The Assessing Officer is required to act on the directions of the senior authorities. During the course of assessment, the Assessing Officer generally presents views of his senior official to the assessee or his representative in respect of a point of disagreement that, though he is satisfied with the explanation given by the assessee or his representative, the Additional Commissioner or the Administrative Commissioner to whom he has to report, is in dis-agreement with the view. He may say that the senior authorities are hardpressing for making addition on some point or the other on any of the grounds for the various reasons.
In such a situation, generally the assessee or their representatives try to narrate the case orally before the senior authority with or without the consent of the Assessing Officer. In fact, such type of oral representation has no legal standing. In some cases, it may have helped the assessee to avoid the proposed addition. But as opposed to the few times the assessee may have got justice by this exercise of meeting senior authorities and explaining before them the case, in majority of the times the senior authorities may put the ball in the court of the Assessing Officer by giving some oral reply which is not legally binding on them. At the same time, they direct their junior regarding their own interpretation and ask him to pass an assessment order as per their oral directions, which in their opinion is the correct interpretation of facts. On such inter-pretation, the Assessing Officer is bound (though not legally) to pass the assessment order as per the interpretation of the senior authority. But, in such situations, we tax professionals should not choose this path of meeting and explaining orally to the concerned senior authority the facts of the case, but we should choose the legal available path to come out of the situation at the assessment stage only. This gives us a legal tool for avoiding the situation of appeals and thereby avoiding expending of time, money and man-hours.
The following steps can be taken:
In case an Assessing Officer during the course of assessment is in disagreement with the views taken by the assessee and puts it that the view is not taken by him but is a directive given by his senior (Additional Commissioner/Administrative Commissioner), if an assessee or his representative finds that a particular interpretation of facts in a case is not being correctly done by the Assessing Officer, then the assessee can present his case by giving the facts in detail in writing to such senior authority (generally, an Additional Commissioner or Administrative Commissioner) of the Assessing Officer and ask him his view of the matter in writing u/s.l44-A. S. 144-A of the Income-tax Act, 1961 is a very important legal tool in our hand in the situation narrated above. In present situation, when there are a number of cases being selected for scrutiny, occurrence of such a situation may be so frequent.
S. 144-A of the Income-tax Act, 1961 reads as follows:
“A Joint Commissioner may, on his own motion or on a reference being made to him by the (Assessing) Officer or on the application of an assessee, call for and examine the record of any proceeding in which an assessment is pending and, if he considers that, having regard to the nature of the case or the amount involved or for any other reason, it is necessary or expedient so to do, he may issue such directions as he thinks fit for the guidance of the (Assessing) Officer to enable him to complete the assessment and such directions shall be binding on the (Assessing) Officer.
Provided that no directions, which are prejudicial to the assessee shall be issued before an opportunity is given to the assessee to be heard.
Explanation: For the purposes of this Section, no direction as to the lines on which an investigation connected with the assessment should be made, shall be deemed to be direction prejudicial to the assessee.”
Interpretation of the above Section clearly shows that an Additional Commissioner is bound to answer the application made under this Section. If the senior authority agrees with the view taken by the assessee, then on getting the answer in writing the lower authority is bound to accept that view in respect of the assessment and frame his assessment by considering the same. At the same time, we may file a letter in writing to the assessing authority that he may wait till the reply of application made by the assessee to the senior authority u/s.144-A is received.
The above-referred situation to the best of my knowledge, in present times, is only a theoretical situation. In day-to-day practice, neither the practitioners nor the assessees use this Section, and in effect do not use an important weapon in the hands of the assessee. This Section is a very important tool, which the assessee and practitioners may use for their benefit and thereby reduce the wastage of time and energy to some extent.
In fact, neither. the senior officers in the Income-tax Department in capacity of Administrative Commissioners or Additional Commissioners want to give their opinion in writing. What is going on practically is the hybrid mix of the Section, whereby the assessee and practitioners are put into trouble and the Departmental senior officials are not bound by anything directed by them to their juniors, as they are neither giving anything in writing to the junior officer, nor to the assessee, who is finally becoming the victim of such wrong directions. At the same time, the senior officer in the Department is not bound by any of his directions. The present practice of monitored (!) (?) assessments is therefore wrong, impractical and hence required to be immediately changed with the use of available tool of S. 144 by the assessee as well as by the tax professionals.
I sincerely feel that the present system of monitored assessments is wrong for reasons given above. The submissions made by the assessee are, in his absence, being interpreted by the Assessing Officer to his senior authorities or the senior as per his own understanding. He may interpret the submissions made by the assessee, without going into the details of the case from the assessee or his counsel. The interpretation of the senior authorities may be different if the assessee himself or his counsel explains the fact to the authority. On explanation by the assessing officer in the absence of the assessee, the senior forms his views and gives his opinion to the Assessing Officer, who in turn raises the views of the senior before the assessee, and the assessee is required to answer the questions so raised. In this system, there is every possibility of misinterpretation of facts by the senior authority, non-consideration of an important fact by the authority while forming his opinion and dictating it to his junior Assessing Officer. Also, there is every possibility of improper representation of a case by the Assessing Officer to his senior for various reasons given above, thereby resulting in injustice.
I therefore sincerely feel that the present system of monitored assessments should be changed with the use of available tool of S. 144 by the assessee as well as by the tax professionals. But in cases having higher tax stake, points raised by the higher authorities should be heard by both the Assessing -4. Officer and the monitoring authority simultaneously. Opinion formed by both of them after such hearing will have some sense. Otherwise, the present system of monitored assessments, without using the tool of S. 144-A, will result in assessments without doing proper justice to the asses sees.
