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TMI Blog2001 (11) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... part of the records in the assessment proceedings of the assessee and the statements in the search operations regarding the son of the assessee could not be considered as forming part of assessment-of the assessee and thus the action was invalid?" The facts giving rise to these references are as under: Vallabhdas Vithaldas, the respondent in Income-tax Reference No. 65 of 1988 is an individual whose assessment was completed under section 143(3) of the Act on February 19, 1985. The respondent in Income-tax Reference No. 66 of 1988-Mrs. Savitaben is the wife of Vallabhdas Vithaldas. Her assessment was completed under section 143(1) of the Act on February 2, 1984. On August 27, 1981, search operations under section 132 of the Act had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dent-assessees' assessments and, therefore, they could not form the basis of an action under section 263 of the Act in so far as the respondent-assessees were concerned. The Tribunal relied on the decision of the Calcutta High Court in the case of Ganga Properties v. ITO [1979] 118 ITR 447 and held that the statements in question did not form part of the records of the respondent-assessees and, therefore, the Commissioner could not have invoked the power of revision under section 263 of the Act on the basis of such statements. Hence, these references at the instance of the Revenue. We have heard Mr. B. B. Naik, learned counsel for the Revenue. Though served, none appears for either of the respondent-assessees. Mr. Naik submitted that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... seizure operations regarding the assessees' son did not form part of the record of the assessment and, therefore, they cannot form the basis of an action under section 263 regarding the respondent-assessees. For this purpose, the Tribunal relied on the decision of the Calcutta High Court in the case of Ganga Properties v. ITO [1979] 118 ITR 447. The Tribunal observed that the word "therein" is an obvious reference to the record of the proceedings and, therefore, it is necessary that the basis of intervention by the Commissioner should be part of the records in the assessment proceedings of the assessee. The Tribunal further observed that no rule or procedure was pointed out on behalf of the Revenue to show that the assessee's statement in t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r. Even thereafter a doubt was raised and some of the appellate authorities took the view that the Explanation inserted by the Finance Act, 1988, was applicable to the orders which are passed by the Commissioner after June 1, 1988, when the Finance Act, 1988, came into force. The Legislature again stepped in through the Finance Act, 1989, so as to clarify that the provisions of the Explanation to section 263(1) shall be deemed to have always been in existence. After considering the aforesaid legislative history, the apex court has interpreted the word "record" in section 263(1) in the following words: "The revisional power conferred on the Commissioner under section 263 is of wide amplitude. It enables the Commissioner to call for and exa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that while section 263(1) uses the word "record", the Explanation goes further and states that the record includes all records relating to any proceeding under this Act. The use of the plural 'records' and 'relating to any proceeding under this Act' do not permit any -limitation being placed on the power of the Commissioner that the power under section 263(1) can be exercised only on the basis of the statements which are recorded in the course of search and seizure operations in respect of the very assessee and not in respect of any other person. The apex court has in terms overruled the decision of the Calcutta High Court in Ganga Properties' case [1979] 118 ITR 447 on which the Tribunal had relied while passing the order giving rise to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ot open to distinguish the same by referring to certain words of those provisions which were very much before the Supreme Court merely on the ground that some other arguments could have been urged which were not considered by the Supreme Court. Since the Tribunal had not examined the merits of the assessees' contentions, regarding invocation of power under section 263(1) of the Act and the Tribunal had held the action of the Commissioner invalid only on the ground that the statements of the assessees' son did not form part of the record under section 263(1) of the Act, for exercising powers in respect of the respondentassessees, the matter will have to be considered by the Tribunal on the merits. Accordingly, our answer to the questio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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