TaxTMI 
TaxTMI 
1989 (2) TMI 143
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....identified cash book, ledger and certain loose papers relevant to the period 1-3-1983 to 31-3-1984 which were later impounded u/s. 131 on 5-11-1984. Loose papers impounded by the Income-tax Officer consisted of the following : --- (i) Balance sheet drawn as on 28-3-1984 ; (ii) Balance sheet drawn as on 31-3-1984 ; and (iii) In the balance sheet drawn on 31-3-1984 the assessee had shown cash credits totalling Rs. 96,200 in the names of the following 9 persons : --- Sl. No. Name of the creditor Amount Rs. 1. Bhagwan Dass 2,500 2. Chander Singh 10,000 3. Kal....
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....s that the cash credit the names of S/Shri Naresh Kumar and Ashok Kumar were not genuine and that the Income-tax Officer who completed the assessment, had not made any enquiries to ascertain the genuineness thereof and therefore, the assessment order was erroneous in so far as it was prejudicial to the interests of the revenue. The Income-tax Officer had, in his assessment order, had accepted these cash credits. 4. That is how the assessee has come up in appeal before us. Shri Virendra Talwar, the learned counsel for the assessee submitted that the learned Commissioner could not assume jurisdiction u/s. 263 in this case since the assessment was completed by the ITO u/s. 143(3) after conducting proper enquiries and after obtaining evidence and its verification from the assessment records of the creditors in respect of loans taken from the creditors. Next, he submitted that since in the notice u/s. 263, the learned Commissioner had mentioned that he had perused the assessment records of S/Shri Naresh Kumar and Ashok Kumar, it showed that what he had examined could not be called the record of the assessee and therefore, assumption of jurisdiction u/s 263 was improper and invalid. F....
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....exercising his jurisdiction under section 263 if the requisites of that provision were satisfied. A perusal of the notice dated 18-1-1985 shows that he duly took note of the survey operations which took place on 10-10-1984 and the loose papers which had been impounded. In para 2 of that notice, he did advert to the cash credits in the names of various persons aggregating to Rs. 96,200 which did not appear in the balance-sheet filed by the assessee along with the return and that in the balance-sheet actually filed, cash credits of Rs. 48,700 and Rs. 47,500 only and those too in the names of S/Shri Naresh Kumar and Ashok Kumar had been shown. The Income-tax Officer had asked for the explanation of the assessee as to why different balance-sheets were prepared. In this regard para 7 of the reply of the assessee is relevant. It was in the following terms :--- " 7. As regards queries raised by you in Para No. 8, it is submitted that the paper in which the names of S/Smt. Sham Lal, Bhagwan Dass, Chander Singh, Kalu Ram, Sube Singh, Ramji Dass and Sardari Lal appeared were written by our munim, who has since left Gohana without giving notice. We never contacted these persons for obtaini....
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....t made any enquiries to ascertain the genuineness of the amounts of Rs. 48,700 and Rs. 47,500 shown in the names of S/Shri Naresh Kumar and Ashok Kumar. He had also noticed the discrepancies in respect of entries found in the loose paper (page No. 3). In the case of Rampyari Devi Saraogi the Supreme Court had occasion to examine a similar matter wherein it was held as follows : " Held that all the additional material was supporting material and did not constitute the basic grounds on which the order under section 33B was passed, and even if the facts which the Commissioner introduced regarding the enquiries made by him had been indicated to the assessee, the result would have been the same. The assessee had not in any way suffered from the failure of the Commissioner to indicate the results of the enquiries. Moreover, the assessee would have full opportunity of saying to the ITO whether the income assessed in the assessment orders which were originally passed, was correct or not. The assessee could not, therefore, be said to have been denied an opportunity of showing cause against the grounds and materials and the rules of natural justice were not violated. " Even if S/Shri N....