P.Krishna, J. - (1.) The Income Tax Appellate Tribunal, New Delhi at the instance of the Income tax Department has referred the following question of law under Section 256 (1) of the Income Tax Act 1961 (hereinafter referred to as the Act) for opinion to this Court: "Wheher on the facts and in the circumstances of the case, Tribunal is right in holding that the assessing officer has no jurisdiction to change the status while making the assessment Under Section 143 (1) and in that background whether a change in the status is appealable to the first appellate authority?"
(2.) The assessment years 1986-87 to 1988-89 are involved in the present reference. The brief facts of the case are as follows: The assessee respondent had filed the income tax returns and claimed the status as "specified trust". The Income Tax Officer completed the assessment for all these years under Section 143(1) of the Act. However, he while making the assessment under Section 143 (1) of the Act adopted the status as that of A.O.P. and charged tax at maximum marginal rate. The said assessment orders were Challenged by way of filing appeals before the Deputy Commissioner of Income Tax (Appeals) and it was contended that the Income Tax Officer had erred in taking status of A.O.P. and charging maximum rate of tax. it was claimed that as per the returns in the status of specified family trust there was no tax liability in view of Section 161 of the Act as the Trust was not a business trust. But the Income Tax officer by treating the assessee in the status of A.O.P. has created tax liability. After overruling the objection that the appeal is not maintainable, the Deputy Commissioner of Income Tax (Appeals) allowed the appeals and held that under Section 143 (1) of the Act the Income Tax Officer could make certain adjustments for the determination of the income, but could not change the status and charge at maximum rate of tax. The order of the Deputy Commissioner (Appeals) has been confirmed by the Tribunal. The Tribunal agreed with the view point of the First Appellate Authority that the status of the assessee could not be changed while framing assessment under Section 143 (1) of the Act.
(3.) Heard Shri A.N. Mahajan, the learned standing counsel for the Department and Shri Rakesh Ranjan Agrawal, the learned counsel for the assessee respondent;