9911796707
TMI Blog1989 (1) TMI 158X X X X Extracts X X X X X X X X Extracts X X X X ..... peal no return u/s. 139 of the Act had been filed. Finding that the assessee along with others had made investment in the construction of a building of M/s. Om Rice Mills, the Income-tax Officer issued notice u/s. 148 calling for a return from the assessee. This notice was issued on 7-2-1980. The assessee filed a return declaring 'nil' income on 28-2-1980. However, after taking into consideration. the report of the Valuation Officer regarding the cost of construction for the period Diwali, 1974 to Diwali, 1975 and for the period for Diwali 1976 to Diwali 1977, the ITO compared the cost of construction declared as recorded in the books of account and the cost of construction estimated by the assessee's valuer. Finally, he concluded, as recor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... w.e.f. 1-4-1985 and it was applicable for and from the assessment year 1985-86 onwards. It was also contended that failure of the ITO to initiate penalty proceedings u/s. 271(1)(a) did not empower the Commissioner to assume jurisdiction u/s. 263 of the Act. It was projected to the Commissioner that an assessment made by the ITO could not be held to be erroneous and prejudicial to the interests of revenue merely because of the failure of the ITO to record his opinion about the penalty, if any, leviable upon the assessee. In any case, it was argued that such a minor omission or mistake could not justify the action of the Commissioner u/s. 263. 4. The Commissioner considered the submissions made on behalf of the assessee before him. Accordin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nalty proceedings u/s. 271(1)(a). Thus, it would be seen that the order of the ITO was held to be erroneous and prejudicial to the interests of the revenue because, the ITO neither recorded his opinion anywhere in his record of the proceedings about charging of interest u/s. 139(8)/217, nor he actually levied any interest under these sections. 6. The ld. counsel for the assessee submitted before us that under the provisions of section 263, as applicable to the assessment year under appeal, there is prohibition provided in sub-section (2) ibid that no order shall be made under sub-section (1)---(a) either to revise an order of reassessment made u/s. 147, or (b) after the expiry of two years from the date of the order sought to be levied. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eme Court was dismissed by their Lordships as reported in [1984] 147 ITR 1 (Sts.). 8. Regarding the other points, on which the Commissioner projected to the assessee that action u/s. 263 was required, the ld. counsel reiterated that the assessment made by the ITO not being a regular assessment and having been made u/s. 147(a), the jurisdiction of the CIT u/s. 263 was statutorily ousted. For this proposition he relied upon the following authorities : 1. CIT v. Smt. Jagjit Kaur [1980] 126 ITR 540 (All.) ; 2. P.C. Puri v. CIT [1985] 151 ITR 584 (Delhi) ; 3. T. Khemchand Tejoomal v. CIT [1986] 161 ITR 492 (Bom.) ; 4. CIT v. Mukand Family Trust [1987] 23 ITD 12 (Delhi) (TM) ; 5. Third ITO v. T.R.A. Arunthavaselvan [1988] 24 ITD 121 ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n he appears to have himself given up the point regarding the failure of the ITO to initiate proceedings u/s. 271(1)(a) of the Act. Therefore, for all intants and purposes, we have to consider whether non-charging of interest u/s. 139(8) and section 217 by the assessing officer and his failure to indicate his mind about it anywhere on the record of the proceedings could render firm order as erroneous as well as prejudicial to the interest of revenue so as to clothe the Commissioner with lawful jurisdiction u/s. 263 of the Act. In determining this issue, we have not only considered the facts of the case but have also very carefully gone through all the authorities cited from both the sides. 11. We are of the opinion that in view of the abo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on. 12. However, the question is whether, when the ITO makes an original assessment u/s. 147(a) there is any bar provided under the law to prohibit the Commissioner from assuming lawful jurisdiction within the meaning of section 263(2)(a) of the Act. In this context, we do not find any difficulty in determining the issue because the language of section 263(2)(a) is very clear that the Commissioner is debarred from assuming powers of review or revision only in a case, where an order of reassessment (emphasis added) has been made u/s. 147. An order of re-assessment u/s. 147 is different from an order of original assessment u/s. 147. Therefore, it is clear that the Legislature in its wisdom has specifically used the word reassessment to deba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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