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TMI Blog1981 (5) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... cause why the assessment orders should not be set aside as being erroneous and prejudicial to the interest of the revenue. In the initial notices by five items were shown. But, revised notices were sent and the assessee gave its objection. By his common order dt. 25th August, 1980, the CIT stated that the various items noted in the notices were considered to be erroneous and prejudicial to the interest of the revenue. He discussed a few items and stated that they were representations of the various issues and many of them could be considered only after the examination of the books of the assessee etc. He, therefore, set aside the assessments and directed the IAC to make fresh assessments. 3. The assessee has appealed against the common ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hout proper enquiry the CIT could not set aside the assessments. According to the assessee the CIT had simply adopted the audit objections without exercising his independent judgment on the issues and thus abdicated his functions. Reliance was placed on the decision of the Supreme Court in the case of Sirpur Paper Mill Ltd. vs. CWT (1970) 77 ITR 6 (SC) to contend that such surrender of judgment by the CIT vitiated his order. Similarly, it was argued that by leaving open the question as to whether the assessment was erroneous by asking the IAC to enquire into the matter, the CIT had failed to give a finding which alone conferred the power of revision as held by the Karnataka High Court in the case of T. Narayana Pai 98 ITR 422. Reliance was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssess continued in all cases with the ITO. It was submitted that merely because the ITO was bound by certain directions of the IAC it could not be said that the assessment order was passed by the IAC so as to take it out of the purview of s. 263. It was then argued that the assessment must be considered to have been made hastely and without proper enquiries and, therefore, the CIT was justified in setting aside the assessment for making fresh assessment. It was also submitted that the matters in respect of which notice was issued u/s 263 were not matters in respect of which direction have been given by the IAC. Reliance was placed on the decisions in the cases of Rampyari Devi Saraogi vs. CIT (1968) 67 ITR 84 (SC), Smt. Tara Devi Aggarwal v ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n u/s. 263 to revise the orders of assessment made by the following the procedure laid down u/s. 144B. 6. We find that the alternative argument of the assessee that the common order of the CIT was not a speaking order also has sufficient force. A perusal of the common order of the CIT show that he has not given a clear finding that any of the items listed in his order were erroneous and prejudicial to the revenue even after considering the objection of the assessee. For instance, according to the CIT, the remuneration paid to the Managing Director was allowed beyond the ceiling prescribed u/s. 40A(5) (c) (i). But he has not at all considered the objection of the assessee that this section has no application and the expense allowed was with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... essary material were already on record of the ITO has not been denied by the revenue. Therefore, it would not be sufficient to say that they must be reconsidered on the presumption that the ITO might not have considered those items which have been allowed. The cases cited on behalf of the revenue are cases of assessments made in undue hurry and even where further enquiry was directed by the CIT, there was a finding that the assessment already made was erroneous and prejudicial to the revenue. On the other hand. In the present case, there is no material to show that the assessment were made in a hurry specially when the procedure laid down u/s. 144B has been followed and a senior Officer of the Department has been associated in making the as ..... X X X X Extracts X X X X X X X X Extracts X X X X
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