A.K. Yog and Prakash Krishna, JJ. - (1.) The Income Tax Appellate Tribunal, Allahabad has referred the following two questions of law for the opinion of this Court, under Section 256(1) of the Income Tax Act 1961 (hereinafter referred to as the Act): 1. Whether, on the facts and in the circumstances of the case and in law, the Tribunal was justified in holding that an appeal lay against the order under Section 139(9) before the First Appellate Authority under Section 246 of the Income-tax Act, 1961 by treating the order under Section 139(9) as virtually an order under Section 143(3) of the Act?
(2.) Whether on the facts and in the circumstances of the case and in law the Tribunal was justified in upholding the order of the C.I.T. (A) setting aside the order passed under Section 139(9) of the Income-tax Act and directing the Assessing Officer to frame an assessment? 2. Assessment year 1989-90 is involved in the present reference. On 29th December, 1989 the assessee filed a return of loss of Rs. 2,07,42000/- and also brought forward losses of earlier years amounting to Rs. 1,30,22,414/-. The return was filed on the basis of operational result and complete profit and loss account and balance sheet could not be filed. The Assessing Officer by means of a letter asked the assessee to remove the defects by January, 31, 1990. The assessee sought for and was allowed time till March, 31st, 1990. The defects were neither removed within the aforesaid time nor further time was sought for. The Assessing Officer on June, 26, 1990 passed an order under Section 139(9) of the Act, holding the return as invalid and non-est. The order dated June, 26, 1990 passed by the Assessing Officer was challenged before the CIT (A) successfully. The contention of the assessee that the order passed under Section 139(3) was virtually an order under Section 143(3) as it was passed only after notice under Section 143(2) dated March, 28, 1990 was accepted and it was held by the CIT (A) that although the order before him was passed under Section 139(3) of the Act but it was in fact an order under Section 143(3) of the Act. The CIT (A) further directed the Assessing Officer to pass a fresh assessment order. The Department filed an appeal before the Tribunal on the ground that notwithstanding the issue of notice under Section 143(2), the order passed under Section 139(9) of the Act was not appealable. The said contention was repelled by the Tribunal and it confirmed the order passed by the CIT (A), holding that the appeal before the CIT (A) was maintainable.
(3.) Heard the counsel for the parties and perused the record. The learned standing counsel for the department has reiterated the submissions which were raised before the Tribunal to the effect that the order dated June, 26, 1990 was passed under Section 139(9) of the Act and such an order is not appealable under Section 246 of the Act. By making a reference to the order in question it was pointed out that the heading of the order reads as "order under Section 139(9) of the Income Tax Act 1961". It was submitted that the assessee was allowed time to remove the defects by March, 31, 1990 but it failed to do so nor sought further time and as such the order dated June, 26, 1990 cannot be treated as an order passed under Section 143(2) of the Act.;