Calcutta High Court
Plastic Concern vs Assistant Commissioner Of Income Tax. on 10 June, 1997
Equivalent citations: (1998)61TTJ(CAL)87
ORDER
--Assessment based on administrative direction of Commissioner Ratio:
As the assessing officer had merely followed the administrative direction of the revisional authority prior to passing of the assessment order and if there was any error in his order, in the given set of facts, it was the error of judgment on the part of the revisional authority himself and not that of the assessing officer, and also the assessing officer had caused certain enquiries, therefore, the Commissioner ought not to have exercised revisional jurisdiction to set aside the assessment order.
Held:
Admittedly, the assessing officer has discussed the issue with the Deputy Commissioner as well as the Commissioner to passing of the assessment order. The assessing officer has also recorded, in his confidential note, that the Commissioner of consented on the issue of passing the assessment order for the time being, subject to making further enquiry at a later period. In the instant case, the assessing officer has merely followed the administrative direction of the revisional authority and if there is any error in the judgment, in the given set of facts, it is the error of the judgment of the revisional authority himself and not that of the assessing officer, Thus, the Commissioner ought not to have exercised revisional jurisdiction to set asides the assessment order.
The information gathered by the assessing officer from the two parties and the explanation of the assessee in support of the `Note' in the balance sheet, do not contain any such material, even remotely, to suspect that the liability shown by the assessee in its books is sham or fictitious. Under such circumstances, it is, in the normal course, not necessary for an assessing officer to cause further enquiry. Hence, the assessment order cannot be considered as erroneous and the action of the Commissioner in that regard is nothing but another opinion on the same issue.
It is trite law that revisional authority cannot adopt his opinion to that of the assessing officer by holding that the assessing officer ought to have caused further enquiries especially when the opinion formed by the assessing officer is not prima facie wrong. In the instant case, the Commissioner has also not gathered any further information to show that the apparent is not real in the impugned transactions.
It is trite law that the Commissioner, before passing an order under section 263, should give a reasonable opportunity of being heard to the assessee and also inform what is the basis on which the Commissioner seeks the revision of the order . In the instant case, the finding that the assessee had no previous experience in the job work was never put to the assessee and hence the same cannot be the basis for passing an order under section 263 of the Act. Even otherwise, mere lack of previous experience for the job work cannot be the basis for revision in the absence of any material to prove that there was collusion between the aforesaid parties and the assessee and on that basis the assessment cannot be considered as erroneous.
Application:
Also to current assessment years.
Income Tax Act 1961 s.263 ORDER D. MANMOHAN, J.M. :
This appeal is directed against the revisional order passed by the CIT under s. 263 of the IT Act, 1961.
2. For the asst. yr. 1993-94, assessee filed return of income on 30th March, 1994. Along with the return, copies of tax audit report, manufacturing and trading account and balance sheet were also filed. In the balance sheet, vide Notes on accounts, the assessee clarified as under :
"Purchase of plastic powder include 555.90 M.T. received from outsiders for processing on job basis, which have been used in home consumption during the year. Accordingly, there is a liability of Rs. 2,08,46,250 for uncompleted contracts."
The Note was meant to explain the liability shown in the balancesheet and also the purchase shown in the manufacturing and trading account. However, when the time for completion of assessment was due to expire, AO proceeded to verify the correctness of the statement made in the Note annexed to the return and in this regard on 15th March, 1996, he then issued a notice under s. 133(6) of the IT Act, 1961, to RSI Ltd. and ESTC India Ltd. who have supplied the total quantity of 555.90 M.T. of plastic powder to the assessee. On 20th March, 1996, the assessee received replies from the aforesaid parties which were broadly in conformity with the Note provided in the balance sheet of the assessee. In the replies given by the aforesaid two parties, they have confirmed having supplied the specified quantity of HDPE powder to Plastic Concern for processing on their behalf and further stated that since the material was given for processing, it was not treated as sale. Upon receiving the replies from the aforesaid parties, AO issued a show-cause notice dt. 20th March, 1996 to the assessee calling for the following information :
(1) Original bill showing purchase of materials of 555.90 M.T. (2) Original sale bill showing sale of finished products processed but of that raw materials.
(3) Processing charges received from the above-named two creditors, and (4) To produce the production register.
