TMI Blog1992 (7) TMI 347X X X X Extracts X X X X X X X X Extracts X X X X ..... . On examination of the case records of this assessee and other assessees of this group, the CIT, Gujarat-I came to a conclusion that the orders were erroneous in so far as they were prejudicial to the interest of Revenue and as such required modification. Accordingly notices under s. 263 of the IT Act, 1961 and under s. 25(2) of the WT Act, 1957 were issued by the CIT, asking the assessee to show cause as to why appropriate direction should not be issued to the Assessing Officer for making proper investigation and completion of assessment in this case as well as other cases of this group. 3. The assessee made various submissions in writing as well as orally before the CIT. It was submitted that the returns were filed in response to the various circulars issued by the CBDT in regard to the Amnesty Scheme. The assessments were completed under s. 143(1) of the IT Act and under s. 16(1) of the WT Act. In view of the various assurances contained in the circulars of the Board issued under s. 119 of the IT Act and the corresponding section of the WT Act, the assessments so completed could not be reopened under any circumstances. The CIT, however, disagreed with the counsel in pa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oth under s. 263 of the IT Act and s. 25(2) of the WT Act for all the years concerned. The other assessees of this group have also been treated accordingly. The learned counsel for the assessee invited our attention to the various papers and documents contained in the detailed paper book submitted before us in several volumes in this case as well as in other cases. It was submitted that according to the Department in the course of search and seizure operations in this group, they found that there were no purchases of gold ornaments prior to 31st Jan., 1978. It was submitted that there is no piece of evidence anywhere on the record or in the statements given by this assessee during the search and seizure proceedings. The counsel proceeded to submit that the assessee submitted the revised returns of income and wealth for the various years under the Amnesty Scheme which was in existence between 26th June, 1985 to 31st March, 1987. It was on the basis of such assurances issued by the Department by the circulars given below that the assessee came out with disclosure of income and wealth for the earlier years without any fear that the disclosure would result into fishing enquiri ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ould be made to find out the date of the acquisition of the wealth. It was submitted that in view of para 3 of this letter would be absolutely contrary to the spirit of the amnesty that has the blessings of the Finance Minister. It was submitted that in this case this assessee did not file any return for the asst. yr. 1970-71 as alleged by the CIT in his order under s. 263 of the IT Act and under s. 25(2) of the WT Act. In this case the return was filed for asst. yr. 1976-77 as the first year. The first assessment year having taxable. According to the counsel this shows that the CIT did not properly apply his mind to the facts of the case and proceeded to set aside the assessment without correctly verifying the facts. It was submitted that in the case of not only this assessee but other assessees of this group as well that the CIT has passed the said orders talking only about the asst. yr. 1970-71. It was submitted that the order of the CIT should be quashed in this case in particular on the ground that he did not apply his mind to the facts of the case. Our attention was invited to ITAT, Delhi Bench order in the case of Anurag Agarwal vs. ITO (1990) 34 ITD 291 (Del). It was submit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion. It was submitted that the assessee made the declaration not only under the WT Act but also under the IT Act, paid the taxes and complied with all the requirements of the Amnesty Scheme. It was not open to the CIT to disregard the circulars of the Board and proceed to exercise his revisional jurisdiction under s. 263 of the IT Act and under s. 25(2) of the WT Act on the footing that the source of investments made by the assessee may have come from somebody else without having any definite material on record. Inviting our attention to the decision of the Gujarat High Court in the case of Tayyabji Lukmanji vs. CIT (1981) 24 CTR (Guj) 204 : (1981) 131 ITR 643 (Guj) it was submitted that any revised return filed in pursuance of the circulars of the Board beneficial to the assessee would protect the assessee from penalty proceedings. In that case the Tribunal had confirmed the penalty imposed on the assessee but the matter was remanded to the Tribunal for reconsideration in view of the beneficial circular of the Board. 4.1 Our attention was invited to the fact that when the Amnesty Scheme circulars were issued under s. 119 of the IT Act, the Department was very well aware ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be well advised to give evidence of his having earned the income and possessing the same by way of entries in the books of account. It was submitted that this assessee had not made any entries in the books of account, etc. A specific mention was made to the answer to question No. 11. It was submitted that if the taxpayer tries to introduce black money and benami investments in the names of ladies or minors, they would do the same at their own risk. Attention was invited to para 6 of the order of the CIT under s. 263 to submit that the assessee was making declaration of possession of ornaments in an earlier year whereas the year in which she came into possession is yet to be established by enquiry. He submitted that all the persons including the assessee of this group have shown an income of ₹ 51,000. This, according to the Departmental Representative, shows that the assessee was not declaring true and correct income but was trying to cover up for somebody else. Referring to the letter of Shri S.K. Roy dt. 17th June, 1986 it was submitted that the facts of that case are entirely different from the facts of this case. It was, therefore, submitted that the CIT was fully justifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... According to the CIT, the question as to whether she was ever in possession of such ornaments itself is to be established because it may be that such ornaments did not belong to her but belonged to somebody else. So many assumptions have been raised in the order. The whole order is based on conjectures and surmises. The letter of Shri S.K. Roy dt. 17th June, 1986 is relevant in this connection. In para 3 it has been made clear that the assessee could pay tax on the undisclosed income to explain the acquisition of the assets. Then the assessee has to pay wealth-tax on the wealth so acquired out of the taxed income. In the same paragraph it has been observed : .... if such voluntary returns are made the basis of roving enquiries to find out the date of acquisition of the wealth and substantive assessments are made for years other than the year for which the income has been disclosed without the ITO having any material on record, it will be absolutely contrary to the spirit of amnesty that has the blessings of the Finance Minister The order of the CIT does not mention any year for which he has any reasonable apprehension of the assessee having acquired the ornaments. He talks vaguel ..... X X X X Extracts X X X X X X X X Extracts X X X X
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