Law: Income Tax Act, 1922

Section: 144B

(a) Income-tax-----Assessment---Draft assessment order--.-Reference to I.A.C.---Assessment set aside by Tribunal on ground that I.A.C. .issued directions to I.T.O. without giving opportunity of hearing to assessee---I.A.C. thereafter, hearing assessee and issuing directions to I.T.O.---Fresh assessment made by successor I.T.O.---No fresh draft assessment orders need to be forwarded during course of fresh assessment---Only procedural illegality committed by I. A. C. ---Proceedings can be continued from stage where proceedings were vitiated by illegality of not granting sufficient opportunity to assessee---Fresh assessment not void---Indian Income Tax Act, 1961, S. 144B. For the assessment year 1978-79, the assessee returned an income of Rs.1,02,790 and an agricultural income of Rs.1,000 but the Income-tax Officer assessed him on an amount of Rs.11,63,660. Since the difference between the returned income and the income assessed was more than Rs.1 lakh, as per section 1448 of the Income Tax Act, 1961, the Income-tax Officer forwarded the draft order, dated March 13, 1981, to the assessee on March 17, 1981. The assessee filed his objections on March 31, 1981. The draft order along with the objections was then forwarded to the Inspecting Assistant Commissioner of Income-tax as contemplated by section 144E of the Act. Even though notice was issued to the assessee by the Inspecting Assistant Commissioner about the posting of the proceedings. for enquiry on September 19, 1981,- the notice was received by the assessee only on September 23, 1981. The Inspecting Assistant Commissioner without hearing the, assessee issued directions to the Income-tax Officer as contemplated under section 1448 on September 25, 1981. The Income-tax Officer thereupon completed the assessment on the basis of such direction and assessment order, dated September 26, 1981, was issued. The assessee filed an appeal before the Commissioner of Income-tax (Appeals) contending that the assessment was barred by limitation and that no opportunity was granted by the Inspecting Assistant Commissioner before directions were issued under section 1448. The assessee prayed that the assessment should be…

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