COMMISSIONER OF INCOME TAX Vs. DHANALAKSHMI MILLS LIMITED

JUDGEMENT

(1.) THE factual matrix in the background of which the questions referred for our decision are required to be considered may first be set out before we deal with the questions.

(2.) THE assessee, which is a textile company, had furnished its return for the assessment year 1980-81. THE return was filed on November 3, 1980, showing a total income of Rs. 42,83,750. On November 8, 1982, the Income-tax Officer acting under Section 144B forwarded a draft assessment order proposing to assess the income of Rs. 48,64,844, as the enhancement of the income for the purpose of assessment was higher by more than Rs. 1,00,000 as compared to the amount shown in the return. On November 30, 1982, the assessee gave its objections. THE objections along with the draft assessment order were duly forwarded to the Inspecting Assistant Commissioner on January 7, 1983, the Inspecting Assistant Commissioner after some discussions with the assessee, sent a memo to the Income-tax Officer pointing out that certain aspects have not been properly considered, and requesting him to send another draft order on or before January 31, 1983. THE Income-tax Officer sent a second draft assessment order on February 1, 1983, proposing to assess a sum of Rs. 50,68,515. On February 26, 1983, the Inspecting Assistant Commissioner gave his directions and assessment was completed on a total income of Rs. 50,41,738. THE assessee, being aggrieved, appealed to the Commissioner of Income-tax (Appeals) who upheld the assessee's objections that Section 144B did not authorise the Income-tax Officer to make a second draft assessment order. THE Commissioner relied upon the decision of the Delhi High Court in Sudhir Sareen v. ITO [1981] 128 ITR 445. That order of the Commissioner was taken up in further appeal by the Revenue. THE Tribunal has rejected the Revenue's appeal and confirmed the order of the Commissioner.

(3.) THERE are several differences as between Section 144A and Section 144B. Section 144A vests general and unlimited power to the Deputy Commissioner in giving directions to the Assessing Officer for the purpose of enabling him to complete the assessment. The power, which may be exercised suo motu or at the instance of the assessee or the Assessing Officer, is not a power, which is required to be exercised in the case of every assessment. It is only when one of the three parties choose to invoke the provision that the occasion for the exercise of the power under Section 144A will arise.