COMMISSIONER OF INCOME TAX Vs. ALKEENSONS AGENCIES

JUDGEMENT

(1.) BY this reference under section 256(1) of the Income Tax Act, 1961 (hereinafter referred to as the 'Act'), the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as the 'Tribunal'), has referred the following two questions of law to this court for opinion at the instance of the revenue :

(2.) THE material facts of the case, giving rise to this reference, are as follows : the assessee, Alkeensons Agencies, Srinagar, was assessed by the Income tax Officer, Srinagar, for the assessment year 1973 -74 under section 143(3) of the Act. In the said assessment, the Income tax Officer made an addition of Rs. 26,508 to the disclosed income of the assessee. The assessee challenged the above addition before the Appellate Assistant Commissioner. The Appellate Assistant Commissioner rejected the challenge and sustained the addition on the ground that the assessee itself had agreed to the impugned addition. The assessee appealed to the Tribunal. Before the Tribunal, the assessee did not argue the merits of the addition but, relying upon the decision of this court in S. Mabarik Shah Naqshbandi v. CIT , raised a fresh legal objection that the assessment order was illegal, inasmuch as, the tax demanded from the assessee was not computed in the assessment order itself. This contention of the assessee was opposed by the revenue . The case of the revenue was that the decision of this court in S. Mubarik Shah Naqshbandi v. CIT(supra), had no application to the facts of the present case because here the tax payable by the assessee had been properly calculated in Form I. T. N. S. 150, which was prepared along with the assessment order and formed part of the same. It was contended that in that view of the matter, it cannot be said that the tax payable was not calculated in the assessment order. The Tribunal did not accept the contention of the revenue and held that as tax had not been calculated in the body of the assessment order the decision of this court in S. Mubarik Shah Naqshbandi (supra), was applicable and the impugned assessment was invalid. The Tribunal deleted the additions made by the Income Tax Officer on that count. Aggrieved by the above decision, the revenue sought reference of the questions of law arising out of the order of the Tribunal to this court under section 256(1) of the Act. Hence, this reference.

(3.) IT is clear from the above decision of the Supreme Court that section 143(3) of the Act does not require that both the computations, that is, of the total income as well as of the sum payable, should be done on the same sheet of paper, which is superscribed as 'assessment order'. It does not prescribe any form for that purpose. If the Income -tax Officer first draws up an order assessing the total income and indicating the adjustments to be made, directs the office to compute the tax payable on that basis and then approves of it, either immediately or some time later, no fault can be found with the process, though it is only when both the computation sheets are signed or initialled by the Income Tax Officer that the process described in section 143(3) will be complete. Form I.T.N.S. 150 is also a form for determination of the tax payable and when it is signed or initialled by the Income Tax Officer, it is certainly an order in writing by the Income Tax Officer determining the tax payable, within the meaning of section 143(3) of the Act. The ratio of the above decision of the Supreme Court is squarely applicable to the facts of the present case. The uncontroverted factual position in this case is that the tax payable has been calculated in Form I. T. N. S. 150 which is duly signed by the Income Tax Officer along with the assessment order. The statutory requirement of calculating the tax payable has thus been complied with. There is, therefore, no illegality in the assessment order on that count.