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Judgment
BY THE COURT:
By this reference under s. 256(1) of the IT Act, 1961, the Tribunal has referred the following question of law to this Court for opinion at the instance of the assessee.
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the ITO could make additions in respect of sources of income which were not considered by him in the original assessment proceedings? "
The relevant assessment years are asst. yrs. 1970-71, 1971-72 and 1972-73.
None appears for the assessee. The matter was on board from time to time and on every occasion, the case was adjourned to enable the assessee to appear and argue the case. if he is interested in pursuing the same. Despite that, none appeared.
We have heard Mr. R.V. Desai, learned counsel for the Revenue who submitted that in this case the entire assessment having been set aside with a direction to make fresh assessments de novo, ITO has the same powers to make assessment as he had when making an assessment under s. 143(3) of the Act. He pointed'' out the operative part of the order of the AAC from the statement of the case which reads as follows:
The ITO may however make any other enquiries that he deems fit for; completing the assessment. The assessments for all the three years are set ''guide to be made de novo, and for statistical purpose the appeals are allowed.
He, therefore, submits that the entire assessment having been set aside, it was open to the ITO to make a fresh assessment in accordance with law after making due enquiries, which the ITO in the instant case has done. He further submits that it is clear from the order of the AAC that the entire assessments were set aside with a direction as to make assessments de novo. He, therefore, submits that in the facts and circumstances of this case, answer to the question is self-evident and, accordingly, it should be answered in the affirmative and in favour of the Revenue.
We have carefully considered the submissions of Mr. Desai. There is no dispute about the fact that the entire assessment in this case were set aside by the AAC with a direction to make assessments de novo after making such other enquiries as may be deemed necessary for that purpose. That being so, the ITO has the same powers in making the fresh assessments as he had originally when making an assessment under s. 143(3) of the Act.
The scope and ambit of the enquiry for assessment is in no way restricted in such a case. In the instant case, the entire assessments had been set aside by the first appellate authority with a direction to make fresh assessment de novo after making necessary enquiries. The ITO acted accordingly and made the fresh assessment under s. 143(3) of the Act having regard to the material available with him. There is no infirmity in this action of the ITO.
However, in view of the fact that the assessee, at whose instance this reference is made, is absent, we do not propose to answer the question referred to us. This reference is, therefore, returned unanswered.