JUDGEMENT
V.P. Elhence, Judicial Member -
(1.)THE assessee is aggrieved of the order dated 28-3-1988 of the learned Commissioner of Income-tax, Haryana, Rohtak for the assessment year 1984-85.
(2.)The assessee is M/s Lachman Dass Bakshi Ram, Gohana (Sonepat)--a registered firm which derives its income from dealing in the purchase and sale of timber goods. The assessee had filed its return on 31-7-1984 declaring an income of Rs. 41,620. The Income-tax Officer had given a notice dated 18-1-1985 to the assessee to which the assessee gave a reply dated 20-3-1985. The assessment was completed by the Income-tax Officer on 29-8-1985.
However, the Commissioner of Income-tax noticed that a survey had taken place on 10-10-1984 under Section 133A on the business premises of the assessee-firm after it had filed its return for the assessment year in question and that as a result of the same the Income-tax Officer had identified cash book, ledger and certain loose papers relevant to the period 1-3-1983 to 31-3-1984 which were later impounded under Section 131 on 5-11-1984. Loose papers impounded by the Income-tax Officer consisted of the following :--
(i) Balance sheet drawn as on 28-3-1984 ;
(ii) Balance sheet drawn as on 31-3-1984 ; and
(iii) In the balance sheet drawn on 31-3-1984 the assessee had shown cash credits totalling Rs. 96,200 in the names of the following 9 persons:--
Sl Name of the creditor Amount No. Rs. 1. Bhagwan Dass 2,500 2. Chander Singh 10,000 3. Kalu Ram 3,000 4. Ramji Dass, Village Kheri 31,700 5. Sube Singh Sarpanch 29,000 6. Gopal Dass 9,500 7. Sardari Lal 3,000 8. Blank space (i.e. No name) 5,000 9. Sham Lal 2,500 Total: 96,200
The learned Commissioner noticed that ledger folio was duly recorded against each name on the liability side of the balance-sheet. However, in the balance-sheet actually filed before the Income-tax Officer on 31-7-1984, the assessee had not shown cash credits in the names of the above 9 persons but only 2 cash credits of Rs. 48,700 and Rs. 47,500 in the names of S/Shri Naresh Kumar and Ashok Kumar (who were the sons of one of the partners namely, Shri Lachman Dass). These two cash credits also totalled to the same figure of Rs. 96,200. The learned Commissioner after perusing the material as also the assessment records of S/Shri Naresh Kumar and Ashok Kumar gave a notice to the assessee under Section 263 on 22-12-1987 on the basis that the cash credits in the names of S/Shri Naresh Kumar and Ashok Kumar were not genuine and that the Income-tax Officer who completed the assessment, had not made any enquiries to ascertain the genuineness thereof and therefore, the assessment order was erroneous in so far as it was prejudicial to the interests of the revenue. The Income-tax Officer had, in his assessment order, had accepted these cash credits.
(3.)THAT is how the assessee has come up in appeal before us. Shri Virendra Talwar, the learned counsel for the assessee submitted that the learned Commissioner could not assume jurisdiction under Section 263 in this case since the assessment was completed by the ITO under Section 143(3) after conducting proper enquiries and after obtaining evidence and its verification from the assessment records of the creditors in respect of loans taken from the creditors. Next, he submitted that since in the notice under Section 263, the learned Commissioner had mentioned that he had perused the assessment records of S/Shri Naresh Kumar and Ashok Kumar, it showed that what he had examined could not be called the record of the assessee and therefore, assumption of jurisdiction under Section 263 was improper and invalid. For this purpose, reliance was placed by him on the decision of the Hon'ble Calcutta High Court in the case of Ganga Properties v. ITO [1979] 118 ITR 447 wherein it was held that the word "record" under Section 263 could not mean the record as it stood at the time of the examination by the Commissioner but it meant the record as it stood at the time when the order was passed by the Income-tax Officer and that since the assessment record s of S/Shri Naresh Kumar and Ashok Kumar were not before the ITO who made the assessment order, the learned Commissioner could not invoke his jurisdiction. Next, it was submitted that even though the learned Commissioner had set aside the assessment order to be made afresh from the return stage after affording an opportunity of being heard to the assessee, the Commissioner having expressed a final opinion on the genuineness of the cash credits, his order was vitiated. For this purpose, reliance was placed by him on the decision of the Hon'ble Gujarat High Court in the case of Addl. CIT v. Mukur Corpn. [1978] 111 ITR 312. In that case, it was held that the only proper course for the Commissioner was not to express any final opinion as regards the controversial points. On the other hand, Ms. Bharati Mandal, the learned Departmental Representative strongly relied upon the order of the learned Commissioner and sought to justify the same. Reliance was placed by her on the following decisions :
(1) Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 (SC); and
(2) Gee Vee Enterprises v. Addl. CIT [1975] 99 ITR 375 (Delhi).
She submitted that no enquiries which were provoked by the survey and which the ITO issuing the notice dated 18-1-1985 intended, having been made, the jurisdiction under Section 263 had been rightly exercised by the learned Commissioner. She also submitted that the view expressed by the learned Commissioner was not final but prima facie view and that is why the assessment had been set aside to the Income-tax Officer for being made afresh after giving an opportunity of hearing to the assessee and after keeping in view the directions and discussions contained in his order.
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