M.C.DESAI,C.J. - (1.) THE following question has been referred to this Court by the Tribunal, Allahabad Bench at the assessee's instance under S. 66(1) of the IT Act: "Whether, in the circumstances of the case, an appeal lay to the Tribunal against the order of the AAC dismissing the appeal as incompetent ?"
(2.) THE facts, as stated in the statement of the case, are these. During an assessment proceeding the assessee claimed relief under S. 25(3) but the claim was not considered by the ITO. The assessee filed an appeal from the assessment order passed against him under S. 23 and the AAC set aside the assessment order and directed the ITO to give a finding on the question whether the provision of S. 25(3) was attracted by the facts of the case. It is to be noted that the AAC who set aside the order did not direct the ITO to make a fresh assessment after further inquiry and simply called for a finding on the question about the applicability of S. 25(3). The ITO recorded the finding that there was no discontinuation of business within the meaning of S. 25(3). The AAC when the matter went back to him disagreed with the ITO's finding, held that the assessee was entitled to relief under S. 25(3) or S. 25(4) and directed him to modify the assessment accordingly. Before doing so he himself decided other points raised by the assessee before him in the appeal, giving relief on some of them. He reduced the amount of the assessment by a certain amount "subject to the relief under S. 25(3) or S. 25(4) as above". The case went back before the ITO and he held that the assessee was entitled to the relief of Rs. 5,15,000 and odd under S. 25(3) or S. 25(4) as against the relief of Rs. 5,72,000 and odd claimed by the assessee. Against his order an appeal was preferred by the assessee to the AAC. The AAC held that no appeal lay from the order of the ITO under S. 30 and dismissed it. The assessee preferred an appeal from his order to the Tribunal contending that he had jurisdiction to decide the question of relief to which it was entitled under s. 25(3) or S. 25(4). The Tribunal dismissed the appeal saying that the order passed by the AAC was not an order under S. 31 and that consequently no appeal lay from it. It is not in dispute that the Tribunal could hear the appeal if the order passed by the AAC dismissing the assessee's appeal as incompetent could be said to be an order under S. 28 or under s. 31. Sec. 28 has no applicability and it is not the assessee's case also that the order passed by the AAC could be said to be one under S. 28.
(3.) SEC . 31 deals with orders that an AAC can pass on hearing an appeal which lies to him under s. 30. An appeal lies to him under S. 30 at the instance of an assessee objecting to the amount of income assessed under S. 23 (an appeal lies to him from certain other orders also but it is not the assessee's case that the last order of the ITO was any of them). Sec. 30(2) lays down that the appeal would ordinarily be presented within 30 days of the receipt of the notice of demand and that the AAC may admit an appeal after the expiration of the period if he is satisfied that the appellant had sufficient cause for not presenting it within it. Sub -s. (3) lays down that the appeal shall be in the prescribed form and shall be verified in the prescribed manner. Sub -s. (1) of S. 31 days down that the AAC shall fix a day and place for the hearing of the appeal and sub -s. (3) says that, in disposing of an appeal, he "may, in the case of an order of assessment, - (a) confirm, reduce, enhance or annul the assessment, or (b) set aside the assessment and direct the ITO to make a fresh assessment after making such further inquiry as the ITO thinks fit or the AAC may direct, and the ITO shall thereupon proceed to make such fresh assessment...." ;