Assessee promptly replied by letter dt. 22nd March, 1996, furnishing the information as desired by the AO. Sub-para (1) of para 1 to the aforesaid letter is reproduced here for the sake of clarity :
"1. As already explained in the course of the assessment proceedings under s. 143(3), vide our earlier submissions, we have received plastic powder weighing 501.90 M.T. from RSI Ltd. and 54 M.T. from ESTC Ltd. for processing on their behalf. It may kindly be noted that we have not purchased the above-mentioned goods from the said parties. However, since the said goods were used by us, in our own consumption and finished product thereof were sold by us, it was necessary to provide for the value of such goods consumed by us as our cost of production for the above quantity of plastic powder used in the manufacturing of the goods sold by us."
It was explained in sub-para (c) thereof as under :
"And that according to mercantile system of accounting, as followed by the assessee firm, it was necessary to provide for the value of goods consumed by it to arrive at the true profit and loss since the sale proceeds of the production out of the said consumption has already been credited and accounted for in the books of account of the assessee firm and as such we beg to submit that there has been no irregularity in determining and providing for the value of such goods in the books of the assessee in the year of consumption."
Thus, it could be seen that the information given by the assessee in the balance sheet annexed to the return and subsequent explanation and the replies given by the two parties are not contradictory to each other, inasmuch as, it is the claim of the assessee that the goods supplied to the assessee for processing were utilised by it and so though the goods were received by the assessee otherwise that by the mode of purchase, the liability towards the materials supplied had to be shown by the assessee and the suppliers have rightly not treated the transactions as sale as their initial intention was only to get them processed on their behalf. With the information available on record, AO would not have made an addition by treating the liability as not genuine and thus he was left with no other alternative except to accept the version of the assessee and complete the assessment accordingly.
3. As the matter stood thus, on 24th July, 1996, the CIT, WB-VIII, Calcutta issued a notice under s. 263 of the Act directing the assessee to show cause as to why the assessment order should not be treated as erroneous in so far as it is prejudicial to the interests of the Revenue on the ground that the AO failed to make further investigation with regard to the claim of liability for purchases amounting to Rs. 2,08,46,250. Assessee replied on 17th August, 1996, wherein it is stated that the aforesaid aspect was fully investigated by the AO in the course of hearing which is evident from the information obtained by the AO from the two parties by issuing notice under s. 133(6) of the Act and also by the reply given by the assessee. It was further submitted that the evidence gathered by the AO could be considered as sufficient enquiry before framing an assessment order and there is no error in the order of the AO. A letter dt. 30th March, 1993 addressed by the assessee to RSI Ltd. was also enclosed to the reply which contains the facts that the assessee informed RSI Ltd. of the consumption of the materials supplied by them. It was also stated that when compared to the price of the goods purchased from the Department of Customs, Govt. of India, the liability actually provided by the assessee against the raw materials supplied by the aforesaid two parties is much less and, therefore, from no angle, the order of assessment could be considered as prejudicial to the interest of Revenue as there was no discrepancy in the purchase price noted. Reply to the revisional authority is also on the issue that the assessee having followed mercantile system of accounting, raw materials consumed by the assessee should be shown as purchase and the liability against the purchase price has to be necessarily shown in order to arrive at the correct profit as otherwise, the sale value of finished products emerging out of the impugned raw materials consumed would show a distorted profit figure and the correct picture of the profit will not emerge without showing the corresponding liability for the said purchase.
4. Not impressed by the explanation of the assessee, the revisional authority proceeded by passing an order under s. 263 of the Act, wherein he observed that from the material gathered it shows that both RSI Ltd. and ESTC India Ltd. had given 501.9 M.T. and 54 M.T. of HDPE material respectively for processing on their behalf and the transactions were not shown in their books whereas, the assessee has shown the liability towards purchase price and the AO who was required to make full enquiry regarding the genuineness of the said transactions, and the liability of the purchase consideration, had failed to make such enquiries resulting in the order of assessment erroneous in sofar as it was prejudicial to the interest of Revenue. The CIT further observed that Plastic concern does not have a past history of doing job (work) and so it is not understood as to for what purpose the assessee accepted materials for processing, if any, for its own consumption. It is also the case of the CIT that the AO ought to have enquired as to whether it is a collusive transaction. In the opinion of the CIT, the fact that in spite of assessee not doing any job work in the past, it accepted materials for processing and this would have been the reason enough for the AO to make further enquiries. He further observed that it is very strange that RSI Ltd. supplied such huge materials to Plastic Concern without enquiry whether the said concern had any previous experience in the manufacture of the same goods and the entire transactions lead one suspect that the apparent is not real. For all the aforesaid reasons, CIT was of the opinion that this is a fit case where adequate enquiry ought to have been made by the AO and the failure to make such enquiry makes the assessment order erroneous in so far as it is prejudicial to the interest of the Revenue. He thus set aside the order of the AO with a direction to reframe the assessment after considering all the aspects of the case.
