December 2010
S. 143(3) read with S. 252 — De novo Assessment pursuant to order of the Tribunal — Whether AO justified in enhancing assessed income while doing de novo assessment — Held, No.
By Jagdish D. Shah
Jagdish T. Punjabi
Chartered Accountants
Reading Time 2 mins
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Part B : UNREPORTED DECISIONS
ITO v. Jabbal Woodcrafts India
ITAT ‘D’ Bench, New Delhi
Before C. L. Sethi (JM) and
K. G. Bansal (AM)
ITA No. 803/D/2009
A.Y. : 1997-98. Decided on : 24-9-2010
Counsel for revenue/assessee : A. K. Monga/
Salil Kapoor and Sonal Kapoor
9. S. 143(3) read with S. 252 — De novo Assessment pursuant
to order of the Tribunal — Whether AO justified in enhancing assessed income
while doing de novo assessment — Held, No.
Per K. G. Bansal :
Facts :
The assessee had filed return of income declaring total
income of Rs.1,980. The income was assessed u/s.143(3) at Rs.10.19 lac. This
order was set aside by the Tribunal to the file of the AO for making fresh
assessment after taking into account evidences including the evidence in the
form of books of accounts. In pursuance thereof, the assessment was framed
determining the total income at Rs.40.64 lac. The major addition was on account
of share application money of Rs.38.84 lac. The CIT(A) on appeal deleted the
addition made on this count.
Before the Tribunal, the Revenue contended that when the
Tribunal restored the matter to the file of the AO with a view to take into
account all the evidences, the AO was well within his right to consider all
matters, including the issue regarding share application money, which was not
the subject-matter of appeal before the Tribunal.
Held :
The Tribunal noted that although it has all the powers to
decide an issue before it, in any manner, the accepted position of law is that
it has no power to enhance the assessment. In such a situation, the order of the
Tribunal restoring the matter to the file of the AO cannot be construed in a
manner as to grant power to the AO to include a totally new issue, which has the
effect of enhancing the income. Thus, what cannot be done directly, cannot be
done indirectly also. Accordingly, it dismissed the appeal filed by the Revenue.
