TMI Blog2000 (8) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income-tax who subsequently passed order under section 263 of the Income-tax Act, 1961 ? (2) Whether, on the facts and in the circumstances of the case, the order passed under section 263 of the Income-tax Act, 1961, cancelling the assessment with a direction to make a fresh assessment by holding the said assessment to be erroneous in so far it was prejudicial to the interests of the Revenue was legal and valid as the said assessment was completed under the order of the earlier Commissioner of Income-tax himself ? (3) Whether, on the facts and in the circumstances of the case it was legal and valid for the learned Commissioner of Income-tax under section 263 of the Act to hold the earlier order of the Commissioner as illegal and without jurisdiction on the basis of which the assessment in question was completed and the said assessment to be erroneous and prejudicial to the interests of the Revenue ?" On a scrutiny of the assessment for the assessment year 1981-82, the Commissioner of Income-tax was of the view that the assessment order for the assessment year 1981-82 is erroneous and prejudicial to the interests of the Revenue. Therefore, he issued the show-cause notice ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t proceedings for the assessment year 1981-82 in the case of this assessee, the Commissioner of Income-tax noticed that there was a search under section 132 of the Income-tax Act, 1961, at the premises of the assessee and during the search, the search party seized cash of Rs. 5,09,000, primary gold of Rs. 1,23,178, silver bars Rs. 23,976, six pieces guineas worth Rs. 6,500 and jewellery and ornaments valued at Rs. 82,736. According to the Commissioner of Income-tax, the Assessing Officer has not properly verified the facts, therefore, the order of the Income-tax Officer was erroneous and prejudicial to the interests of the Revenue. Before the Tribunal the argument put forth was that when the assessment under section 143(3) was made as per the directions of the Commissioner of Income-tax which was given in a letter dated August 29, 1984, the successor-Commissioner of Income-tax cannot question that assessment under section 263 of the Act. Counsel for the assessee also advanced the argument before the Tribunal that the doctrine of promissory estoppel should be invoked. The argument was also advanced that in view of the provisions of section 119, sub-section (3) of the Act when the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 143(3) was erroneous. In the last, the Tribunal has considered the two big items, that is cash of Rs. 5,09,000 found at the time of search and primary gold weighing 784.500 grams valued at Rs. 1,23,178. The assessee has submitted before the Tribunal that though before passing an order under section 132(5), the assessee explained the source of this amount but it was not accepted, again in appeal before the Commissioner of Income-tax under section 132(11) the details of the cash and primary gold were explained but that was also not accepted. In the regular assessment under section 143(3), the required details were furnished and source of the cash of Rs. 5,07,220 was explained that has been given at pages 61-62 of the paper book in an order of the Tribunal. The Tribunal also found that this amount was for payment to Bishan Dayal Goel a proprietor of a firm, Steel Trading Company, for supply of the steel. The Tribunal has considered all these details and materials on record produced before it regarding cash of Rs. 5,07,220 and primary gold worth Rs. 1,23,178 and finally held that the conclusion on the basis of the material on record, it cannot be said that the order of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er was nowhere in the picture. Regarding the primary gold the assessee's version was considered by the Assessing Officer in the proceedings under section 132(5) as well as by the Commissioner of Income-tax in appeal under section 132(11). Both of them did not accept the assessee's explanation for the acquisition of the primary gold. Even the Commissioner of Income-tax who issued instructions vide letter dated August 29, 1984, did not accept the assessee's explanation, but held that the assessee is assessable in respect of the same. He, however, directed that the entire value of Rs. 1,23,178 be spread over and assessed in two assessment years 1980-81 and 1981-82. Though this part of his instructions is seemingly in favour of the assessee, in fact it is seen from the returns for the assessment years 1980-81 and 1981-82 (pages 30 and 31 of the paper book) that in respect of both the years the income declared was more than Rs. 1 lakh and it may not really matter whether the entire primary gold is assessed in one year or more than one year. At any rate, the Assessing Officer by spreading the value of the primary gold over two assessment years for the purpose of assessment cannot be said ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income-tax on August 29, 1984 we are still left with the impression, that the criticism that the assessment has been completed without enquiry or verification is unjustified and if we may say so, with respect, uncharitable. The material produced before us does not bear out the criticism and is positively against such a conclusion." It is true that the explanation of the assessee was not accepted before passing orders under section 132(5) and the order under section 132(11) of the Act of 1961, but that does not bar the assessee to produce the relevant material before the Assessing Officer in a regular assessment under section 143(3) of the Act. When those details are furnished the enquiries were made in detail as referred to by the Tribunal referring to various pages of the paper book submitted before the Tribunal and, ultimately, the Tribunal came to the conclusion that the order of the Income-tax Officer was not erroneous. Detailed inquiry was made not only by the Assessing Officer on his own but detailed enquiry was made also as per the direction of the then Commissioner of Income-tax vide his letter dated August 29, 1984, addressed to the Assessing Officer. Whether the p ..... X X X X Extracts X X X X X X X X Extracts X X X X
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