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6. We have heard the rival contentions, perused the material on record and duly considered factual matrix of the case as also the applicable legal position.

7. In the light of Hon'ble Bombay High Court's judgment, it is now free from doubt that not only an action of the Assessing Officer, but also an inaction of the Assessing Officer, can be appealed against. In case an Assessing Officer fails to exercise the powers conferred upon him by the statue, when facts of the case warrant or justify the exercise of such powers, this inaction of the Assessing Officer can also be called into question before an appellate authority. Every Assessment year 1996-97 power granted to a public functionary comes with a corresponding duty to exercise such a power when circumstance so warrant or justify. A public official cannot decline to exercise the power on the ground that the assessee did not request for the same at the relevant point of time. On the same lines were the views of a coordinate bench of this Tribunal, in the case of Sabnis Ashok Anant Vs ACIT ( 117 TTJ 96 ), wherein the Tribunal, speaking through one of us (i.e. the Accountant Member) had observed thus: "..................not only a mistake in the acts of an authority; even a wrongful inertia of a public authority is also a mistake apparent on record. All the powers of someone holding a public office are powers held in trust f or the good of public at large. There is, theref ore, no question of discretion to use or not to use these powers. It is f or the reason that when a public authority has the power to do something, he has a corresponding duty to exercise these powers when circumstances so warrant or justify - a legal position which has the approval of Hon'ble Supreme Court." What follows is that merely because an assessee had offered something to tax, Assessing Officer could not have declined to exercise his powers to give relief to the assessee by not taxing the same. It is in this perspective that the CIT(A) ought to have decided the appeal on merits, and the CIT(A) could not have rejected the same in l imine . It was not open to him to decline to decide the appeal on the ground that the assessee can not appeal against the order of the Assessing Officer as there was no adjudication by the Assessing Officer on the issue of taxability of capital gains. That is precisely what Hon'ble High Court has held, and the CIT(A) has accordingly been directed to decide the matter afresh "in accordance with the law". Nothing more than this needs to be read into the judgment of Hon'ble Bombay High Court directing the CIT(A) to decide the matter afresh. Having said that, we must also point out that the CIT(A) ought not have forgotten that he was examining the stand of the Assessing Officer in the course of processing of a return under section 143(1)(a). What was required to be examined was whether or not the Assessing Officer should have excluded the capital gains on sale of property from taxable income in the course of processing of income tax return under section 143(1)(a). The relevance of section 143(1)(a), under which Assessing Officer was acting, could not have been overlooked. The importance of scope of powers Assessment year 1996-97 under section 143(1)(a) lies in severe limitation of powers of the Assessing Officer under this section. Any relief that he can grant, or the disallowance he can make, under this section must be solely on the basis of material on record. To that extent, i.e. "determination of liability as ascertainable from the return filed', this section has been held to be somewhat analogous to Section 154. In the case of Khatau Jhankar Limited Vs K S Pathania (196 ITR 55), Hon'ble Bombay High Court explained the scope of these powers as follows: