TMI Blog1992 (12) TMI 70X X X X Extracts X X X X X X X X Extracts X X X X ..... ued show-cause notice to the appellant as to why the assessment order dated 10-3-1987 should not be set aside. The appellant submitted a detailed reply dated 14-3-1989 and also made oral submissions on 16-3-1989. It was contended that the smuggled goods did not belong to the appellant and the finding of the Collector of Customs was that the owners of the goods were one. Yousuf alias Vattaparambath Yousuf and one P. Mohammed Kunhi and not the assessee. It could not be held that the contraband goods belonged to the assessee. There was no basis that the assessment order dated 10-3-1987 suffered from any error prejudicial to the revenue. It was further contended that the details gathered by the learned Commissioner of Income-tax and the nature of investigation and the result thereof to form an opinion other than what is confirmed and held by the Customs Department were not available either in the notice issued under section 263 of the I.T. Act or in the annexure thereto. Thus, the basis for the formation of the opinion was wanting. It was also contended that even if it is held that the appellant was the owner of the contraband goods in the forbidden business, inasmuch as, there was con ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section 263. He further submitted that in case the proceeding of the Collector of Customs dated 10-6-1985 was the material before the Commissioner of Income-tax, on the basis of which he proceeded to initiate action under section 263, he would submit that the Customs Department has not found the appellant to be the owner of the smuggled goods and has emphatically held that the ownership was traceable in the hands of Yousuf and Mohammed Kunhi and not the appellant. Therefore, the inference of the Commissioner of Income-tax that the appellant is the owner of the smuggled goods was based on no material and hence there was no basis for the formation of the belief that the investment in the smuggled goods had escaped the notice of the Income-tax Officer or otherwise not considered by him in the assessment order dated 10-3-1987. Apart from lack of basis for the formation of the belief it has not been shown in the order under section 263 how prejudice was caused to the revenue by the impugned assessment order and there was no finding on that score. Therefore, he submitted that in the facts and circumstances of the case, the Commissioner's action is without jurisdiction and the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Though in the notice issued under section 263, the learned Commissioner had indicated that the appellant was the owner of the goods seized from him by the Customs Department and as per the orders of the Customs Department it was found that the assessee was not the owner of the goods, but only arranged for the transportation of the smuggled goods there was always an opportunity to the appellant to set right the records and in fact an opportunity was given to the appellant to make his submissions. After considering the appellant's submissions--written and oral--the learned Commissioner of Income-tax felt that these facts were not before the Income-tax Officer when he passed the assessment order and the submissions required detailed examination and in this view of the matter he set aside the assessment order with a direction to redo the same in accordance with law after affording adequate opportunity to the assessee. The CIT is entitled to pass such an order and there is no wanting of jurisdiction on the part of the learned Commissioner of Income-tax. There was material for the formation of the belief and the operative part of his order had not done any prejudice to the appellant beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the assessment have not been either fielded before the learned assessing authority or evaluated and much less was there an opportunity for the ITO to examine those aspects vis-a-vis the assessment. It has been held by the jurisdictional High Court in Malabar Industrial Co. Ltd.'s case that the words "prejudicial to the interests of the revenue" are of wide import and they should not be limited to a case where the order passed by the assessing authority can be considered to be one prejudicial to the revenue administration as such. In other words, if the Assessing Officer had not applied his mind to a case in all its perspective the order can be said to be erroneous so far as it is prejudicial to the interests of revenue conferring jurisdiction upon the Commissioner of Income-tax under section 263. Corning to the facts of the case, it was gathered that the contraband goods were seized from the vehicles hired or otherwise arranged by the appellant on 15-9-1983 and 16-9-1983 which fell within the previous year relevant to the assessment year 1984-85 by the Customs Department. When there was no hire charges paid by the appellant for transportation of the contraband articles arranged ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ccordance with law. We do not find any infirmity in the order of the learned Commissioner of Income-tax. This is the most the learned Commissioner of Income-tax can do in the circumstances of the case, especially when the appellant had not furnished any material before the Commissioner of Income-tax as to the expenses incurred or the investments made by him in connection with the transportation of the smuggled goods : nor has he demonstrated before the Commissioner of Income-tax that he had already included in his return of income the net profit arising on such transportation by way of brokerage or commission from the smugglers. Therefore, we reject the contention of the learned counsel for the appellant that the order of the Commissioner of Income-tax was wanting in a finding on the materials furnished by the appellant in the course of 263 proceedings. 8. In the result, I.T. A. No. 388 (Coch.)/1989 is dismissed. I.T.A. No. 114 (Coch)/1992 : 9. The grievance of the appellant is that the authorities have held that the contraband goods belonged to the appellant and that the value of such goods in a sum of Rs. 1,01,67,775 remained as unexplained investment in the hands of the ap ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has categorically held as follows :-- (i) "I hold that Sri Basheer Ahammed had arranged the transportation/concealment of the contraband goods under seizure. I also hold that Sri Basheer Ahammed had arranged similar contraband landings/conceal ments and transportations on previous occasions." (Para. 11(a) of the Collector of Customs proceedings dated 10-6-1985) ; (ii) "I therefore hold that Sri Yousuf alias Vattaparambath Yousuf was concerned with the contraband under seizure and that it was on behalf of him that Sri Basheer Ahammed had transported and concealed the contraband landed at Kurichiyil Sea Shore in the night of 14/15-9-1983." (iii) "I therefore hold that Sri P.Mohammed Kunhi is the owner of part of the contraband goods landed at Kurichiyil Sea Shore in the night of 14/15-9-1983 and that he had taken part in the contraband landing operations in the night." (iv) "I therefore hold that Sri P.K. Ummerkutty had knowingly given facilities to Sri Basheer Ahammed to conceal contraband in the godown under his control." (v) "I find no reason to disbelieve the evidence in the statements against Sri P.V. Usmankutty. I find that Sri P.V. Usmankutty had actively assiste ..... X X X X Extracts X X X X X X X X Extracts X X X X
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