TMI Blog2001 (4) TMI 43X X X X Extracts X X X X X X X X Extracts X X X X ..... d the jurisdiction in view of the provisions of section 263 of the Income-tax Act (hereinafter referred to as "the Act" for convenience) and found that the dearness allowance or the dearness pay happened to be included in "salary". He further found the taxable income pertaining to the year 1982-83 to that tune. Nazir Singh appealed to the Income-tax Appellate Tribunal by challenging the said judgment and order, but the Income-tax Appellate Tribunal, Bench Indore confirmed the order passed by the Commissioner of Income-tax and, therefore, he came knocking at the door of the High Court for getting justice. Shri Nazir Singh placed reliance on some judgments for the purpose of justifying his submissions for demonstrating that the orders passed by the Commissioner of Income-tax and the Income-tax Appellate Tribunal were improper, incorrect and illegal. He placed reliance on: (1) The Division Bench judgment of the Gujarat High Court in the matter of Rajan Ramkrishna v. CWT [1981] 127 ITR 1; (2) CIT v. Prakashwati (Smt.) [1994] 210 ITR 567 (All) (3) The judgment of the Kerala High Court in the matter of CIT v. Rajakrishnan (Dr.) (B. A.) [1997] 226 ITR 323; and (4) The judgment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... necessarily presupposes statutory satisfaction that although there is some error with regard to the completed assessment, the order passed by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. It is not every error or mistake which should induce the Commissioner of Income-tax to resort to exercise of the powers under section 263 of the Act. In that matter, the Division Bench of the Kerala High Court pointed out that in the said case the marginal loss to the Revenue and, therefore, assumption of jurisdiction under section 263 was not valid. The Division Bench of this court in the matter of Shyam Sunder Gupta v. CIT [1998] 232 ITR 135, held that the satisfaction of the Assessing Officer could not be unfettered and had to rest on proper reasons. It had to be considered whether there were no reasons and if so, whether the Assessing Officer had requisite jurisdiction to reopen the assessments under section 143(2)(b) of the Act. In tax matters as well as in other matters, the eventual goal is to attain finality. Relying on this judgment, Shri Nazir Singh submitted that when the Commissioner of Income-tax decided to invoke the jurisd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issioner of Income-tax treated it to be one falling under the purview of the provisions of section 143(2)(b) keeping in view while calculating the definition of the word "salary". Shri Jain submitted that keeping in view that aspect of the matter it was not necessary for the Commissioner of Income-tax to follow the circular. The Circular bearing No. 176 (F. No. RA/1/86-87/DITO, dated August 26, 1987), issued by the Directorate of Inspection (Audit), New Delhi, which has been quoted in Puranmall Narayan Prasad Kedia (HUF) v. Asst. CIT [1994] Tax LR 224 (ITAT) (Cal) at pages Nos. 226-227 as well as in the matter of Prabhudas Tulsidas and Co. v. ITO [1997] 59 ITJ (Ahd.) 149, for the purpose of elaborating the point, (which does not find place in the judgment of this court). The said circular needs to be quoted verbatim: "It is, therefore, clear that the Government is prepared to suffer the loss of revenue by making summary assessments under section 143(1) on the ground that the time and effort involved in unearthing the loss is not commensurate with the benefit likely to be obtained and they may be better channelised in scrutiny of cases-involving larger revenue. A monetary limit of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, was bound by the said view of the Board depicted by the said circular. Secondly, when the same matter came to the notice of the Commissioner of Income-tax, it was obviously a matter touching the provisions of section 143(1) of the Act. When that was so, there was no reason for the Commissioner of Income-tax to think of invoking the provisions of section 263 of the Act, because he was to follow the instructions conveyed by the said circular making it clear that the scrutiny was to be used in such cases involving the evasion of tax of huge amounts. Nazir Singh's case involved the liability of payment of tax of RS. 1,300 only, and therefore, there was no reason apparently available for the Commissioner of Income-tax to come to a conclusion to call for the record of Nazir Singh's case and to start examining the propriety, correctness and legality of the order which has been passed by the Assessing Officer and, therefore, though the submissions advanced by Shri R. L. Jain prima facie appear to be lucrative, inducive and even digestible, its inherent fallacy and limping attitude gets exposed, right from this amendment. The act of the Commissioner of Income-tax becomes tainted with inf ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... x amount has to be taken into consideration. We quote our view supported by the view taken by the Allahabad High Court in the matter of Smt. Prakashwati's case [1994] 210 ITR 567. The Division Bench of this court in the matter of Shyam Sunder Gupta v. CIT [1998] 232 ITR 135, has dealt with this point, but to a limited extent only, and therefore, we find it necessary to elaborate the point which has been touched by this court in Shyam Sunder Gupta's case [1998] 232 ITR 135 but unfortunately not elaborated. This takes us to another aspect of the matter which is dealing with the need for invoking the jurisdiction in view of the provisions of section 263 of the Act. The jurisdiction in view of the provisions of section 263 of the Act would not be invoked in all sundry cases that is to be done in appropriate and fit cases only. If that is not done, the benevolent spirit of the circular which has depicted the view of the Board, after an elaborate discussion, would be frustrated. That is to be done in cases involving concealment and evasion of tax of huge amount. We get supported in our view on this point, by the view taken by the Kerala High Court in the matter of CIT v. Dr. B. A. Rajakr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. v. ITO [1977] 106 ITR 1, has to be kept in view. In that judgment, after discussing the other points which were involved, the Supreme Court pointed out its view in the following paragraph: "It has been said that the taxes are the price that we pay for civilization. If so, it is essential that those who are entrusted with the task of calculating and realising that price should familiarise themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. So far as the income-tax assessment orders are concerned, they cannot be reopened on the score of income escaping assessment under section 147 of the Act of 1961 after the expiry of four years from the end of the assessment year u ..... X X X X Extracts X X X X X X X X Extracts X X X X
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