COMMISSIONER OF INCOME TAX Vs. BANDARU SANYASI RAJU

JUDGEMENT

(1.) AT the instance of the Commissioner of Income-tax, Andhra Pradesh, Hyderabad, the Income-tax Appellate Tribunal, Hyderabad Bench-B, referred the following question under s. 256(1) of the I.T. Act of 1961, for the opinion of this court :

(2.) THE assessee is a kirana and groundnut merchant carrying on money lending business. He filed a return disclosing an income of Rs. 9,160 for the assessment year 1970-71. THE ITO, however, computed the total income at Rs. 50,410 adding six different items to the income returned by the assessee. THE assessee filed an appeal to the AAC. In that appeal, the AAC granted relief to the assessee in respect of the first three additions made by the ITO but otherwise upheld the order of the ITO, with regard to the other three additions. THE AAC passed an order setting aside the order of the ITO and directed him to re-examine the issue afresh and pass orders. THE effect of the order passed by the AAC was to direct the ITO to consider the matter excluding the above three items.

(3.) THE arguments of the revenue went beyond the exact scope of the question referred. It is argued for the revenue before us that s. 251(1)(a) of the Act which confers appellate powers on the AAC clothes him only with powers to "confirm, reduce, enhance or annual the assessment" or "to set aside the assessment and refer the case back to the ITO for making a fresh assessment in accordance with the directions given by the Appellate Assistant Commissioner". It is the argument of the revenue that the sweep of this language is not wide enough to authorise the AAC to make the present order deleting three items from the assessable income of the assessee while directing the ITO to assess the assessee afresh. It is said for the revenue that such an order amounts to allowing the appeal in part fettering the powers of the ITO and such an order could be made only in exercise of the powers of remand which have not been conferred on the AAC by s. 251(1)(a) of the Act.