Assessments under Income Tax Act 1961 are made U/S 143, 144, 147, 153. The criteria’s for selection of cases for scrutiny has been increased. While making the assessment the assessing officer has to appreciate all the facts properly. If there is any misinterpretation of facts it may result in injustice to the assessee. Some times when there is confusion regarding interpretation of facts as appearing in a particular case or confusion regarding any law point the assessing officer tends to consult their senior officials like Additional Commissioners or else. The instructions the senior officials give to the assessing officer orally in such case, the assessing officer is guided by such directions while making assessment or sometimes the assessee also tend to explain their case to the Additional commissioner or joint commissioner especially when the assessing officer is guided by the directions of the Additional or Joint commissioner while making the assessment.
In such cases sometimes the assessee may get the result in his favour if he properly explains the senior officials his case. But such directions given by senior officials to the assessing officer orally have no legal standing and if assessee does not explain his view to the senior officials, there is always a chance that the senior officials might give instructions to the assessing officer which may be prejudicial to the interest of the assessee since the assessee’s view point is not examined. Moreover the senior officials are not accountable for the instructions given orally in such cases.
I feel that the Tax Professionals in such cases where the assessing officer is guided by the oral instructions of the Additional or Joint commissioners while making assessments, section 144A of income tax act should be resorted to. Written application should be moved to the Additional or Joint commissioner for giving written directions to the assessing officer regarding the disputed interpretations of facts or law. At the same time an application can also be moved to the assessing officer requesting him to wait until the application u/s 144A is disposed off and the directions are issued to the assessing officer in that regard.
S. 144-A of the Income-tax Act, 1961 reads as follows :
“A Joint Commissioner may, on his own motion or on a reference being made to him by the (Assessing) Officer or on the application of an assessee, call for and examine the record of any proceeding in which an assessment is pending and, if he considers that, having regard to the nature of the case or the amount involved or for any other reason, it is necessary or expedient so to do, he may issue such directions as he thinks fit for the guidance of the (Assessing) Officer to enable him to complete the assessment and such directions shall be binding on the (Assessing) Officer.
Provided that no directions, which are prejudicial to the assessee shall be issued before an opportunity is given to the assessee to be heard.
Explanation: For the purposes of this Section, no direction as to the lines on which an investigation connected with the assessment should be made, shall be deemed to be direction prejudicial to the assessee.”
Thus it is clear that the Additional commissioner is bound to dispose off the application moved u/s 144A and the directions given to the assessing officer will be binding on him. Such a way adopted can also help reducing litigation between department and assessee since the verdict in the assessment will be based upon the directions of the senior officials. But presently section 144A is not utilized frequently by the tax professionals. The system of oral instructions in assessments from senior officials should be avoided and only written instructions should be given preference and this can be done by resorting to section 144 A and it will also help in doing proper justice to the assesses.