9911796707
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Issues Involved:
1. Delay in filing the appeals. 2. Validity of the assessment orders for the years 1989-90 and 1990-91. 3. Commissioner's assumption of jurisdiction under section 263 of the Income-tax Act. 4. Non-initiation of penalty proceedings under section 271(1)(c) by the Assessing Officer. Issue-wise Detailed Analysis: 1. Delay in Filing the Appeals: The assessee's appeals were delayed by one day due to a calculation mistake and a delay by Angadia. The learned departmental representative had no objection to condoning the delay. Consequently, the tribunal proceeded to decide the appeals on merit. 2. Validity of the Assessment Orders for the Years 1989-90 and 1990-91: The business premises of the assessee were surveyed under section 133A of the Income-tax Act, revealing discrepancies for the assessment year 1991-92. The Assessing Officer used these findings to make agreed additions of Rs. 1,00,000 for 1989-90 and Rs. 2,35,000 for 1990-91, along with an additional Rs. 25,000 for each year. The assessments were completed without initiating penalty proceedings under section 271(1)(c). 3. Commissioner's Assumption of Jurisdiction under Section 263: The Commissioner issued a show-cause notice, stating that the Assessing Officer's order was erroneous and prejudicial to the interest of revenue due to unverified credit balances and non-initiation of penalty proceedings. The assessee contended that the documents found during the survey related to 1991-92 and not the years under appeal. The Commissioner, unsatisfied with the assessee's reply, set aside the assessments, directing the Assessing Officer to make them in accordance with the law. The tribunal found that the Assessing Officer had conducted proper investigations and completed the assessments after due enquiry. The Commissioner had not pointed out any specific errors in the assessment orders for 1989-90 and 1990-91, but was influenced by documents from 1991-92. The tribunal held that the Assessing Officer's decision not to initiate penalty proceedings was a conscious act and that the assessments were not erroneous or prejudicial to the revenue. 4. Non-initiation of Penalty Proceedings under Section 271(1)(c): The Commissioner assumed jurisdiction under section 263 partly because the Assessing Officer did not initiate penalty proceedings. The tribunal noted that penalty proceedings are independent and separate from assessment proceedings. It cited the Delhi High Court's decision in J. K. D'Costa, which held that the failure to initiate penalty proceedings does not render an assessment order erroneous or prejudicial to the interest of revenue. The tribunal concluded that the Commissioner could not direct the Assessing Officer to initiate penalty proceedings under section 263. Conclusion: The tribunal vacated the Commissioner's order, finding that the Assessing Officer had conducted proper investigations and that the assessments were made in accordance with the law. The tribunal allowed the assessee's appeals, emphasizing that the Commissioner had not established any specific error causing prejudice to the revenue.
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