- (1.) THE subject matter of challenge in this appeal, of the year 2003, which is yet to be admitted, is a judgment and order dated 28.6.2002 by which the learned Tribunal dismissed an appeal preferred by the assessee challenging the order dated 30.10.1998 of the Deputy Commissioner of Income Tax passed in a block assessment for the period between 1.4.1986 to 20.9.1996. The question, which the learned Advocate for the appellant has pressed before us, is Question No.(iii) which reads as follows: - " (iii) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in having upheld the treatment of cash deposits of Rs.2,01,000/ - in Canara Bank during assessment year 1987 -88 as unexplained cash credit by invoking provisions of section 69 of the I.T. Act, 1961, inasmuch as the source of such deposits were duly considered in the final account of the assessee -
(2.) LEARNED Advocate for the appellant has filed a written notes of submission. He relied on paragraphs 2, 3 and 4 at page -2 of his written notes, which read as follows: "In this case the block assessment order shows lack of required enquiry as to the sources of deposits even when most of the deposits of salary are in the bank accounts like in the case of account with PNB, New Delhi and Dena Bank, New Delhi, represented by clearing cheques deposited for which necessary enquiry was possible with the Bank where deposits were found and the Banks from which the amount were debited for credit to the assessee's account. Such enquiry was not even attempted. The conclusions are mostly on the basis of A.O.'s statement that assessee was not able to explain. Such conclusion can indicate either absence of explanation or explanation given verified to be not tenable. However, such conclusion has to be based on result of specific post such enquiry and assessee's explanation with regard to result of such enquiry. Therefore, here also, the block assessment order failed to rise to the requirement of a speaking order based on result of post of such enquiry and assessee's statement on results of enquiry put across to the assessee. The grounds of appeal before Tribunal clearly shows assessee's grievance on lack of specific post such enquiry to verify assessee's explanation. Assessing Officer is not supposed to sit idle even in the face of a return which is apparently in order but calls for further enquiry as he is not only an adjudicating authority but an investigating authority as well. In this respect, an Assessing Officer is different from a Civil Court as held in the decision of Re: Gee Vce Enterprises Vs - Addl. CIT (New Dehli), 1975 99 ITR 375. Lack of necessary enquiry makes an assessment order erroneous as held by the Hon'ble Supreme Court of India in Re: Malabar Industrial Corporation (2000) 243 ITK 83 (SC)".
(3.) THE learned Tribunal in paragraph -16 of the impugned judgment, held as follows: - "16. The question before us is, as to whether the action of the A.O. to treat the deposits aggregating to a sum of Rs.2,01,000/ - as the income of the assessee from undisclosed sources is justified. In order to consider as to whether the addition of Rs.2,01,000/ - is in accordance with the provisions relating to the block assessment, it would be necessary to consider as to which addition is based on the material found during the course of search. If the addition is based on some material found in the course of search, then the second question that arises for consideration is as to whether the provisions of Sec.69 are attracted in the case of block assessments and finally it is to be considered as to whether the assessee had satisfactorily explained the source of the deposits in the bank account and not whether the addition was justified in block assessment. In this case, the existence of Savings Bank Account No. 4790 with Canara Bank was detected as a result of search and the assessee had owned the said account. Therefore, the foundation for assessment of Rs.2,01,000/ - is the material found in the course of the search." During the search and seizure, it is thus evident that the Savings Bank Account No. 4790 maintained with Canara Bank was detected. It was also found that a sum of Rs.2,01,000/ - had been deposited in the aforesaid bank account. It was not disputed by Mr. Sen that a sum of Rs.2,00,000/ - was deposited on 7.4.1986 and the balance sum of Rs.1000/ - was deposited on 21.1.1987. This is also reflected in paragraph -15 of the impugned judgment. The deposit was admittedly made during the financial year 1986 -87 corresponding to assessment year 1987 -88.;