5. Aggrieved by the order of the CIT, assessee is in appeal before us. The learned counsel fairly reiterated the submissions made by him before the revisional authority. The main plunk of the submission of the assessee is that the AO has made reasonable enquiries and the information gathered by the AO having matched with the note given by the assessee in its accounts, the AO was justified in completing the assessment without making any addition in that regard and the CIT cannot substitute his opinion to that of the AO in coming to the conclusion that the AO has not conducted proper enquiries. He further submitted that even during the course of the revisional proceedings, there is no evidence to remotely suspect that the transactions are bogus and thus submitted that there is no error in the order of the AO so as to invoke the jurisdiction under s. 263 of the Act. He has also relied upon the order of the Tribunal, Calcutta Bench in ITA No. 1164(Cal) of 1996, dt. 29th November, 1996 in support of his contention that the powers of CIT are not unchartered and when the AO has exercised his mind over the issue, the same cannot be considered as erroneous merely on the ground that in the opinion of the CIT, further enquiries may bring further light on the issue.
6. On the other hand, learned Departmental Representative submitted that a formal enquiry by the AO is not sufficient to make an assessment and the AO should act as an Investigator in the proceedings and if sufficient and adequate enquiries were not made by him, CIT can exercise the revisional power to set right such irregularities. Learned Departmental Representative filed before us the Confidential Note of the AO to submit that the AO himself had admitted that complete enquiries were not made in this regard and on the strength of that document, learned Departmental Representative submitted that improper enquiries or incomplete enquiries make the assessment order erroneous and prejudicial to the interests of the Revenue. He relied upon the following decisions in support of his contention that non-enquiry on the part of the AO would render the assessment order erroneous.
(a) Gee Vee Enterprises vs. Addl. CIT (1975) 99 ITR 375 (Del);
(b) Thalibai F. Jain vs. ITO (1975) 101 ITR 1 (Kar);
(c) CIT vs. Active Traders (P) Ltd. (1995) 214 ITR 583 (Cal);
(d) K. A. Ramaswamy Chettiar vs. CIT (1996) 220 ITR 657 (Mad), and
(e) CIT vs. V. P. Agarwal (1993) 68 Taxman 236 (All).
Learned Departmental Representative also submitted that the CIT is entitled to gather material subsequent to the completion of the assessment and on such material if he forms an opinion that the order passed by the AO is erroneous, the CIT would be justified in revising the assessment order. He thus strongly supported the order of the CIT.
7. Joining the issue, the learned counsel for the assessee submits that the Note of the AO was never put to the assessee by the revisional authority and the alleged information gathered was also not disclosed to the assessee and so the revisional order cannot be passed on such material which is never put to the assessee. He has relied upon the following decisions in support of his aforesaid contention :
(a) Kalra Glue Factory vs. Sales Tax Tribunal (1987) 167 ITR 498 (SC);
(b) R. B. Shreeram Durga Prasad & Fatechand Narsingadas vs. Settlement Commission (1989) 176 ITR 169 (SC) and
(c) Kishanchand Chellaram vs. CIT (1980) 125 ITR 713 (SC).
The learned counsel also submitted that at no stage the confidential note of the AO was put to the assessee and, at any rate, CIT is not justified in revising the assessment order, inasmuch as, it amounts to extending the limitation for making assessment which the CIT is not empowered to.
8. We have carefully considered the rival submissions and perused the record. Broadly two issues emerge from the aforementioned facts : (a) whether the AO, having obtained statements from two parties, i.e., RSI Ltd. and STC India Ltd. under s. 133(6) of the Act, is justified in completing the assessment without making any addition in that regard and whether the issue required further investigation by the AO and also whether the assessment order is erroneous in the absence of such enquiry; and (b) whether the CIT, by taking cognizance of the confidential-note of the AO, can set aside the assessment to facilitate the AO to avail some more time for making further enquiries.
