Madhya Pradesh High Court
Commissioner Of Income-Tax vs Dulichand Bhatia on 10 August, 1988
Equivalent citations: [1989]175ITR634(MP)
JUDGMENT
G.G. Sohani, Actg. C.J.
1. By this reference under Section 256(1) of the Income-tax Act, 1961 (hereinafter referred to as "the Act"), the Income-tax Appellate Tribunal, Indore Bench, Indore, has referred the following question of law to this court for its opinion :
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Commissioner of Income-tax had no jurisdiction to revise under Section 263 of the Income-tax Act, 1961, an assessment order passed by the Income-tax Officer in accordance with the directions issued to him by the Inspecting Assistant Commissioner of Income-tax under Section 144B of the Income-tax Act, 1961 ?"
2. The material facts giving rise to this reference, briefly, are as follows :
While framing the assessment of the assessee for the assessment year 1978-79 for which the assessee had filed a return disclosing an income of Rs. 1,71,060, the Income-tax Officer proposed to make an addition exceeding Rs. 1,00,000. The Income-tax Officer, therefore, made a reference to the Inspecting Assistant Commissioner under Section 144B of the Act proposing an addition of Rs. 3,50,000 on account of possession of high denomination notes by the assessee. The Inspecting Assistant Commissioner, however, directed the Income-tax Officer to delete the proposed addition. In compliance with the directions given by the Inspecting Assistant Commissioner, the Income-tax Officer completed the assessment. Thereafter, the Commissioner of Income-tax initiated proceedings under Section 263 of the Act and after hearing the assessee, the Commissioner came to the conclusion that the order of assessment passed by the Income-tax Officer was erroneous and prejudicial to the interests of the Revenue as proper enquiries were not made by the Income-tax Officer with regard to possession by the assessee of high denomination notes valued at Rs. 3,50,000. The Commissioner, therefore, set aside the order of assessment passed by the Income-tax Officer and directed the Income-tax Officer to make a fresh assessment. Aggrieved by the order passed by the Commissioner, the assessee preferred an appeal before the Tribunal. The Tribunal held that in passing the order of assessment, the Income-tax Officer had complied with the directions of the Inspecting Assistant Commissioner and hence the order passed by the Income-tax Officer was not amenable to the jurisdiction of the Commissioner under Section 263 of the Act. Aggrieved by the order passed by the Tribunal, the Revenue sought reference and it is at the instance of the Revenue that the aforesaid question of law has been referred to this court for its opinion.
3. The question which has been referred by the Tribunal in the instant case is also the subject-matter of reference in M.C.C. No. 38 of 1986 (CIT v. Vithal Textiles [1989] 175 ITR 629 (MP)). By our order passed today in that case, we have held that the Tribunal was not right in holding that the Commissioner ,pf Income-tax has no jurisdiction to revise under Section 263 of the Act, an order of assessment passed by the Income-tax Officer in accordance with the directions issued to him by the Inspecting Assistant Commissioner under" Section 144B of the Act. We see no reason to take a view different from that taken by us in M.C.C. No. 38 of 1986 --[1989] 175 ITR 629 (MP).
4. For all these reasons, our answer to the question referred to this court is in the negative and in favour of the Revenue. In the circumstances of the case, parties shall bear their own costs of this reference.