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2006 (3) TMI 112 - HC - Income TaxRevision u/s 263 - Order passed by CIT - no reasons recorder - erroneous and prejudicial to the interests of the Revenue - HELD THAT:- On receipt of the show-cause notice dated August 14/19,1996 the petitioner submitted an elaborate reply laying materials before the Commissioner to show that sufficient proof of income of the assessee was laid before the Assessing Officer to enable the said authority to come to the conclusion that the investments in the house property were made from the known sources of income of the assessee. The said materials were in the form of balance-sheets and details of the funds available to the petitioner from time to time. In the above facts the petitioner-assessee had contended that the assessment order in question was not erroneous and prejudicial to the interests of the Revenue. The CIT on receipt of the reply of the petitioner could not have ignored the same. Rather, it was incumbent on the Commissioner to consider the explanations offered and on that basis to record his opinion/conclusion as to whether he still considered the assessment order in question to be erroneous and prejudicial to the interests of the Revenue and, if so, the reasons therefore. The Commissioner did not do that. Instead, in the order dated November 1, 1996, the Commissioner has recorded that the assessee has filed a written submission giving an exhaustive explanation in 7 pages and enclosing copies of various deeds, certificates, etc., which were required to be verified in detail. The Commissioner, in the above facts, set aside the assessment order and directed the Assessing Officer to make a fresh assessment after examining the submissions and contentions advanced by the assessee and after due scrutiny of the documents adduced. The course of action adopted was clearly impermissible in law in the absence of a finding that on consideration of the explanations submitted and for the reasons shown the assessment has to be reiterated to be erroneous and prejudicial to the interests of the Revenue. Unfortunately, the Commissioner did not do so which omission will have the effect of rendering the impugned order dated November 1, 1996, legally fragile. Thus, I am of the view that this writ petition has to be allowed which I hereby do. The impugned order dated November 1, 1996, is accordingly set aide. The writ petition is accordingly allowed.
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