9. We wish to take up second issue first. From the assessment order, we find that the return was filed on 30th March, 1994, and the AO had two years of time left with him for making proper enquiries. However, few days before the expiry of the limitation period, the AO seems to have commenced enquiries and the primary enquiry made by him clearly shows that the version of the assessee is correct. On the basis of the material that was available at that point of time, the AO was left with no other alternative except to complete the assessment sans any addition on that account. However, as could be seen from the confidential-note, of the AO, the AO chose to approve the Dy. CIT, who was monitoring the case and, in turn, also sought administrative instruction from the CIT, and by taking the guidance, he completed the assessment probably with an understanding that the CIT would reopen the assessment by issuing notice under s. 263 of the Act by which the AO would get another two years period and make further enquiries as regards the transactions with the aforesaid two parties. The confidential note reads as under :
"Confidential-note :- (1) Examination of the veracity of the assessees reply to show-cause notice dt. 20th March, 1996 vis-a-vis proposed disallowance of the liabilities created in the books of account of goods stated as received for processing from RSI Ltd. and ESTC Ltd. and included in the purchase account has not been possible for paucity of time.
On the authorities favour I had opportunity to discuss the issue with the Dy. CIT, Range-13, Calcutta as well as CIT, West Bengal-VIII, Calcutta in presence of Dy. CIT, Range-13, Calcutta, prior to passing of the assessment order. Learned CIT, WB-VIII, Calcutta. Observed that proper enquiries by examining the books of account of RSI Ltd. and ESTC Ltd. for ascertaining the true state of affairs regarding transactions with these parties have not been made in this case and further enquiries should be made (after the passing of the order) in this regard and remedial action under s. 263 may be taken, if necessary.
Accordingly examination on this issue need be taken up in the course of assessment proceedings for the immediately succeeding scrutiny assessment. Dy. CIT, Special Range-6 has also been requested to make enquiry in the matter in the case of his assessee. A proper remedial action for asst. yr. 1993-94 will be taken after completion of enquiries, if found necessary.
(2) In furtherance on the administrative direction, the case was discussed with Dy. CIT, Range-13, Calcutta quantum of addition having exceeded Rs. 2 lakhs.
(3) Copy of the assessment order is sent for information to CIT, WB-VIII, Calcutta, with reference to guidance provided in this case through Dy. CIT, Range 13, Calcutta."
10. From a reading of the aforesaid confidential-note, it could be seen that the revisional authority has looked into the facts of the case and also the material available on record in coming to the conclusion that no addition could be made at that juncture on the basis of the available material and thus gave a consent to the AO to proceed to make assessment accordingly, subject to taking proper remedial action, if necessary, after making enquiry subsequent to the completion of assessment of revisional authority in his administrative capacity, is duty bound to supervise the work of the officers in his charge. He is responsible to see that all scrutiny assessments are taken up in time and assessments are completed well in time. It may be apt to extract the observation of the Honble High Court of Andhra Pradesh in the case of Berulal Tiwari vs. CIT (1988) 173 ITR 280 (AP) :
"We would express our disapproval of the way in which ITO drag on the assessment proceedings till almost the last minute and rush through the entire process of assessment when the limitation was about to set in without giving adequate opportunities to the assessee. The CIT, exercising administrative jurisdiction over these officers should keep close watch on the proceedings and should discourage any attempt on the part of the tax officers in dragging on the assessment proceedings till the last minute causing difficulties both to the assessee and to the Department.
11. In the instant case, the revisional authority, instead of discouraging such practice of completing a last minute assessment, in our opinion, is encouraging the officers by giving an assurance that remedial action under s. 263 will be taken, if necessary, and by initiating proceedings under s. 263 to give the AO further time to complete the assessment would not only amount to encouraging the AO but also impliedly amounts to circumventing the law by the revisional authority. The legislature, in its directive, set out the outer limit for both the assessee as well as the Revenue, and such act, such as completion of assessment, reassessment, revision, etc. is subject to the limitation of time beyond which no proceedings can be taken up.
