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TMI Blog1982 (5) TMI 72X X X X Extracts X X X X X X X X Extracts X X X X ..... possession of the diamonds and jewellery and, therefore, no tax attached to the assesse in respect of the ownership of these assets. Thus, in terms of clauses (ii), (iia) and (iii) of sub-section 5 of section 132, he held that there was no need to retain any portion of the seized assets under this section and ordered for the release of the same. However, the Commissioner in exercising his powers under section 263 found that the order of the ITO was apparently not in conformity with the provisions and the intention of section 132(5), since he has determined the issue on the basis of possibilities and not on the basis of findings ; that it was represented before the ITO that the assessee's wife Smt. Shoba had received diamonds and jewellery and gold ornaments at the time of her marriage ; that without considering any evidence in the matter, the ITO held that it was quite possible that the lady might own jewellery looking to the 'well-known status of the assessee's family in society' and nothing had been brought on record regarding the social standing of the assessee's family ; that as pointed out in the notice, the lady had given a statement at the time of seizure in which there was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mb of the assessee's objection, the same has been met by the Supreme Court in the case of Director of Inspection of Income-tax V. Pooran Mall Sons [1974] 96 ITR 390. At para 2 on page 396 of the report, this contention was dealt with. So also Vasani Co. v. CIT [1978] 112 ITR 819 (Guj.). The ratio of these decisions is that the statutory limit of 90 days applies only to the initial order and not to any subsequent order which may be required to give effect to orders passed by superior authorities. Thus, the ITO can now pass a fresh order under section 132(5) ordering the retention of the assets which will give legal effect to the proceedings. (7) On merits, it is argued that the assessee had established the status of his family and the ITO was justified in assuming that the lady would have ornaments of the value claimed. In support of this a copy of the assessment order in the estate duty case of the wife's mother dated 2-9-1960 is produced in which it is shown that she had gifted property worth Rs. 60,000 to her relations. This also appears to be a new argument and can be mainly disposed of. The estate duty order does not indicate the nature of the amount gifted and to whom it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssioner set aside the order of the ITO under section 263, then the ITO gets more time than prescribed under section 132(5) for passing the order, which is not within the jurisdiction of the Commissioner to extend the limitation under section 132(5) for passing the order. Hence, an order under section 132(5) cannot be revised by the Commissioner under section 263. On merits, Shri Patil contends that according to the status of the family, the ITO was justified in assuming that the lady would have ornaments of the value claimed and the reliance is placed on the assessment order in the estate duty case of the wife's mother dated 2-9-1960 as well as on the paper book containing pages 1 to 8 and that of the order of the ITO under section 132(5). On the other hand, Shri Gupta, the learned departmental representative, contends that the impugned order is justified and called for no interference. He relies on the order of the Commissioner and the decisions in the cases of Smt. MukundKumari v. K. V. S. Namoondari, 17th ITO [1979] 118 ITR 433 (Bom.), (sic) [1978] 112 ITR 81. He further contends that the order under section 132(5) is an appealable order and as such, the Commissioner is also ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nal in the case of N. M. Virwani [IT Appeal No. 2227 (Bom.) of 1978-79, (assessment year 1973-74)] decided on 4-8-1979. We do not see any substance in this contention of Shri Patil because the Tribunal in the aforesaid case did, not consider the order under section 144B of the Act, where the Tribunal held that the order passed by the ITO on the direction of the IAC under section 144B is the order of the IAC and as such (sic) the jurisdiction of the Commissioner under section 263 is ousted to revise such order ; because in passing the order under section 144B, the ITO is bound to follow the directions issued by the IAC whereas in passing the order under section 132(5), he has to make the order with the previous approval of the IAC within 90 days, which means that the ITO is to pass the order within 90 days subject to the approval of the IAC, but the section does not say that he should do so according to the directions of the IAC and there is no material on the record to show that the ITO passed the order under section 132(5) on the directions of the IAC. The very reading of section 132(5) shows that it is merely a procedural section for the purpose of the previous approval of the IA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y, their Lordships of the Gujarat High Court in Vasani Co. v. CIT [1978] 112 ITR 819, held : "When there is an order of remand passed by the higher authorities in appeal or revision or because of the answer given in reference or by the High Court in exercise of its original jurisdiction the time limit laid down in section 275 of the Act will not apply ; that if section 275 were literally construed as applying the time limit of two years in all cases, full effect cannot be given to the hierarchical scheme for the correction of penalty orders ; that a construction which accords with reason and justice, must be preferred to one which would completely defeat the intention of the Legislature without advancing the object of the provision". Thus, in view of our above discussions and reasons thereto, we hold that the legal contentions of Shri. Patil as reproduced above are having no substance. Hence, we reject these holding further that the Commissioner has jurisdiction under section 263 in revising the order of the ITO passed under section 132(5) if he, on the scrutiny of the record, comes to the conclusion that the order passed by the ITO under section 132(5) is erroneous insofar a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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