2004 (10) TMI 82

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....n'ble Tribunal was right in law to modify the direction of the learned Commissioner of Income-tax (Appeals) by holding that the addition in any case under this head should not exceed Rs. 49,091? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in restricting the power of the Commissioner of Income-tax (Appeals) for additions/enhancement or issuing such directions to the Assessing Officer?" The brief facts of the case necessary for answering the reference may be noticed. The assessee is an individual and proprietor of M/s. Garg Eye and Maternity Hospital, Kaithal. The assessee's premises were searched under section 132 of the Act on October 9,1987, during which a diary and other records were sei....

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....or the Revenue, and with his assistance perused the paper book. Shri Rajesh Bindal submitted that the Commissioner of Income-tax (Appeals) under section 251 of the Act while exercising the appellate powers can confirm, reduce, enhance, annul or set aside an assessment and refer back the same to the Assessing Officer. The said powers are very vast and the restriction imposed by the Tribunal that the Assessing Officer shall not exceed the additions originally made, i.e., beyond Rs. 48,891 (wrongly mentioned as Rs. 49,091) is not based on legal principles. Learned counsel placed reliance on S.R. Kalani v. CIT [1979] 120 ITR 163 (MP); CIT v. Devichand Pan Mal [1986] 160 ITR 545 (Raj) and Amin Chand and Sons v. CIT [1982] 133 ITR 439 (P&H). Se....

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....appealed against was passed, notwithstanding that such matter was not raised before the Deputy Commissioner (Appeals) or, as the case may be, the Commissioner (Appeals) by the appellant." A careful reading of the aforesaid provision would show that the Commissioner of Income-tax (Appeals) while adjudicating an appeal under section 251 has wide powers and he can set aside an assessment and can remand the same for fresh decision by the Assessing Officer. While interpreting section 251, the Madhya Pradesh High Court in S.R. Kalani's case [1979] 120 ITR 163 held as under: "Sub-clause (a) of this section provides that in an appeal against an order of assessment the Appellate Assistant Commissioner may either confirm, reduce, enhance or annul t....

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....s even to the prejudice of the assessee and may remand the case to the Income-tax Officer for inquiring into items which were not the subject-matter of appeal. ..." This High Court in Amin Chand and Sons's case [1982] 133 ITR 439, made similar observations, which are reproduced as under: "It is obvious from the plain language of the aforesaid section that the Appellate Assistant Commissioner is not debarred from setting aside an order passed under section 185(1)(b) and directing the Income-tax Officer to redecide the matter after taking into consideration some other relevant matters. The powers of the Appellate Assistant Commissioner are wider than those of an appellate court under the Code of Civil Procedure. His competence is not restri....