High Court rules reference by Income-tax Appellate Tribunal incompetent due to lack of assessee grievance

The High Court of Madras declined to answer the questions referred by the Income-tax Appellate Tribunal, stating that the reference itself was incompetent due to the lack of grievance on the part of the assessee after the rectification was made. The court highlighted the partner's statement of no objection as a crucial factor in deeming the subsequent appeals and the reference as incompetent.

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Issues involved: Competency of the reference made by the Income-tax Appellate Tribunal under section 256(1) of the Income-tax Act, 1961.

Competency of invoking proceedings under section 154:
The original assessment for the assessment year 1962-63 revealed a mistake in calculating interest under section 139(1)(iii). The Income-tax Officer issued a notice to rectify the mistake under section 154, to which a partner of the assessee expressed no objection. Despite this, the assessee appealed to the Appellate Assistant Commissioner and then to the Income-tax Appellate Tribunal, both of which were deemed incompetent as the assessee had no grievance after the partner's statement of no objection. The court held that once the assessee had no objection and the Income-tax Officer revised the assessment accordingly, the appeals were incompetent, rendering the reference to the court also incompetent.

Validity of interest levy under proviso (iii)(b) to section 139(1):
The court did not address this question as it deemed the reference itself as incompetent due to the lack of grievance on the part of the assessee after the rectification was made. The court emphasized that the partner's statement of no objection was undisputed and was acknowledged by all authorities involved in the case, making the subsequent appeals and the reference invalid.

Conclusion:
The High Court of Madras declined to answer the questions referred by the Income-tax Appellate Tribunal, stating that the reference itself was incompetent due to the lack of grievance on the part of the assessee after the rectification was made. The court highlighted the partner's statement of no objection as a crucial factor in deeming the subsequent appeals and the reference as incompetent.

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