Appealability of remand directions under income-tax law: a section 31(2) inquiry order was not appealable to the Tribunal.

Section 33(1) permits an appeal to the Income-tax Appellate Tribunal only against appealable orders passed by the Appellate Assistant Commissioner under section 31. A direction under section 31(2) requiring the Income-tax Officer to make further inquiry is only an interim step in disposing of the appeal and is not a final or substantive appellate order. The Gujarat High Court distinguished such directions from orders under section 31(3), including orders setting aside an assessment and directing a fresh assessment. On that basis, the order directing further inquiry under section 31(2) was held not to be appealable, and the Tribunal was wrong to treat the appeal as maintainable.

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Issues: Whether an order of the Appellate Assistant Commissioner directing the Income-tax Officer to make further inquiry and report under section 31(2) was appealable to the Appellate Tribunal under section 33(1).

Analysis: Section 33(1) permits an appeal only against an order passed by the Appellate Assistant Commissioner under section 31, and the scheme of section 31 shows that the appealable orders are the substantive orders contemplated by section 31(3). A direction under section 31(2) to make further inquiry is only an interim step for the purpose of disposing of the appeal and does not amount to a final or substantive order disposing of the appeal. The earlier authority relied upon supported the distinction between substantive appellate orders and directions for further inquiry, and the later decision cited before the Tribunal was concerned with a different situation, namely an order under section 31(3)(b) setting aside the assessment and directing a fresh assessment.

Conclusion: The order directing further inquiry under section 31(2) was not appealable under section 33(1), and the Tribunal was wrong in holding the appeal maintainable.

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