COMMISSIONER OF INCOME TAX Vs. SUNDARAM CLAYTON LIMITED

JUDGEMENT

(1.) IN pursuance of the direction of this court the Appellate Tribunal has stated a case and referred the following question of law for our consideration :

(2.) THE assessee is a company and it was assessed for the assessment year 1974-75 in the status of a company in which the public are not substantially interested. THE assessee went on appeal against the order of assessment to the Commissioner of Income-tax (Appeals) challenging the part of the order holding that the assessee is a company in which the public are not substantially interested and in the appeal filed, it challenged certain other disallowances made in the computation of its income. THE Commissioner of Income-tax (Appeals) granted relief in respect of certain additions made but set aside the order of assessment on the question of status alone. THE Commissioner of Income-tax (Appeals) held that it was fair and reasonable to send back the matter to the Income-tax Offieer to deal with the question of status de novo on the lines indicated in the order of the Appellate Tribunal for the preceding assessment year 1973:74, in I. T. A. No. 275(Mds) of 1977-78, dated December 12, 1978. THE Revenue appealed to the Income-tax Appellate Tribunal in respect of the relief granted and contended that the order of the Commissioner of Income-tax (Appeals) setting aside the assessment only on one point, viz., the determination of the status of the assessee would create an anamolous situation for the Income-tax Officer while making the reassessment in pursuance of the direction of the Commissioner of Income-tax (Appeals). THE Tribunal did not accept the contention urged on behalf of the Revenue on the ground that it was purely a matter of judicial discretion on the part of the Commissioner of Income-tax (Appeals) and when the Revenue did not dispute the position that the question of status was required to be reconsidered after a thorough investigation of all necessary facts, it will not affect in any way the consideration of the other matters of the assessment. In this view of the matter, the Tribunal dismissed the appeal preferred by the Revenue and on the basis of the directions of this court, the question of law set out supra has been referred to us.

(3.) SINCE the question of law proceeds on the basis that there was a partial setting aside of the order by the Commissioner of Income-tax (Appeals) we are of the view that the question should be reframed and the proper question is as under :