9911796707
TMI Blog1983 (4) TMI 83X X X X Extracts X X X X X X X X Extracts X X X X ..... mined after allowance of development rebate of Rs. 1,30,606 and deduction under s. 80J of Rs. 5,815. However, the ITO had allocated these two items amongst the partners of the assessee firm. Subsequently, he noticed that there was a mistake apparent from record. These two items were to be carried forward for set off against the income, if any, for the subsequent assessment year. Therefore, the ITO made an order of amendment on 24th Jan., 1977 to correct this mistake. 3. We have informed ourselves from the record of the revenue that on 4th March 1978 vide LAR 3806-09, in the case of the assessee for the year under appeal, the revenue audit observed that development rebate and depreciation allowed on Oxygen plant was wrongly allowed becaus ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on allowance. The facts of the case of Tara Singh vs. CIT (1963) 47 ITR 756 (MP) relied upon by the audit, are not applicable to the facts of the case under consideration. But it appears that instead of accepting this version of the ITO that he had acted in a bonafide manner on the facts of the case and made the assessment in accordance with law taking into consideration, inter alia, the relevant provisions of law and the circular of the Board, the matter was processed further. Again on discussion with V.P. Dewan, RAO, AG: Haryana, Chandigarh held between 13th March, 1980 to 19th March, 1980, Shri G.C. Jain, Chief Auditor of the revenue observed that, "as already intimated, the above machinery was not purchased on hire purchase basis and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... opening of the assessment, the Income-tax Officer held that the assessee was not entitled to depreciation on the Oxygen plant, amounting to Rs. 1,84,484 and development rebate of Rs. 1,30,606. He has also held that relief under section 80J amounting to Rs. 5,815 was not admissible. This was challenged in appeal before the Commissioner of Income-tax (Appeals) and he observed that the question whether the assessee who acquires assets on hire purchase basis is the owner of such assets or not within the meaning of s. 32 of the Income-tax Act, 1961, is clearly a point of law and the audit cannot, therefore, impart information on this point of law to the Income-tax Officer within the meaning of s. 147(b) in view of the decision of the Supreme Cou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der was, therefore, rightly annulled as it was ab initio void. 8. We have set out the relevant facts in order to project the back ground on the basis of which the Income-tax Officer had to reopen the assessment. The entire correspondence between the Income-tax Officer, the revenue audit and his higher authorities shows that the belief of the Income-tax Officer that the assessee was entitled to development rebate, depreciation and deduction under s. 80J was bonafide and it resulted from proper application of his mind to the facts of the case including the relevant provisions of law and the circulars issued by the Board. When he was made to reopen the assessment, it was not in consequence of information in his possession that he came to ha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ect view but he had to change this view later on to reopen the assessment. This case is therefore, clearly covered by the judgment of the Supreme Court in the case of Indian and Eastern Newspapers Society referred to supra. 10. In this case, the Hon'ble Supreme Court had clearly pointed out the position as to what can constitute information and what will tantamount to instructing the Income-tax Officer about the position of law that he should adopt. In this case, the revenue audit was instructing the Income-tax Officer as to what the position of law he should have adopted in deciding the case of the assessee. This is beyond their jurisdiction and the Income-tax Officer could not take that as something by way of information to have reason ..... X X X X Extracts X X X X X X X X Extracts X X X X
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