- (1.) THE Income-tax Appellate Tribunal (Delhi Bench " A ") has referred the following question of law for our opinion : " Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that it was within the competence of the Appellate Assistant Commissioner while disposing of the appeal under the Income-tax Act, 1961, to have set aside the assessment with a direction to the Income-tax Officer to make a fresh assessment from the return stage under the provisions of the Indian Income-tax Act, 1922 ? "
(2.) ON facts there is not much dispute. The assessee is a co-operative society. It is engaged in transport business. It filed a return of income on October 20, 1961, for the assessment year 1961-62. The total income shown in the return amounted to Rs. 35,815. On the 29th of January, 1966, the assessee filed a revised return. In this return, a loss of Rs. 7,026 was shown. The Income-tax Officer made the assessment under Section 143 (3) of the Income-tax Act, 1961. He determined the taxable income at Rs. 40,770. An appeal was preferred by the assessee to the Appellate Assistant Commissioner of Income-tax against the order of the Income-tax Officer. The main contention before the Appellate Assistant Commissioner was that the assessment was bad in law as the same had been completed under the 1961 Act, contrary to the provisions of Section 297 (2) (a) of the 1961 Act. In fact, the assessment should have been made under the Income-tax Act of 1922. This contention was accepted by the Appellate Assistant Commissioner and he held that the Income-tax Officer erred in completing the assessment under the provisions of the Income-tax Act of 1961. The Appellate Assistant Commissioner while acting under Section 251 (1) (a) of the Income-tax Act of 1961 did not annul the assessment. He instead set aside, the assessment and referred the case back to the Income-tax Officer to make a fresh assessment under the 1922 Act. The assessee was dissatisfied with this course inasmuch as he wanted the assessment to be annulled. He preferred an appeal to the Appellate Tribunal. The Tribunal by its order, dated December 12, 1968, affirmed the decision of the Appellate Assistant Commissioner. At the instance of the assessee, the Appellate Tribunal has referred the question of law, already set out above, for our opinion.
(3.) AFTER hearing the learned counsel for the assessee, we are clearly of the view that there is no merit in the contention of the assessee that the assessment should have been annulled. Section 251 (1) (a) of the 1961 Act, which is in the following terms, gives ample power to the Appellate Assistant Commissioner to adopt the course that he adopted in the present case : " 251. (1) In disposing of an appeal, the Appellate Assistant Commissioner shall have the following powers (a) in an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; or he may set aside the assessment and refer the case back to the Income-tax Officer for making a fresh assessment in accordance with the directions given by the Appellate Assistant Commissioner and after making such further inquiry as may be necessary, and the Income-tax Officer shall thereupon proceed to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment. ";