TaxTMI 
TaxTMI 
1998 (8) TMI 10
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....ng out that certain aspects have not been properly considered, and requesting him to send another draft order on or before 31st Jan., 1983. The ITO sent a second draft assessment order on 1st Feb., 1983, proposing to assess a sum of Rs. 50,68,515. On 26th Feb., 1983, the IAC gave his directions and assessment was completed on a total income of Rs. 50,41,738. The assessee, being aggrieved, appealed to the CIT(A) who upheld the assessee's objections that s. 144B did not authorise the ITO to make a second draft assessment order. The CIT relied upon the decision of the Delhi High Court in Sudhir Sareen vs. ITO (1981) 128 ITR 445 (Del) : TC 11R 378. That order of the CIT was taken up in further appeal by the Revenue. The Tribunal has rejected the Revenue's appeal and confirmed the order of the CIT. 3. The questions now brought before us by the Revenue arising out of that order of the Tribunal, are as to whether, on the facts and in the circumstances of the case, the IAC can invoke the provisions of s. 144A in a proceeding pending before him under s. 144B, and direct the ITO to make a second draft assessment order before finalising the assessment, and if the answer to that question is i....
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....ring the draft order and the objections and after going through (wherever necessary) the records relating to the draft order, issue, in respect of the matters covered by the objections, such directions as he thinks fit for the guidance of the AO to enable him to complete the assessment : Provided that no directions which are prejudicial to the assessee shall be issued under this sub-section before an opportunity is given to the assessee to be heard. (5) Every direction issued by the Dy. CIT under sub-s. (4) shall be binding on the AO. (6) For the purposes of sub-s. (1), the Board may, having regard to the proper and efficient management of the work of assessment, by order, fix from time to time, such amount as it deems fit: Provided that different amounts may be fixed for different areas : Provided further that the amount fixed under this sub-section shall, in no case, be less than twenty-five thousand rupees. (7) Nothing in this section shall apply to a case where a Dy. CIT exercises the powers or performs the functions of an AO in pursuance of an order made under s. 125 or s. 125A." 5. Sec. 144A confers wide discretionary powers on the Dy. CIT. The powers so conferred may....
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.... an opportunity of being heard. Directions so issued are binding on the AO. 7. There are several differences as between s. 144A and s. 144B. Sec. 144A vests general and unlimited power to the Dy. CIT in giving directions to the AO for the purpose of enabling him to complete the assessment. The power, which may be exercised suo motu or at the instance of the assessee or the AO, is not a power, which is required to be exercised in the case of every assessment. It is only when one of the three parties choose to invoke the provision that the occasion for the exercise of the power under s. 144A will arise. In contrast s. 144B deals with a specific situation where the Dy. CIT is called upon to give directions to the AO, and makes it mandatory for the AO to make a draft assessment order, and thereafter, follow the further steps outlined in the provision. The common feature in the two provisions is that under both the provisions the Dy. CIT is to give directions to the AO for the purpose of completing the assessment, and the directions so given are to be binding on the AO. Sec. 144B besides being mandatory is required to be complied with notwithstanding anything contained in the other pro....
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....he is empowered to give are directions for the purpose of completing the assessment pursuant to the draft order made by the AO. The object of the provision in compelling the assessee to file objections if any, within the time specified and requiring the Dy. CIT to give directions, for completion of the assessment would not be served if it were to be held that the Dy. CIT has the freedom to call for repeated drafts of the assessment order, and the assessee is required to file objections again and again, to different drafts that the AO may be compelled to give pursuant to the directions issued by the Dy. CIT. The power conferred on the Dy. CIT is required to be exercised within the four corners of the section. While exercising the power under s. 144B, it would not be permissible for the Dy. CIT to import s. 144A for the purpose of directing the AO to submit a second draft assessment order. While it is conceivable that before the initiation of the proceedings under s. 144B, a prior proceeding under s. 144A may possibly take place; once the proceedings under s. 144B begin, they must end only in the manner contemplated in that section, although the assessment which results therefrom is ....