TMI Blog2002 (7) TMI 50X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 143(2) of the Act and after considering the materials and explanation, the Income-tax Officer has come to a definite conclusion. The Commissioner of Income-tax did not agree with the conclusion reached by the Income-tax Officer. Section 263 of the Act does not empower him to take action on these facts to arrive at the conclusion that the order passed by the Income-tax Officer is erroneous and prejudicial to the interests of the Revenue. Since the material was there on record and the said material was considered by the Income-tax Officer and a particular view was taken, the mere fact that a different view can be taken, should not be the basis for an action under section 263 of the Act and it cannot be held to be justified. - IT Referen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s of the assessee-firm and the residential premises of the assessee-firm and residential premises of the partners on November 28, 1992. During the course of search, unaccounted cash amounting to Rs. 1,80,000 was seized. Similarly, silver ornaments and jewellery valued at Rs. 7,02,728 were seized. While finalising the assessment for the assessment year 1981-82, the Income-tax Officer has added Rs. 15,000 as the assessee's income from undisclosed sources represented by the credits in the accounts of seven parties as mentioned in the order under section 263 of the Act. After narrating in detail the facts of the case as well as-the explanation offered by the assessee in reply to the notice issued under section 263 of the Act, the Commissioner o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view of a search conducted under section 132 of the Act. The Tribunal has further observed that the Income-tax Officer was fully aware of the gravity of the situation and the interests of the Revenue. After obtaining necessary information from the assessee, the Income-tax Officer has framed the assessment wherein he had not accepted the explanation given by the assessee in its entirety and had in fact made certain additions. The Tribunal has further taken the fact into account that as against the total loss of Rs. 2,777 shown by the assessee, the Income-tax Officer had framed the assessment on a total income of Rs. 34,350. In this view of the matter, the Tribunal was of the view that the Commissioner of Income-tax was not justified in init ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d advocate appearing for the respondent-assessee, has drawn our attention to the decision of the Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 wherein the Supreme Court has observed as under: "A bare reading of section 263 of the Income-tax Act, 1961, makes it clear that the prerequisite for 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 interests 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 interests of the Revenue. If one of them is absent--if th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law." From the above observations made by the Supreme Court, it is clear that the provisions of section 263 cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is only when an order is erroneous that the section will be attracted and incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the or ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... there on record and the said material was considered by the Income-tax Officer and a particular view was taken, the mere fact that a different view can be taken, should not be the basis for an action under section 263 of the Act and it cannot be held to be justified. In view of this and following the principles laid down by the Supreme Court in Malabar Industrial Co. Ltd.'s case [2000] 243 ITR 83, we are of the view that having regard to the facts and circumstances of the case, the Tribunal was justified in setting aside the order passed by the Commissioner of Income-tax under section 263 of the Act. We, therefore, answer both the questions in the affirmative, i.e., in favour of the assessee and against the Revenue. The reference is, ac ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
