Appellate power to set aside assessment upheld where a revised return was ignored and fresh assessment was directed.

The appellate authority was empowered under section 251 of the Income-tax Act, 1961 to set aside an assessment where the recorded facts and the basis of framing the assessment were inconsistent, including failure to consider a revised return filed before completion of assessment. On that footing, the direction for fresh assessment was upheld and the departmental appeal failed.

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Issues: Whether the appellate authority was justified in setting aside the assessment made under section 143(3) of the Income-tax Act, 1961 and directing a fresh assessment.

Analysis: The revised return filed by the assessee before completion of the assessment was not disputed. The appellate authority found discrepancies between the recorded facts and the basis on which the assessment had been framed, including omission to consider the revised return. The appellate authority was empowered under section 251 of the Income-tax Act, 1961 to set aside the assessment where appropriate.

Conclusion: The setting aside of the assessment was upheld and the departmental appeal failed.

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