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TMI Blog2012 (6) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... re not erroneous and prejudicial to the interact of the revenue within the meaning of section 263 of the Income Tax Act, 1961 and whether there was any material on record in support of the view of the Income Tax Appellate Tribunal in setting aside the orders appealed against before it." 2. The reference relates to the assessment year 1978-79 to 1983-84. Briefly stated the facts giving rise to the present reference are as follows: The assessee, by status an individual, carried on business of manufacture and sale of gillet ornaments. During the course of assessment proceedings, for the assessment year 1984-85, it transpired that the assessee had constructed a cinema building. The matter was referred by the Assessing Officer to the Departmen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en he was going to retire on this date itself. He observed that the order passed by the Assessing Officer for the assessment years 1978-79 to 1983 -84 was sketchy. After referring to the fact that there was vast difference between the investment estimated by the Departmental Valuation Officer and that admitted by the assessee and further pointing out certain deficiency/irregularity in the assessments, the learned Commissioner of Income Tax, Allahabad, held that the order passed by the Assessing Officer was prejudicial to the interest of the Revenue and erroneous. Vide order under section 263 of the Income Tax Act, 1961 dated 30th March, 1992, the assessments were cancelled to be made afresh after considering the valuation report of the Depa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt order is prejudicial to the interest of revenue. The order under section 263 will not be justified for making fishing and roving enquiries. On a proper appreciation of the material placed before us and after hearing the rival submissions, we are of the view that the orders of the Commissioner of Income Tax under section 263 for all the years under consideration will have to be quashed. We do so. The ration laid down in 170 I.T.R. 28 (All.) (Supra) is fully applicable to the facts of the case. The same view has been expressed by the Hon'ble Allahabad High Court in 188 I.T.R. 608. We are not impressed by the argument of the learned D.R. that the order becomes prejudicial and erroneous because the officer was going to retire shortly or beca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83/109 Taxman 66 (SC); CIT v. Bhagwan Das [2005] 272 ITR 367/142 Taxman 1 (All.); and CIT v. Deepak Kumar Garg [2008] 299 ITR 435 (MP) 7. In the case of Malabar Industrial Co. Ltd. (Supra) the Supreme Court has held as follows: "A bare reading of this provision makes it clear that the prerequisite to the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interest of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interest of the Revenue. If one of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ak Kumar Garg (Supra) the M.P. High Court has held that in the case in hand, after hearing the authorised representative, the Commissioner has recorded a clear finding that the order of the Assessing Officer was erroneous as well as prejudicial to the interests of the Revenue. From the order of the Assessing Officer, it is clear that for want of time, the Assessing Officer had done only a semblance of enquiry and that too, in a very slipshod manner, as is clear from the post script in the order of the Assessing Officer. The Assessing Officer accepted the version of the assessee without proper enquiry and as a result a substantial amount of taxable income was not brought to tax. In such a case the assessment order would be erroneous and prej ..... X X X X Extracts X X X X X X X X Extracts X X X X
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