Law:

Section:

Section 251 of the Income-tax Act, 1961 - Commissioner (Appeals) - Powers of - Whether power of appellate authority is normally co-extensive with that of original authority; it would not be open to appellate authority to exercise a jurisdiction, which Assessing Officer did not have - Held, yes - Whether it is open to another quasi-judicial authority of limited jurisdiction, in matter of lis between assessee and revenue before it to proceed to determine rights or liabilities of a third party, who is not before it - Held, no - Assessee-samiti claimed to be a charitable institution - In its assessment, Assessing Officer held that amount transferred by assessee to Mandi Parishad as development cess and administrative expenditure were for non-charitable purpose and, therefore, were to be added in assessee's income - On appeal, Commissioner (Appeals) held that both amounts could not be assessed in hands of assessee, but in hands of Parishad - He, however, observed that amount transferred to Mandi Parishad was not credited by Mandi Parishad to its income and expenditure account, but directly credited to 'Cess Fund' (Central Mandi Fund) - Accordingly, Commissioner (Appeals) directed Assessing Officer to make a reference to Assessing Officer of Mandi Parishad to take remedial measures, if necessary, in relevant assessment years to tax relevant receipts in hands of Mandi Parishad - Whether observations made by Commissioner (Appeals) in respect of Mandi Parishad were without jurisdiction - Held, yes FACTS The assessee samiti had claimed status as a charitable institution on being registered under section 12AA. During assessment proceedings, the Assessing Officer held that certain amounts transferred by the assessee to the Mandi Parishad as administrative expresses and development cess were for a non-charitable purpose, as the assessee had no authority to check utilization of that amount in the hands of the Mandi Parishad. As such he added the said amount to the total income of the assessee. On appeal, the Commissioner (Appeals) held that both the amounts could not be assessed in the hands of the assessee, but in the hands of the Parishad and must be accounted for by the…

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