February 2010
ITAT: Powers: A Y 1993-94 and 1994-95: Power to set aside and issue directions: No power to place restrictions on power of AO to determine income: Direction not to assess income at a figure less than that declared in the return or more than the figure as
By K. B. Bhujle | Advocate
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Reported:
44 ITAT: Powers: A Y 1993-94 and 1994-95: Power to set aside
and issue directions: No power to place restrictions on power of AO to determine
income: Direction not to assess income at a figure less than that declared in
the return or more than the figure as assessed u/s. 144: Direction beyond powers
of Tribunal:
CIT Vs. H. P. State Forest Corporation Ltd.; 320 ITR 54 (HP):
The assessee is a state government corporation. The accounts
of the assessee were not audited by the office of the Controller and Auditor
General. Therefore, the Assessing Officer treated the assessee’s returns for the
A Ys. 1993-94 and 1994-95 as non est and passed an assessment order u/s. 144 of
the Income-tax Act, 1961. The Tribunal set aside the assessment and directed the
assessment afresh with the audited accounts submitted by the assessee, with a
further direction that the income to be assessed was not to be at a figure less
than that declared by the assessee in its return. On a rectification application
by the assessee, the Tribunal allowed the application, but directed that the
income should not be assessed at a figure more than that assessed by the
Assessing Officer u/s. 144.
On appeal by the Revenue, the Himachal Pradesh High Court
held as under:
“i) Once the returns are treated as non est, such returns
could not be used even against the assessee.
ii) When the Tribunal was directing assessment de novo, no
fetters as to the upper or lower limit of income to be assessed could have
been placed by the Tribunal on the Assessing Officer. He had to go through the
audited accounts, apply his mind and frame the assessments afresh in
accordance with the duly audited accounts placed on record. The Tribunal’s
directions to firstly, assess the income at a figure not less than that
declared in the assessee’s returns; and, secondly, upon the rectification
application, to assess the income at a figure not higher than that assessed
u/s. 144, were unsustainable.”
