- (1.) THE following question of law has been referred for the opinion of this Court by the Tribunal, Delhi Bench "C", Delhi, "Whether, on the facts and in the circumstances of the case, the Tribunal is right in law in annulling the assessment made by the ITO -
(2.) ON the ground that income had escaped assessment on account of the assessee having entered lesser closing stock. This view was upheld by the CIT(A). The Tribunal, however, accepted the appeal of the assessee on the ground that the AO failed to record reasons for initiating proceedings for reassessment. It was held that since reasons were not available on the file, it could not be ascertained whether reopening of the assessment was on account of reconsideration of the same material or in consequence of some information in its possession. Recording of reasons is a condition precedent to invoke jurisdiction under s. 147/148 of the IT Act, 1961. Reliance was placed on a judgment of the Hon'ble Supreme Court in Kalyanji Mavji & Co. vs. CIT 1976 CTR (SC) 85 : (1976) 102 ITR 287 (SC).
(3.) WE have heard learned counsel for the Revenue and perused the record. We are of the view that the decision taken by the Tribunal is in accordance with the law laid down by the Hon'ble Supreme Court and this Court. The Tribunal has followed the judgment of the Hon'ble Supreme Court in Kalyanji Mavji & Co. (supra). The same view has also been taken by the Hon'ble Supreme Court, inter alia, in Calcutta Discount Co. Ltd. vs. ITO (1961) 41 ITR 191 (SC), Ganga Saran & Sons (P) Ltd. vs. ITO (1981) 22 CTR (SC) 112 : (1981) 130 ITR 1 (SC) and Phool Chand Bajrang Lal vs. ITO (1993) 113 CTR (SC) 436 : (1993) 203 ITR 456 (SC).;