1991 (1) TMI 21 - HC - Income Tax

Court allows Revenue to issue directions during assessment proceedings; assessee's rights protected.

Commissioner Of Income-Tax Versus M. SP Exports (Private) Limited

Commissioner Of Income-Tax Versus M. SP Exports (Private) Limited - [1992] 196 ITR 762, 104 CTR 40, 67 TAXMANN 120 Issues:Interpretation of Income-tax Act provisions regarding the authority to issue directions during assessment proceedings.Detailed Analysis:The judgment addressed the question of whether the Inspecting Assistant Commissioner can issue directions under section 144A to the Income-tax Officer during assessment proceedings. The case involved a situation where objections were being considered under section 144B(4), and directions were issued under section 144A. The assessee argued that section 144A could not be invoked as no proceeding was pending before the assessing authority. The Appellate Tribunal accepted the assessee's contentions, leading to the reference by the Revenue.The Tribunal relied on a previous decision stating that section 144B overrides other provisions of the Act. Additionally, a Delhi High Court decision was cited, emphasizing that a second draft assessment order cannot be made. The purpose of sections 144A and 144B was noted to avoid multiple proceedings and unnecessary appeals.In another case, it was held that non-compliance with section 144B procedural requirements would not invalidate the assessment. The judgment also referred to a Calcutta High Court decision, emphasizing that the assessment would be invalid if the Inspecting Assistant Commissioner exceeded the draft assessment order's scope.The Kerala High Court case highlighted the power of the Inspecting Assistant Commissioner under section 144A to issue directions even suo motu, emphasizing the procedural nature of sections 144A and 144B. The judgment concluded that invoking section 144A during section 144B proceedings does not prejudice the assessee.The judgment clarified that the assessment is considered pending until completion, even during section 144B proceedings. It was emphasized that the provisions of section 144A can be invoked during section 144B proceedings, ensuring the assessee is heard in the process.Ultimately, the court answered the question in the negative, favoring the Revenue's position that section 144A can be invoked during section 144B proceedings, provided the assessee is given an opportunity to be heard.This detailed analysis of the judgment provides a comprehensive understanding of the interpretation of the Income-tax Act provisions regarding the authority to issue directions during assessment proceedings.