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TMI Blog2004 (4) TMI 47X X X X Extracts X X X X X X X X Extracts X X X X ..... livered by M. Katju J. -This appeal under section 260A of the Income-tax Act, 1961, has been filed against the judgment of the Income-tax Appellate Tribunal, Allahabad, dated October 18, 2002, relating to the assessment year 1998-99. Heard learned counsel for the parties. The appellant owns properties at 199, Transport Nagar, Kanpur, and 24, Chak Road, Allahabad, jointly with his two brothers, Sri Girdhar Gopal Gulati and Sri Sat Pal Gulati. The appellant has a 1/3rd share in the said properties. In the year 1993, the appellant and his brothers started construction of a building in a plot situate at 2/1/3, Minhajpur, Allahabad. The said construction was completed in the year 1997. In January, 1998, this building was let out to a society known as Shivram Das Memorial Society on rent for running an educational institution. On the basis of the rent received by the assessee, the income from the property was disclosed by the three brothers. The Assessing Officer completed the assessment under section 143(3) of the Act for the assessment year 1998-99 on March 9, 2001. The Commissioner of Income-tax set aside the aforesaid assessment order under section 263 holding that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1.5 crores as against Rs. 75,30,763 disclosed by the assessee. The inspector also reported that the property at 199, Transport Nagar, Kanpur, had been let out to a sister concern M/s. U. P. Transport Agency for monthly rent of Rs. 1,250. This property covers an area of about 4,000 sq. ft. and is situate at the market place, Hence the inspector estimated the rental at Rs. 5,000 per month. The inspector also reported that the property situate at 24, Chak Road, Allahabad, consists of about 20 rooms and this property has also been let out to a sister concern, M/s. United Auto Mobile, at a monthly rent of Rs. 150. The Commissioner of Income-tax hence concluded that the Assessing Officer had completed the assessment in undue haste and to save the assessment proceedings from becoming time barred and the Assessing Officer could not do the required investigations in the case of the assessee. Hence, the Commissioner of Income-tax was of the opinion that the order of the Assessing Officer was prejudicial to the interests of the Revenue. The Commissioner of Income-tax therefore set aside the assessment order dated March 9, 2001, and directed the Assessing Officer to make a fresh assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n their face value. No proper enquiry appears to have been made by the Assessing Officer in this case. The case was taken up for hearing in March, 2001, after the first hearing in November, 1999. In fact it has been admitted by the Assessing Officer that he could not make proper enquiries as the assessment was becoming time barred. It is well settled that if the Assessing Officer fails to make a proper enquiry this is erroneous and prejudicial to the interests of the Revenue vide K. A. Ramaswamy Chettiar v. CIT [1996] 220 ITR 657 (Mad); Addl. CIT v. Mukur Corporation [1978] 111 ITR 312 (Guj); Gee Vee Enterprises v. Addl. CIT [1975] 99 ITR 375 (Delhi); Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC); CIT v. Active Traders (P.) Ltd. [1995] 214 ITR 583 (Cal); Swarup Vegetable Products Industries Ltd. (No. 1) v. CIT [1991] 187 ITR 412 (All); CIT v. Rampiyari Khemka [1967] 63 ITR 367 (Cal); Bagsu Devi Bafna v. CIT [1967] 63 ITR 333 (Cal); CIT v. Kiran Debi Singhee [1967] 65 ITR 501 (Cal); CIT v. Mahavar Traders [1996] 220 ITR 167 (MP); CIT v. Everest Cold Storage [1996] 220 ITR 241 (MP) and Duggal and Co. v. CIT [1996] 220 ITR 456 (Delhi), etc. Learned counsel for the appe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he Commissioner and is not confined to the material available to the Income-tax Officer. Thus the revisional power of the Commissioner under section 263 is of wide amplitude. It enables the Commissioner of Income-tax to call for and examine the record of any proceedings under the Act. It empowers the Commissioner of Income-tax to make or cause to be made such enquiry, as he deems necessary in order to find out if any order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. After examining the records and after making or causing to be made an inquiry if he considers the order to be erroneous then he can pass the order thereon as the circumstances of the case justify, i.e., enhancing the assessment or he may modify the assessment, cancel the assessment and direct a fresh assessment. In this way, the Commissioner's order cannot be faulted because he cancelled the assessment and directed a fresh assessment. The Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 defines the words "erroneous and prejudicial to the Revenue" as follows: "An incorrect assumption of facts or an incorrect application ..... X X X X Extracts X X X X X X X X Extracts X X X X
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