COMMISSIONER OF INCOME TAX Vs. GUPTA TEXTILES

JUDGEMENT

(1.) THIS is an appeal filed by revenue (CIT) under section 260A of the Income Tax Act against an order dated 21 -04 -1999, passed by ITAT in ITA No. 512/Ind/95.

(2.) HEARD Shri R.L. Jain, learned senior counsel with Ku~ V. Mandlik, learned counsel for the revenue and Shri Sarda, learned counsel for the assessee.

(3.) THE issue in substance that arose before the taxing authorities was in relation to powers of assessing officer while passing the order under section 143(1)(a) of the Income Tax Act. In this case, assessee filed a return as firm. However, in exercise of powers conferred under section 143(1)(a), the assessing officer treated the assessee as AOP and sent them intimation for being assessed as AOP in place of Firm. It is essentially this question which was gone into upto Tribunal. By impugned order, the Tribunal inter alia held that while exercising the powers under section 143(1)(a) of the Act, the assessing officer can not change the status of assessee to his detriment. It was held that such change does not amount of prima facie adjustment within the meaning of section 143(1)(a). In other words, it was not an adjustment which could be done on the basis of the return filed by the assessee. In this view of the matter, the Tribunal while restoring the status of assessee as firm directed the assessing officer to assess the assessee in their capacity as firm and not in their capacity as AOP as mentioned in intimation sent under section 143(1)(a) ibid.