12. In the case of Parashuram Pottery Works Co. Ltd. vs. ITO (1977) 106 ITR 1 (SC), at p. 10, their Lordships of the apex Court, while considering the question of limitation vis-a-vis reassessment proceedings, observed as under :
"It has been said that the taxes are the price that we pay for civilisation. If so, it is essential that those who are entrusted with the task of calculating and realising that price should familiarise themselves with the relevant provisions and become well-versed with the law on the subject. Any remissness on their part can only be at the cost of the national exchequer and must necessarily result in loss of revenue. At the same time, we have to bear in mind that the policy of law is that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity."
In our opinion, the spirit of the observations of the Honble Supreme Court equally applies to the instant case in view of the very peculiar facts obtained herein. If the AO is laxing in his duty, either on his own or because of ineffective supervision by the Dy. CIT or CIT and takes up scrutiny assessment for further enquiry at the fag end of the limitation period, the revenue loss, if any, is inevitable. It is the true law that the limitation period under s. 153 of the Act cannot be extended by a supervisory authority and it is also quite recognised principle of law that an act, which cannot be done by an authority directly, cannot be done indirectly by him.
13. In the instant case, in our opinion, the CIT has proceeded on the aforesaid line by setting aside the order of the AO so as to give him further two years time to complete the assessment at leisure. In our opinion, the jurisdiction of the CIT is not unchartered and cannot be extended to whereby the AO, who cannot make further enquiries for want of time, is allowed to have an extended time for that purpose though the limitation period for completing the assessment is 2 years.
14. In the case of N. Nagantha Iyer vs. CIT (1966) 60 ITR 647 (Mad), the Honble Madras High Court observed that when an AO has no jurisdiction over a particular issue, the appellate authority cannot confer such a jurisdiction by giving a direction to effect. Similarly, in the case of Pathikonda Balasuba Setty (decd.) vs. CIT (1967) 65 ITR 252 (Mys) at p. 259, Their Lordships of the Mysore High Court while considering the powers of the Tribunal vis-a-vis setting aside the order of the tax authorities, observed as under :
"The reason behind this is the well-established principle that an authority which does not have a certain power cannot exercise such power indirectly through the instrumentality of another authority exercising a wider power."
In the aforesaid case, the case of the assessee was that after setting aside of the entire order, AO was empowered to enhance an addition and since the Tribunal had no powers of enhancement, the same cannot be done indirectly. Similar view was taken by the Honble Madras High Court in the case of V. Ramaswamy Iyengar & Anr. vs. CIT (1960) 40 ITR 377 (Mad).
15. The aforesaid decision applies to the facts of the instant case. The CIT, being the creature of the statute, is not vested with any power to extend the period of limitation for completing the assessment. Prior to making the assessment, the fact that enquiries made by the AO would not give room for making an addition, was brought to the notice and even if the CIT happens to be an AO at that juncture, he could not improve the situation except completing the assessment without making any addition in that regard due to lack of time. In such an event of the matter, invoking of provisions under s. 263 would amount to extending the period of limitation for the AO to complete the assessment after further enquiries. This extension of period of limitation, in our opinion, is not within the powers vested with the revisional authority.
16. In the case of Venkakrishna Rice Co. vs. CIT (1987) 163 ITR 129 (Mad), their Lordships have observed that the jurisdiction of the CIT under s. 263 is intended for interference in special cases and it is not to be invoked merely to set aside favourable orders and to bring to tax some more money to the treasury. Their Lordships further observed that the power is to be invoked not as a jurisdictional corrective or as a review of a subordinates order in exercise of the supervisory power. Their Lordships opined that it has to be invoked and employed only for the purpose of setting right distortions and prejudices to the Revenue which is a unique conception which has to be understood in the context of and in the interest of revenue administration. In the opinion of the Honble Court, the revisional power cannot be regarded as approaching in anyway the appellate jurisdiction or even the ordinary revisional jurisdiction conferred on the CIT under s. 264 of the Act. Thus, in our opinion, the order of the CIT has no legs to stand in the light of the facts narrated above.
