2014 (9) TMI 574

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....n the basis of the profit and loss account. For the subsequent two years, he invoked the facility under Section 44AC of the Income Tax Act, 1961 (for short the Act) and has shown the income of Rs. 2,24,500/- and Rs. 1,56,087/- respectively. The expenditure of Rs. 1,53,428/- and Rs. 1,11,079/- respectively were shown for those two years. The Assessing Officer accepted all the facts and figures furnished by the appellant. However, he disallowed the claim for deduction of loss on the Saw Mill business. Instead, he treated the income from the Saw Mill business as nil. Aggrieved by that and on other ancillary aspects, the appellant approached the Commissioner (Appeals) (for short the Commissioner). Through a common order dated 13.03.1997, the C....

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....ner not only rejected the contention of the appellant, but also took the view that the income from the timber business and Saw Mill activity ought to have been on a totally different basis than the one that found acceptance with the Assessing Officer. The reference to Section 251 of the Act becomes necessary for this purpose. The provision reads as under: 251. Powers of the Commissioner (Appeals).- (1) In disposing of an appeal, the Commissioner (Appeals) shall have the following powers (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; (aa) in an appeal against the order of assessment in respect of which the proceeding before the Settlement Commission abates under section 245HA, h....

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....e tax liability to the detriment of the assessee, that too in an appeal preferred by the assessee, a notice provided for under sub- section (2) of Section 251 of the Act must be issued requiring the appellant to show cause as to why such a course of action be not taken. The reason is not difficult to see. The assessee approaches the Commissioner ventilating his grievance and expecting some relief. If apart from denying the relief, the Commissioner wants to fasten additional liability, the assessee must be put on notice. For all practical purposes, the appeal in such cases tends to assume the character of suo motu revision of the order of the Assessing Officer. In the instant case, the Commissioner made certain observations, as to why the g....