Allahabad High Court
Commissioner Of Income-Tax vs Dhampur Sugar Mills Ltd. on 15 July, 1987
Equivalent citations: (1987)65CTR(ALL)78, [1988]170ITR449(ALL), [1987]34TAXMAN153(ALL)
JUDGMENT R.K. Gulati, J.
1. This application under Section 256(2) of the Income-tax Act, 1961 (hereinafter to he referred as "the Act"), has been filed at the instance of the Commissioner of Income-tax, Lucknow,
2. The facts leading to the filing of the present application are that for the assessment year 1976-77, M/s. Dhampur Sugar Mills Ltd., the assessee, was originally assessed to income-tax by an order dated February 6, 1980. The Commissioner of Income-tax, being of the opinion, that the said assessment order was erroneous and prejudicial to the interest of the Revenue and purporting to exercise his power under Section 263 of the Act, set aside the assessment order with a direction to the assessing officer to make the assessment de novo. Being aggrieved, the assessee appealed to the Income-tax Appellate Tribunal. The Appellate Tribunal, by its order dated May 2, 1983, set aside the order of the Commissioner of Income-tax and in its place restored the assessment order passed by the assessing officer.
3. Notwithstanding that the original order of assessment had been restored by the Income-tax Appellate Tribunal and that the order of the Commissioner under Section 263 authorising to make a fresh assessment had been quashed, the assessing officer, long thereafter, vide his order dated March 23/1984, passed a fresh assessment order for the year in dispute in pursuance of the directions given by the Commissioner of Income-tax in his order under Section 263 of the Act. This order was challenged in appeal by the assessee before the Commissioner of Income-tax (Appeals), Bareilly, who allowed the appeal and vacated the fresh assessment order. He held that the impugned order cannot be allowed to stand because the order under Section 263 having been quashed, the very basis authorising the assessing officer to make a fresh order itself disappeared. The Revenue took the matter in second appeal to the Income-tax Appellate Tribunal which dismissed the appeal and confirmed the order passed by the Commissioner of Income-tax (Appeals). Against the order of the Income-tax Appellate Tribunal, the Department sought a reference under Section 256(1) of the Act which was also not granted.
4. It is in this background that the present application has been filed by the Revenue for a direction that the Income-tax Appellate Tribunal be directed to refer the following question of law for the opinion of this court.
"Whether, on the facts and in the circumstances of the case, the Tribunal was legally correct in law as well as on facts in upholding the order of the Commissioner of Income-tax (Appeals) quashing the assessment framed by the Inspecting Assistant Commissioner (Assessment) under Section 143(3)/263 on March 23, 1984, when the Department's reference under Section 256(1) setting aside the order under Section 263 is pending decision of the hon'ble High Court ?"
5. We have heard learned standing counsel appearing for the Revenue and rind that there is no substance in this application. In support of the application, learned standing counsel urged that the Income-tax Appellate Tribunal erred in law when it confirmed the setting aside of the assessment order passed in pursuance of the directions contained in the order passed under Section 263 of the Act inasmuch as the Revenue had not accepted the order of the Tribunal by which the order of the Commissioner of Income-tax was quashed. It was also urged that against the said order of the Tribunal, the Revenue had filed a reference under Section 256(1) of the Act. The Income-tax Appellate Tribunal while narrating the details of the previous proceedings in its order observed :
"The Revenue has not given us the necessary particulars but it appears from the ground of appeal that perhaps a reference under Section 256(1) against the order of the Tribunal dated May 2, 1983, was allowed."
6. Admittedly, no prayer was made before the Tribunal to block the hearing of the appeal giving rise to this reference application pending hearing of the reference under Section 256(1) of the Act arising out of the earlier order of the Tribunal of which mention has been made earlier. In these circumstances, the Tribunal proceeded to decide the appeal on merits.
7. The Tribunal took note of the fact that there was no controversy on the point that on the date when the fresh assessment order was passed, the order under Section 263 passed by the Commissioner of Income-tax did not exist inasmuch as it had already been quashed. In this view of the matter, it held that the fresh assessment order was passed without any authority of law and should not be sustained simply on the ground that a reference had been allowed against the Appellate Tribunal's order arising out of previous proceedings. It held that the parties were at liberty to protect their interests under the provisions of law as available to them. With these observations, the order of the Appellate Assistant Commissioner was affirmed.
8. Perhaps, it cannot be disputed that under the provisions of the Act, only one assessment order is contemplated for a given year against an assessee. The Act does not provide for multiplicity of assessment orders (for a given year) against the same assessee. An assessment once made can be modified or interfered with only in accordance with law and in the manner provided under the Act. The order of the Commissioner having been set aside in appeal, the assessing officer was not competent to frame any fresh assessment order in pursuance of the directions contained in the said order unless the order passed by the Income-tax Appellate Tribunal by which the said order was set aside, is vacated or its operation is suspended by a competent court or authority.
9. When the matter was taken up for hearing today, we asked learned standing counsel for the Department to furnish to us the particulars of the reference which has been filed against the order of the Income-tax Appellate Tribunal which is said to be pending. No such particulars were supplied. Nor could standing counsel say with certainty that such a reference having been made to this court is still pending. In these circumstances, we do not find any error in the order of the Income-tax Appellate Tribunal when it dismissed the Revenue's appeal and affirmed the action of the Commissioner of Income-tax (Appeals) setting aside the fresh assessment order made in pursuance of Section 263.
For the reasons given above, we reject this application by saying that no statable question of law arises in the instant case. Since no one has appeared on behalf of the assessee to oppose this application, we make no order as to costs.