17. The matter can also be looked into from another angle.
Admittedly, the AO has discussed the issue with the Dy. CIT as well as the CIT prior to passing of the assessment order. The AO has also recorded, in his confidential note, that the CIT has consented on the issue of passing the assessment order for the time being, subject to making further enquiry at a later period. Thus, the fact remains that the CIT has gone into the details and the material available on record and was convinced that before the last date, i.e., the limitation period, it is not possible to make further enquiry and thus gave his consent for completing the assessment on the basis of the material on record. Since the CIT having found that the addition cannot be made with the available material, he cannot now change his opinion, in his capacity as revisional authority, and hold that the order of the AO is erroneous. In the instant case, the AO has merely followed the administrative direction of the revisional authority and if there is any error in the judgment, in the given set of facts, it is the error of the judgment of the revisional authority and if there is any error in the judgment, in the given set of facts, it is the error of the judgment of revisional authority himself and not that of the AO. Thus, in our opinion, the CIT ought not to have exercised revisional jurisdiction to set aside the assessment order.
18. Coming to the first issue i.e. whether there is any error in the order of the AO, we are of the opinion that there is no error in the order passed by the AO in the facts and circumstances of the case. Admittedly, the AO caused certain enquiries. Apparently, there is no contradiction between the version put forward by the two parties and the Note provided by the assessee in the balance sheet. The so-called difference between the assessees version and the version of the two parties was, in fact, a factor supporting the stand of the assessee rather contradicting it, inasmuch as, the aforesaid parties have stated to have given the goods to the assessee for processing and in such an event, it is not expected of them to show in their books, that the goods are sold to the assessee.
Similarly, when the assessee used the goods so received, for home consumption, a person following mercantile system of accounting, ought to have shown the liability towards the cost of materials consumed and that is what was precisely done by the assessee herein. With the information gathered by the AO, coupled with the assessees detailed explanation, it may not be necessary for a quasi-judicial authority, such as AO herein, to opt for making further enquiries merely because there is a remote possibility of collecting some more information at a later point which might throw some further light on the issue. But mere possibility of gathering more material to prove the claim of the assessee wrong, may not automatically make the assessment proceedings erroneous as long as AO acted judiciously on the basis of the information available on record. One has to look to the facts as they stand at the time of completion of the assessment order at best the facts available at the time of initiating revisional proceedings to prove as to whether the assessment order is erroneous and whether he ought to have made further investigation in that regard. Applying the test in the instant case, the AO having caused reasonable enquiries, in the absence of any other basic material to prove the action of the AO wrong, in our opinion, the assessment order cannot be termed as erroneous. As explained in the preceding paragraphs, the information gathered by the AO from the two parties and the explanation of the assessee in support of the Note in the balancesheet, do not contain any such material, even remotely, to suspect that the liability shown by the assessee in its books is sham or fictitious. Under such circumstances, it is, in the normal course, not necessary for an AO to cause further enquiry. Hence, the assessment order cannot be considered erroneous and the action of the CIT in that regard is nothing but another opinion on the same issue. It is trite law that revisional authority cannot adopt his opinion to that of the AO by holding that the AO ought to have caused further enquiries especially when the opinion formed by the AO is not prima facie wrong. In the instant case, the CIT has also not gathered any further information to show that the apparent is not real in the impugned transactions. As could be seen from the order passed under s. 263, the enquiries revealed that the assessee does not have the past history of doing job work. The CIT seems to have heavily obsessed on this issue while making the observation that it is strange that the parties have supplied such a huge material to Plastic Concern without making enquiry whether the said concern has any previous experience in the manufacture of goods. A reading of the revisional order shows that this is the basic material upon which the CIT formed his opinion that the AOs order is erroneous, inasmuch as, he failed to further investigate on that issue. The notice issued under s. 263 is totally silent on this issue and the assessee had no opportunity to put forward his explanation on the aforesaid basic material. It is trite law that the CIT, before passing order under s. 263, should give a reasonable opportunity of being heard to the assessee and also inform what is the basis on which the CIT seeks the revision of the order. In the instant case, the finding that the assessee had no previous experience in the job work was never put to the assessee and hence the same cannot be the basis for passing an order under s. 263 of the Act. Even otherwise, we are of the opinion that mere lack of previous experience for the job work cannot be the basis for scrutiny in the absence of any material to prove that there was collusion between the aforesaid parties and the assessee and on that basis the assessment cannot be considered as erroneous.
19. The case law cited by the learned Departmental Representative are distinguishable on facts. The facts in the instant case are peculiar and need no repetition. We, therefore, hold that the order passed by the CIT under s. 263 is not in accordance with law. We quash the impugned order passed by the CIT and allow the appeal filed by the assessee accordingly.