A. Kalyanasundharam, Accountant Member - (1.) THESE are four appeals-two by the assessee and two by the department involving common issues in common years, and, therefore, they are disposed of by a common order.
(2.) The first common issue in the assessee's appeals is in respect of the powers of the IAC under Section 144B of the Income-tax Act, 1961 ('the Act') as to whether they are limited to the various issues objected to by the assessee or would cover the entire assessment as a whole thereby giving powers of enhancement to the IAC while giving of directions under Section 144B. On behalf of the assessee Mr. R.C. Ghiya submitted that reading of Section 144B(4) reveals that as a consequence of a draft order made by the ITO, the assessee has to raise his objections, which objections will be forwarded to the IAC along with the draft assessment order for his directions. Thereby the IAC's jurisdiction is limited to examination of the draft assessment order vis-a-vis the objections raised by the assessee and he is to give such directions as he deems fit in respect of matters, which are objected to by the assessee. It is only by invoking of provisions of Section 144A of the Act that the IAC could suo motu after giving an assessee an opportunity to issue such directions in respect of matters not considered under Section 144B. In the present case, the IAC did not invoke Section 144A and, therefore, his directions which are given under Section 144B is clearly indicative that he has overstepped his jurisdiction and also enhanced the addition proposed to be made by the ITO which is invalid.
(3.) ON this issue, the learned senior departmental representative Mr. Koolwal referred to the order of the Delhi High Court in the case of Sudhir Sarin v. ITO [1981] 128 ITR 445. Referring to this ruling, he submitted that it was held that under Section 144B, the IAC has powers to enhance the assessment but he can do so only after giving an opportunity to the assessee. In the present case, the IAC has complied with this, as the assessee was given the opportunity after which only he had given such directions as he thought fit. He, therefore, pleaded that in view of the said ruling of the Delhi High Court, there is no merit in the plea raised by the assessee.;