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TMI Blog1987 (3) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... lf. According to him, the matter would be purely of an academic interest. The learned counsel submitted that he was not contesting the legal issue purely on the facts and circumstances of the case before us and wanted us to record this concession. 3. We would accordingly decide the first issue against the assessee and hold that the Commissioner was empowered to revise an order passed by the ITO under section 132(5). 4. We now come to the merits of the case. The department carried out searches under section 132 on various dates at the residential premises of the assessee. As a result a seizure was effected to the extent of Rs. 1,70,900 being the value of gold ornaments and jewellery. The total value of the jewellery and ornaments found was, however, Rs. 5,88,657. In addition the search party also found cash amounting to Rs. 9,516 US (Dollars 155) as well as silver ornaments and utensils worth Rs. 48,000 but these were not seized. 5. In addition to the above items a sum of Rs. 14,600 was found from locker No. 119A of the Social Co-operative Bank Ltd., Ahmedabad, which was in the name of one Shri Ratanlal Dhanraj. 6. The ITO thereafter initiated action under section 132(5) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at the said amount was kept by him as per the instructions from you. However, the ITO while finalising the proceedings under section 132(5) has accepted the statement subsequently made by Shri Ratanlal Dhanraj that the said amount belongs to him. This has been accepted by the ITO without any proper verification. In view of the above, the order passed by the ITO under section 132(5) is erroneous insofar as it is prejudicial to the interests of revenue." 8. The assessee filed a written reply dated 28-10-1985 whereby he sought to meet all the points raised by the learned Commissioner. To summarise the reply the assessee submitted as follows : (1) The reconciliation in respect of description and weight of ornaments as per the valuation report and the actual description and weight of ornaments was prepared, explained and verified by the ITO in respect of all the ornaments including those not seized. (2) That payments to Alankar Jewellery, Bombay was by draft duly accounted for in the books of account. That only a part of the jewellery (5 pcs. out of 26 pcs.) was seized, but fully explained to the ITO. (3) That ornaments prepared by C.D. Soni were properly accounted for weight-wi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed for payment of wages. This shows that the amount belonged to Shri Jitmal who gave it to Shri Ratanlal who was only a working partner and had no control over the financial matters. The ITO accepting the statement of Shri Ratanlal at the time of proceedings under section 132(5) and ignoring the original statement made by Shri Ratanlal without proper cross examination as to the source of this amount and from which bank it was drawn as the notes were new ones shows that the ITO acted in hastily manner and thus has passed an order which was erroneous and prejudicial to the interests of the revenue." 10. It is this action of the Commissioner which is now in appeal before us. At the outset the learned counsel for the assessee submitted that the Commissioner had exceeded his powers by passing an order under section 263 on the facts and circumstances of the present case. It was contended that a substantial amount of evidence supported by explanations had been given to the ITO. It was not that the ITO had blindly accepted the same but he had made detailed enquiries, and cross-checked each and every item of jewellery. In support of his contentions, the learned counsel referred to various ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pe which is normally done at the time of regular assessment, but the same should be of a composite nature taking into its compass all aspects of the matter in as quick a period as possible. This is so because of the time limit of 90 days. The ITO on the one hand not being expected to make an investigation as thorough as in regular assessment proceedings, cannot be absolved of the responsibility to examine the matters before him with a reasonable amount of diligence and care. 15. The ITO in the present case examined the various items concerned and gave detailed reasons in his order for accepting their existence with the assessee. The Commissioner in fact was quite satisfied with the order insofar as it pertained to the silver and silver ornaments, cash, household goods and the U.S. Dollars. it was only in respect of the jewellery and the cash of Rs. 14,600 found in the locker that the Commissioner was of the view that the order was erroneous and prejudicial to the interests of revenue. According to us, this apprehension of the Commissioner was not well founded inasmuch as according to us the order of the ITO was passed after making reasonable and proper enquiries. In paras 5 and 6 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e bothered as to what would happen at the time of the final assessment, expressing at the same time that the order under section 132(5) was provisional. He could have resorted to action under section 263 in respect of the final assessment order rather than to cancel the order under section 132(5) on the ground that the enquiries made by the ITO were not proper. Every order under the Act has its own scope and sphere. It should be allowed to operate in its own ambit provided it is a proper, reasonable and speaking order. We have not been able to find anything to the contrary in the present order of the ITO under section 132(5). We are further of the view that some sort of a finality has to be attached to orders under section 132(5) which are passed by the ITO after proper enquiry and verification. Further these orders are also approved by the IAC whose approval although administrative involves application of mind. 19. In view of the detailed discussion in the preceding paras we quash the order of the Commissioner under section 263 as according to us this was not a case for the exercise of these powers by the Commissioner. The appeal is allowed. - - TaxTMI - TMITax - Income Ta ..... X X X X Extracts X X X X X X X X Extracts X X X X
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