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TMI Blog2012 (6) TMI 654X X X X Extracts X X X X X X X X Extracts X X X X ..... ifference between the value estimated by the departmental valuer as also given by the assessee's valuer and what was the reason for determining the income at such a low figure - Tribunal had committed error in holding that the assessment order in so far as it ignored difference in the two values of two different valuers was not erroneous or prejudicial to the interests of the Revenue - against assessee. - IT REFERENCE No. 27 of 2000 - - - Dated:- 5-12-2011 - R.K. Agrawal and B. Amit Sthalekar, JJ. A.N. Mahajan for the Petitioner. ORDER 1. The present reference under section 256(2) of the Income Tax Act 1961 (hereinafter referred to as the Act) has been made at the instance of the Revenue. The Tribunal has referred the follo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding at Rs. 6,58,994/-. In support, he filed a report of an approved valuer. The Assessing Officer completed the assessments for the assessment year 1978-79 to 1983-84 vide consolidated order under section 143(3)/148 of the Income Tax Act dated 31.1.1990, on the following income on agreed basis: Assessment years: 1978-79 .... Rs. 40,000/- 1979-80 .... Rs. 40,000/- 1980-81 .... Rs. 15,400/- 1981-82 .... Rs. 20,000/- 1982-83 .... Rs. 25,000/- 1983-84 .... Rs. 30,000/- 3. On examination of the records, the learned Commissioner of Income-tax, Allahabad, felt that the aforesaid assessment order of the Assessing Officer was erroneous and prejudicial to the interest of Revenue. He, therefore, initiated proceedings under section 2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Appellate Tribunal was invited and the judicial decisions relied by the learned counsel for the assessee, the Appellate Tribunal held that there appeared to be no error in the orders of the assessing Officer, especially because these were passed after conscious application of mind and after meeting all the arguments of the Departmental Valuer's report. Vide order dated 31st January, 1995, rendered in I.T.A. Nos. 171 to 176 (All.) of 1993, the proceedings under section 263 of the Income Tax Act were quashed for all the years. The operative part of the Tribunal's order is extracted below: "How is the order of the Assessing Officer erroneous has not been established which is an important ingredient, while considering the justifiability of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ade in the order of the C.I.T. that the order is erroneous will not make it erroneous, if otherwise the order of the Assessing Officer is not illegal." 5. We have heard Shri A. N. Mahajan, learned Senior Standing counsel on behalf of the Revenue. Nobody has appeared on behalf of the respondent-assessee. 6. Shri Mahajan, learned counsel states that the Assessing Officer without making any enquiry in respect of the investment made in the cinema building and without taking into consideration the reports submitted by the Departmental Valuation Officer had accepted the statement given by the assessee and that too on the last date of his retirement. He further submitted that assessment order has been passed without application of any mind ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind." 8. In the case of Bhagwan Das ( supra ) following the decision of the Supreme Court in the case of Malabar Industrial Co. Ltd. ( Supra ) this court has held that an order which has been passed without application of mind will also fall under the expression erroneous and prejudicial to the interest of the Revenue. Since the Income-tax Officer has granted exemption to the assessee in respect of income from agriculture and poultry-farming without any discussion and without any application of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 10. Applying the above principles in the present case, the Assessing officer has passed a single order for six assessment years in question under section 148 of the Act. The proceedings were initiated on the basis of differences as found in the investment shown by the assessee and as per property valued by the departmental valuer. The Assessing Officer had determined the income with the following observations "The assessee was totally dis-satisfied with the investment estimated by the Departmental Valuer and got his properties valued by the Approved Valuer and submitted it in support of the investment made by him. After examination of the books of account both the valuation reports reply filed and financial position of the assessee, net ..... X X X X Extracts X X X X X X X X Extracts X X X X
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