COMMISSIONER OF INCOME TAX Vs. M PYNGROPE

JUDGEMENT

(1.) THE following question has been referred to this Court under S. 256(1) of the INCOME TAX ACT, 1961 (for short, "the Act'') by the Tribunal, Gauhati Bench, Gauhati at the instance of the Revenue :

(2.) THE assessee is an employee of the Meghalaya Government. He submitted under S. 139 of the Act his return of income on 16th March, 1979 for the asst. year 1978 -79, the accounting period being 1977 -78. The ITO accepted the return as correct and complete and assessed the total income of the assessee and determined the tax payable by him under S. 143(1) of the Act. The assessee filed an appeal before the AAC claiming that his income is exempt from income -tax under s. 10(26) of the Act. The AAC entertained the appeal, accepted the claim of the assessee for exemption under S. 10(26) of the Act. The Department filed an appeal before the Tribunal contending that appeal was not maintainable under S. 246(1)(c) of the Act and also contending that the assessee is not entitled to exemption under S. 10(26) of the Act. The Tribunal upheld the contentions of the assessee and dismissed the appeal. Thereupon, the Department filed a reference application before the Tribunal to refer the question of entertainability of the appeal and also certain other questions arising in regard to claim under S. 10(26) of the Act. The Tribunal referred only the question of entertainability of the appeal and declined to refer the questions arising on merits.

(3.) IT is contended for the Revenue that when a return is made and the same is accepted as correct and complete by the ITO and assessment is made on that basis, while it may be open to the assessee to file an application under S. 143(2) of the Act, or invoke the revisional jurisdiction under s. 264 of the Act, the order cannot be challenged in appeal under S. 246(1)(c) of the Act. These contentions are rebutted by learned counsel for the assessee, according to whom the first part of cl. (c) of S. 246(1) is wide enough to include an appeal preferred by an assessee where assessment is made accepting the return of the assessee who had omitted to claim exemption in the return.