Law: Income Tax Act, 1961

Section: 148

(a) Income-tax----General Principles---Order passed under statutory provision enforceable until it is set aside by competent authority. So long as an order is passed under a statutory provision, it continues to be enforceable, unless it is set aside by the appropriate forum constituted under the same Act. [p. 1478) A (b) Income-tax--- ----Assessment---Revision---Completion of assessment---Second return filed voluntarily and order of assessment made again---Second order or assessment not void ab initio---Second order of assessment prejudicial to revenue and could be revised. The assessee filed a return in November,1974, showing an income of Rs.6,860. An assessment was made on him on December 23, 1975. On December 31, 1975, the assessee filed a revised return showing an enhanced income. No notice under section 148 of the Indian Income Tax Act, 1961, was issued by the Income Tax Officer. On March 11, 1976,, however, another assessment order on an income of Rs.17,097, was made on the assessee. Subsequently, the Commissioner of Income-tax revised the second assessment order. The Tribunal held that the alleged assessment order dated March 11, 1976, was non est and that the Commissioner could not treat as non est order as prejudicial' to the Revenue and pass an order under section 263 of the Indian Income Tax Act, 1961. For the said reason alone, the Tribunal held that the Commissioner's order had to be set aside. On a reference: Held, (i) that the Tribunal was not justified in holding that the second assessment order of the Income-tax Officer was non est in any absolute sense, since it would bind the parties unless set aside. Till it was set aside by the Commissioner under section 263, Indian Income-tax Act, 1961 it bound the parties; (ii) that the second assessment order was certainly prejudicial to the Revenue administration, though no prejudicial to the coffers of the State. The Tribunal was not right in law in cancelling the order of the Commissioner of Income-tax. [pp. 1481, 1483] B & C Anisminic Ltd. v. Foreign Compensation Commission (1969) 2 AC 147 (HL); Antulay (A.R.) v. R.S. Nayak AIR 1988 SC 1531; (1988) 2 SCC 602; Balchand v. ITO (1969) 72 ITR 197-…

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