Mst. INAYAT BEGUM vs COMMISSIONER OF INCOME-TAX, ZONE-B, LAHORE

' This writ petition arises out of proceedings taken by the Income-tax authorities towards the recovery of income-tax from the petitioner regarding which a reference is already pending in the High Court. The petitioner feels aggrieved as according to her the Income-tax authorities are required to wait for the answer to the reference before making a fresh assessment.

2. The brief facts of the case are that the assessment for the years 1968-69 and 1969-70 was set aside by the Income-tax Appellate Tribunal on 18-9-1979. The Income-tax Appellate Tribunal, however, decided to refer a question of law to the High Court which reference is still pending. The question of law framed by the Tribunal is as follows:- "Whether after giving a finding that the assessment was illegal for lack of prior approval by the I.A.C. Which was must whether the learned Tribunal was right in setting aside the order instead of cancellation."

' While the reference is still pending in the High Court the Income-tax Officer has passed a fresh assessm ent order on 30-6-1980. The petitioner challenged the orders in appeal and then in second appeal, but the objection of the petitioner to the competence of the proceedings in view of the pendency of the reference in the High Court did not prevail with the Income-tax authorities. This brings the petitioner to the High Court in its extraordinary jurisdiction.

3. The learned counsel for the petitioner has argued that the assessment once made does not come to an end until the proceedings with regard to the assessment have finally been concluded and since the matter of first assessme nt is still pending in the High Court, the second assessment order is illegal. Reliance is placed on the judgment of the Privy Council in the case of Commissioner of Income-tax Bombay Presidency and Aden v. Khemchand Ramdas (1938) 6 I T R 414. The learned counsel for the respondent on the other. Hand has argued that the first assessment having been set aside, the Income-tax authorities are not prevented from passing a fresh assessment order but he fails to notice that the Appellate Tribunal did not simply set aside the first assessment order, but referred the matter to the High Court to seek its opinion on the question "whether the learned Tribunal was right in setting aside the order instead of cancellation". While this reference is pending it is not open to the Income-tax authorities to treat the assessment order as simply set aside or even cancelled. They have no choice but to wait for the answer to the reference.

' In view of the above considerations the writ petition is allowed. The assessment order of 10-6-1980 and the subsequent proceedings are declared to be of no legal effect. There shall be no order as to costs.