Patna High Court
Commissioner Of Income-Tax vs Smt. Kaushalaya Devi on 7 March, 1988
JUDGMENT
1. These two references relate to the assessment years 1972-73 and 1973-74. Two questions have been referred to this court by the Income-tax Appellate Tribunal, Patna. They are as follows :
" 1. Whether, on the facts and in the circumstances of the case, the Tribunal has rightly held that the Commissioner of Income-tax, acting under Section 263(1) of the Income-tax Act, 1961, could not interfere with an order of assessment made under Section 143(1) in pursuance of the scheme to help the new taxpayers in small income groups launched by the Government ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal had rightly cancelled the order passed by the Commissioner of Income-tax under Section 263(1) of the Income-tax Act, 1961, for the assessment years 1972-73 and 1973-74 ? "
2. The facts, in brief, are that the assessee was assessed by the Income-tax Officer, Motihari, in terms of a scheme set out by the Central Government. According to the Revenue, the scheme was not applicable to ladies and minors where the returned income did not exceed Rs. 15,000 and the capital invested did not exceed Rs. 25,000. The Income-tax Officer being of the view that the scheme applied to the assessee, assessed her in terms of Section 143(1) of the Income-tax Act, 1961. The Commissioner of Income-tax, being of the view that the scheme had been wrongly applied to several assessees like the present assessee, set aside the orders of assessment in exercise of powers under Section 263(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act").
3. The assessee, being aggrieved by the order of the Commissioner, appealed to the Appellate Tribunal. The Tribunal held that the Commissioner of Income-tax under Section 263(1) of the Act could not interfere with an order of assessment made under Section 143(3) of the Act in pursuance of the scheme to help new taxpayers in small income groups launched by the Government. The assessment of the assessee was thus upheld and the order of the Commissioner was set aside. Similar orders were passed by the Tribunal in the cases of several ladies. One such assessee was Rambha Devi. The Revenue, being aggrieved by the order of the Tribunal, prayed for a reference to this court and the Tribunal referred the matter in terms of Section 256(1) of the Act. In that reference, questions Nos. (1) and (4) were as follows:
" (1) Whether, on the facts and in the circumstances of the case, the Tribunal has rightly held that the assessment orders, having been passed by the Income-tax Officer after necessary enquires in pursuance of the ' scheme to help the new taxpayers in the small income groups' launched by the Government, were not erroneous as to enable the Commissioner of Income-tax to assume jurisdiction under Section 263(1) of the Income-tax Act, 1961 ?
(2) Whether, in view of the decision of the Income-tax Appellate Tribunal, Patna, in the case of Smt. Rambha Devi v. 1TO (ITA Nos. 1713 to 1715 of 1974-75), the Tribunal has rightly held that the Commissioner of Income-tax acting under Section 263(1) of the Income-tax Act, 1961, could not legally set aside an order of assessment made under Section 143(1) in pursuance of the ' scheme to help the new taxpayers in the small income group ' evolved by the Government ? "
4. The two questions really meant whether the Commissioner, in exercise of his powers under Section 263(1), could set aside the assessment of the assessee. Identical questions have been referred to us in this reference. In the case of CIT v. Rambha Devi [1987] 164 ITR 658 (Pat), a Bench of this court held that the Tribunal was not right in cancelling the order passed by the Commissioner of Income-tax under Section 263(1) of the Act. Since the facts are identical to that of the case of CIT v. Rambha Devi [1987] 164 ITR 658 (Pat), the first question in this reference must be answered in identical terms. It is, therefore, held in this reference that the Tribunal was not right in holding that the Commissioner of Income-tax acting under Section 263(1) of the Act could not interfere with the order of the Income-tax Officer under Section 143(1). The first question, therefore, is answered in favour of the Revenue and against the assessee.
5. The second question is ancillary to the first one. Since the first question has been answered in favour of the Revenue and against the assessee, the second question also must be answered in favour of the Revenue and against the assessee. We, therefore, hold, on the second question as well, that the Tribunal was not right in cancelling the order passed by the Commissioner.
6. The references to this court are answered accordingly. We shall, however, make no order as to costs.
7. Let a copy of this judgment be transmitted to the Assistant Registrar, Income-tax Appellate Tribunal, Patna, in terms of Section 260 of the Act.