclusion that the assessment order is prejudicial to the interest of the Revenue. If the Commissioner failed to specify as to how the order passed by the ITO can be held ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
