Law:

Section:

Section 251(1), read with section 144B of the Income-tax Act, 1961 - Appellate Assistant Commissioner/Commissioner (Appeals) - Powers of - Assessment year 1977-88 - Whether Commissioner (Appeals) is competent to set aside assessment made without complying with provisions of section 144B and direct fresh assessment instead of annulling such assessment - Held, yes FACTS For the assessment year 1977-78, the ITO assessed the income of the assessee at an amount that exceeded the income returned by more than Rs. 1 lakh. The ITO did not follow the procedure laid down in section 144B. On appeal, the Commissioner (Appeals) set aside the assessment and remanded the case to the ITO for de novo assessment after following the procedure laid down in section 144B. The Tribunal upheld the order of the Commissioner (Appeals), though the assessee had contended that since the procedure under section 144B was not followed, assessment made by the ITO was null and void and the appellate authority should have annulled that order, instead of setting aside the same and ordering a fresh assessment. On reference: HELD The appellate authority has the power to confirm, reduce, enhance or annul the assessment or may set aside the assessment and refer the case back to the ITO for making a fresh assessment in accordance with the directions given by the appellate authority. On the facts of each case, the appellate authority had to consider whether it was a fit case for annulling the assessment or for setting aside the assessment. It cannot be disputed that if the assessment order is set aside, remand is permissible. Therefore, the Commissioner (Appeals) had the power to set aside the assessment and order a fresh assessment. CASE REVIEW Des Raj Kul Bhushan v. CIT [1989] (1989) 180 ITR 297 (Punj. & Har.)followed and relied upon. CASE REFERRED TO Des Raj Kul Bhushan v. CIT [1989] (1989) 180 ITR 297 (Punj. & Har.). B.S. Gupta and Sanjay Bansal for the Applicant. L.K. Sood for the Respondent. JUDGMENT Mital, J. - The assessee filed a return showing an income of Rs. 80,300 for the assessment year 1977-78. The ITO by his order dated 7-3-1980, assessed the income at Rs. 2,15,440. In doing so,…

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