TaxTMI 
TaxTMI 
1982 (5) TMI 9
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....-- During the course of assessment proceedings, the ITO issued a notice under s. 143(2) of the I.T. Act, 1961 (hereafter " the Act "). The assessee committed default and, hence, the ITO made an ex parte assessment under s. 144 of the Act on November 27, 1972. The share income from M/s. Radhey Lal Devicharan was taken at Rs. 30,932. Apart from that, income from money-lending business was taken at Rs. 7,700. Under the head Other sources the following interest income was taken : Rs. 1. Interest from Sheo Kumar Gupta 1,500 2. Interest from M/s. Devicharan Commercial Corporation 5,400 3. Interest from M/s. Ram Kumar Ram Krishna Company 6,945 4. Interest from Ram Kumar Gupta and Company 6,734 5. Interest from M/s. Radhey Lal Dev....
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....e assessee could not question the validity of the ex parte assessment and all that it could examine was as to whether the ITO had exercised the discretion vested in him under s. 144 of the Act in a judicial manner or in an arbitrary or capricious manner and that the burden of satisfying the appellate court in this behalf was on the party challenging the exercise of the best judgment of the ITO. On this legal view, the Tribunal confirmed the estimates of income from money-lending, income from salary and interest income from Sheo Kumar Gupta and M/s. Devicharan Commercial Corporation. As regards interest income from M/s. Ram Kumar Ram Krishna & Company and M/s. Ram Kumar Gupta and Company, the Tribunal accepted the assessee's contention that ....
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.... earned from the various sources which have been subjected to tax in the hands of the applicant ? " It may be noted that pending the disposal of the reference application, the assessee moved an application under s. 254(2) of the Act before the Tribunal. It was stated in that application that the Tribunal had omitted to consider certain facts which had been brought to its notice at the time of hearing of the appeal and thus a mistake apparent from the record had crept in its order. The Tribunal rejected this application by its order dated October 29, 1977. In its opinion no mistake as alleged existed in its order and as such the application was not maintainable. It was submitted before us on behalf of the assessee by his learned counsel, S....
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.... file an application under s. 146(1) at all and may only prefer an appeal against the ex parte assessment order. This court in Chhotelal Gobardhan Das v. CIT [1953] 23 ITR 272 (All), took the view that the Appellate Tribunal had wide powers but they relate only to the quantum of tax payable. In Padampat Singhania v. CIT[1953]24 ITR 141 (All) again it had occasion to consider this question and it held that in an appeal before the AAC against an order under s. 27 of the Indian I.T. Act, 1922, equivalent to s. 146 of the 1961 Act, the AAC could only consider the quantum of tax imposed but he could not go into the question about the propriety of passing the best judgment assessment. In Gaurishanker Kedia v. CIT [1963] 49 ITR 655 (Bom) as well, ....
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.... purposes of disposing of the appeal, and the question in appeal before the Appellate Assistant Commissioner must be whether the judgment of the Income-tax Officer was properly exercised under section 23(4) and whether the quantum arrived at by the Income-tax Officer was properly and fairly arrived at. But can it be said that under no circumstances is the Appellate Assistant Commissioner permitted to direct the Income-tax Officer to look at the books of account, which books have not been and cannot be produced for the purpose of the ordinary assessment ? We fully appreciate the point of view put forward on behalf of the Department that the assessees should not be allowed to sit on the fence, take the chance of a best judgment assessment wit....
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....vations. Also see Arjan Dass v. CIT [1978] 112 ITR 480 (P & H) and S.R. Kalani v. CIT [1979] 120 ITR 163 (MP). It would be seen, therefore, that no limitation has been placed on the powers of the AAC or the Appellate Tribunal conferred under s. 251(1) or s. 254(1). The only limitation on their appellate jurisdiction which can be inferred from the decided cases is that they cannot go into the question of propriety of the ex parte proceedings and the best judgment assessment. The quantum of assessment, the quantum of tax or the question of registration of a firm can always be gone into. We may note that the learned standing counsel as well did not seriously dispute this legal proposition. The Tribunal was, therefore, mistaken in its view tha....