9911796707
TMI Blog2008 (10) TMI 588X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act. Later on, a search and seizure operation was conducted under section 132 of the Act in respect of accounts and deposits held by the assessee in benami names in Indian Bank, Osmangunj Branch, Hyderabad. An amount of Rs.30,94,157 was seized being the proceeds of benami deposits. Subsequent to the search, the assessee had admitted that these fixed deposits belonged to him and represented his income not declared in the returns of income for the assessment years 2002-03, 2003-04 and 2004-05 as under : Particulars of income disclosed in the return Assessment year 2002-03 (original return) (Rs.) Assessment year 2003-04 (original return) (Rs.) Assessment year 2004-05 (original return) (Rs.) Income from house property 2,16,720 2,19,251 3,37,470 Interest and remuneration from firms 3,25,074 3,47,801 5,41,044 1,10,527 Income from other sources 6,52,321 Deduction under section 80L 9,000 6,43,320 Subsequently assessee filed revised return showing con cealed income as under : Indian Bank FDRs 28,00,000 12,00,000 Interest on FDRs 73,458 1,99,090 18,000 Profit from own business 38,500 1,22,500 38,847 Cash as on 10-9-01 1,60,000 30,71,958 15,21,590 56,847 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 263 of the Act. However, the learned Commissioner of Income-tax after considering the assessee's explanation while observing that dropping of proceedings amounts to order and if such order is prejudicial to the interests of the Revenue, then such order is amenable to revisionary powers under section 263 of the Act distinguished all the decisions relied on by learned counsel for the assessee. He after relying on the ratio of the decisions of the following cases (1) New Jagat Textile Mills P. Ltd. v. CIT [2006] 282 ITR 399 (Guj). (2) CIT v. Braj Bhushan Cold Storage [2005] 275 ITR 360 (All). (3) ITO v. Smt. Lajwanti Devi [1998] 66 ITD 95 (Chandigarh TM). (4) Ahluwalia Contracts (I) Ltd. v. Joint CIT [2007] 161 Taxman 253 (Delhi). (5) Addl. CIT v. Jeevan Lal Sah [1994] 205 ITR 244 (SC). (6) CIT v. Radhey Shyam Shyam Sunder Jaiswal [1992] 197 ITR 31 (All). (7) CIT (Addl.) v. Irshad Ali [1992] 197 ITR 144 (All). (8) CIT v. Prathi Hardware Stores [1993] 203 ITR 641 (Orissa). (9) CIT v. Lunidaram Tulsidas Panjabi [1993] 204 ITR 674 (Bom). (10) CIT v. Shama Magazine [1995] 213 ITR 64 (Delhi). (11) CIT v. M. M. Khambhatwala [1992] 198 ITR 144 (Guj). set aside the said dr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y the apex court in the case reported in CIT v. K. Y. Pilliah and Sons [1967] 63 ITR 411 at pages 415, 416. (4) The learned Commissioner of Income-tax is not justified in rejecting a conscious decision taken by the Assessing Officer, after duly considering detailed reply filed by the assessee. The view taken by the Assessing Officer was a possible view, which could not be said to be unsustainable in law, and the Commissioner of Income-tax could not have substituted his opinion in place of opinion of the Assessing Officer. Therefore, there was no basis whatsoever for holding the Assessing Officer's order as erroneous and prejudicial to interests of the Revenue. (5) Any other ground or grounds that may be urged at or before the time of hearing. At the time of hearing, learned counsel for the assessee while arguing all the grounds of appeal as common grounds of appeal, reiterates the same submissions as submitted before the learned Commissioner of Income-tax. He further submits that since the order dropping the penalty proceedings was not communicated to the assessee, the order passed by the Assessing Officer dropping the penalty proceedings is not an order in the eye of law and for ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sequently after the search the assessee has filed a revised return disclosing income from surrender of FDRs and interest thereon, profit from own business and cash found aggregating to Rs. 30,71,958. In the return for the assessment years 2003-04 and 2004-05 the assessee has disclosed income from surrender of FDRs, interest on FDRs and profit from own business. We further find that the Assessing Officer has accepted the income disclosed by the assessee in the scrutiny assessment under section 143(3) of the Act. Subsequently on examination of records it was found by the learned Commissioner of Income-tax that the Assessing Officer while passing the assessment order has also initiated penalty proceedings under section 271(1)(c) of the Act for the assessment years under consideration but has dropped the same by a noting in the order sheet dated June 23, 2005. According to the learned Commissioner of Income-tax, the said dropping of penalty proceedings is erroneous and prejudicial to the interests of the Revenue as the Assessing Officer has failed to pass any speaking order in accordance with the provisions of law. It was contended by the learned authorised representative that the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a [1982] 133 ITR 433 (Cal), relied on by learned counsel for the assessee it has been held at page 434 (headnote) : "that the entry made in the order sheet on October 31, 1963, assessing the loss could not be treated as an order of assessment. Therefore, the return filed by the assessee on June 12, 1961 was pending and as such the Income-tax Officer could not ignore the same and reopen the assessment under section 147. The reassessment proceedings were, therefore, not valid". In CIT v. Kartar Singh and Co. P. Ltd. [2008] 300 ITR 440 ; 169 Taxman 219 (P&H) relied on by learned counsel for the assessee it has been held at page 220 (headnote of Taxman) : "that the Tribunal was justified in cancelling the order passed by the Commissioner of Income-tax by holding that jurisdiction under section 263 can be exercised only in relation to an order passed by the Assessing Officer and not in relation to an intimation". In H. H. Rajdadi Smt. Badan Kanwar Medical Trust v. CWT [1995] 214 ITR 130 (Raj) relied on by the learned Departmental representative it has been held at page 136 : "……that an order sheet entry made by the Wealthtax Officer dropping the proceedings without commun ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
