AJIT K.SENGUPTA,J. - (1.) IN this reference under Section 256(1) of the Income -tax Act, 1961, the following question of law has been referred to this court for the assessment year 1979 -80 ; 'Whether the Tribunal was justified in holding that the material which was not in existence at the time when the assessment was made and came into existence afterwards could not form part of the records of the proceedings of the Income -tax Officer at the time he passed the order and cannot be taken into consideration by the Commissioner for the purpose of invoking his jurisdiction under Section 263(1) and, in that view, was correct in cancelling the order passed by the Commissioner of Income -tax under Section 263(1) ?'
(2.) SHORTLY stated, the facts are that the Income -tax Officer, while making the assessment under Section 143(3), accepted the value of plant and machinery and electrical installation as reflected in the balance -sheet in toto. The matter of valuation of the aforesaid assets referred to the Valuation Officer, New Delhi, was reported by the Valuation Officer much after the completion of the assessment. The valuation was made by the Valuation Officer at Rs. 16,12,000 as against Rs. 9,39,449 shown in the balance -sheet. The Commissioner of Income -tax took action under Section 263 of the Act and, after hearing the assessee, set aside the assessment and directed the Income -tax Officer to make a fresh assessment after making proper enquiries in accordance with law. Against the said order of the Commissioner of Income -tax the assessee came in appeal before the Tribunal. Counsel for the assessee submitted that the assessment so made by the Income -tax Officer could not be said to be erroneous or prejudicial to the interests of the Revenue inasmuch as the report of the Valuation Officer (P and M), New Delhi, was not in existence at the time of making the assessment. The Tribunal held that the fact that the report of the Valuation Officer (P and M), New Delhi, was not in existence and the assessment was made by the Income -tax Officer on February 1, 1983, was not controverted by the Revenue authorities. Therefore, the material which was not in existence at the time the assessment was made and came into existence afterwards could not form part of the records of the proceedings of the Income -tax Officer at the time he passed the order and cannot be taken into consideration by the Commissioner for the purpose of invoking his jurisdiction under Section 263(1). Reliance has been placed on a decision of a learned single judge of this court in Ganga Properties v. ITO : [1979]118ITR447(Cal) . The short question which calls for determination is whether the Commissioner, in exercising the jurisdiction under Section 263(1), can rely on the valuation report which came into the possession of the Income -tax Officer subsequent to the completion of the assessment. In Ganga Properties v. ITO : [1979]118ITR447(Cal) , the learned single judge of this court held that the word 'record' in Section 263(1) cannot mean the record as it stands at the time of examination by the Commissioner but it means the record as it stood at the time the order in question was passed by the Income -tax Officer. Therefore, the materials which were not in existence at the time the order was passed but afterwards came into existence cannot form part of the record of the proceedings of the Income -tax Officer at the time he passed the order and, accordingly, such materials cannot be taken into consideration by the Commissioner for the purposes of invoking his jurisdiction under Section 263(1).
(3.) OUR attention has been drawn to a decision in the case of Jagatjit Distilling and Allied Industries Ltd. v. State . There, the Punjab and Haryana High Court was concerned with the question of the power of the revisional authority. There, the court held that the power under Section 21 of the Punjab General Sales Tax Act, 1948, cannot be exercised so as to reassess a dealer in respect of any turnover which had escaped assessment or which had been under -assessed in consequence of any definite information which comes into his possession after the original order of assessment was made. The revisional authority has to confine itself to the record which is called for by it. It cannot take into consideration any fresh material in order to come to a different conclusion than the one to which the assessing authority came on the material before it.;