HINDUSTAN ZINC LIMITED Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THE Income-tax Appellate Tribunal, Jaipur Bench, Jaipur, has referred the following question of law arising out of its order dated July 24, 1981, in respect of the assessment year 1976-77 under Section 256(1) of the Income-tax Act, 1961 :

(2.) THE brief facts of the case are that while finalising the assessment for the accounting period ending on March 31, 1976, i.e., assessment year 1976-77, a draft order under Section 144B of the Act was sent by the Income-tax Officer to the Inspecting Assistant Commissioner, for his approval. THE Inspecting Assistant Commissioner gave certain directions and returned the draft order to the Income-tax Officer. After the draft order was sent, there was a change of incumbent and by the successor-Income-tax Officer, who received the directions under Section 144B, assessment was framed. THE change of the Income-tax Officer was not communicated to the assessee and, therefore, the assessee failed to exercise its option as to whether it wanted to get the case reopened on any one or more issues. THE assessment was framed by the Income-tax Officer, on the basis of the directions given by the Inspecting Assistant Commissioner, and in appeal, the Commissioner of Income-tax (Appeals) set aside the assessment order as he was not satisfied with regard to the directions given by the Inspecting Assistant Commissioner. THE Income-tax Officer was directed to frame the assessment de novo. In second appeal before the Income-tax Tribunal, it was challenged that the Commissioner of Income-tax (Appeals) should have cancelled the assessment order instead of setting it aside, but, this contention was not accepted and the Tribunal observed that the directions given by the Inspecting Assistant Commissioner were binding under Section 144B(5) and, therefore, the question of any reopening of the proceedings does not arise. Since the directions given by the Inspecting Assistant Commissioner were considered not satisfactory by the Commissioner of Income-tax (Appeals), the assessment itself was set aside. THE assessment was not considered to be void ab initio. THE provisions of Section 129 of the Act were also taken into consideration and an observation was made that the Income-tax Officer will proceed from the stage from which he took over and give the assessee an opportunity of exercising his option within the meaning of the proviso to Section 129. Since the entire assessment was set aside, the Tribunal refused to interfere with the order passed by the Commissioner of Income-tax (Appeals). THE provisions of Section 292B and the fact that, in respect of three similar appeals for the years 1973-74, 1974-75 and 1975-76 directions were same and the ground as raised in this appeal was given up (sic).