TaxTMI 
TaxTMI 
2015 (10) TMI 2371
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....t of being prejudical to the interest of Revenue and issued a show-cause notice under section 263 of the Act dated 8.1.2015, which reads as under: "Sub:- Show-cause notice u/s 263(1) of the I.T. Act, 1961 in the case of Sh. Narain Singla Prop. M/s Narain & Company, Mandi Gobindgarh - PAN: AEFPS0754N - Asstt. Year: 2011-12 -Regarding- A search u/s 132 of the I.T. Act, 1961 was conducted on 30.06.2010 in Narain & Company Group of cases. The assessee Sh. Narain Singla Prop. Narain & Co., Mandi Gobindgarh belongs to Narain and Company Group of cases. The return of income for A. Y. 2011-12 declaring income of Rs. 1,94,75,810/- was filed on 24.09.2011. Assessment was completed determining total income of Rs. 1,98,15,490/- vide order dated 31.01.2013 passed u/s 143(3) r.w.s. 153B(l)(b)/153A of the I.T. Act. 2. After going through the assessment records, it is noticed that assessment order is erroneous inasmuch as it is prejudicial to the interest of revenue for the reasons given below:- In the course of search at the residential premises of Sh. Narain Singla at H. No. 379, Sector-3C, Mandi Gobindgarh, jewellery of Rs. 93,65,165/- was found out of which jewellery of Rs. 33,85,573/- was....
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....t Rs. 42,23,076/- From the above details, it is noticed that Smt. Shashi Singla w/o the assessee Sh. Narain Singla has shown 1794 gms. of jewellery valued at Rs. 39,98,826/- for the first time in her wealth-tax return filed for assessment year 2012-13. Further, assessee himself has shown jewellery weighing 807.39 gms. valued at Rs. 17,99,672/- in his wealth-tax return filed for the assessment year 2012-13 for the first time. The Assessing Officer has accepted the claim of the assessee with regard to the declaration of jewellery under VDIS scheme, 1997 in the name of Smt Shashi Singla as such without making any enquiry. Similarly, A.O. has accepted the claim of assessee with regard of jewellery weighing 807.39 gms. without making any enquiry. However, the facts show that the assessee was not filing wealth-tax returns prior to the search on his premises which otherwise were required to be filed, had the assessee's claim of jewellery under VDIS Scheme, 1997 declared by his wife Smt. Shashi Singla been true. Even otherwise A. O. did not enquire whether same jewellery continued to be held by Smt Shashi Singla even at the time of search. All these aspects have bee....
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....for assessment years 2009-10 and 2010-11 by Smt. Shashi Singla only on 30.3.2011 i.e. after the date of search. With regard to filing of computation of wealth tax returns, since the assessee has claimed that all these details and returns had been filed only after the date of search, it was all the more necessary for the Assessing Officer to conduct proper enquiries in this respect instead of blindly believing assessee's claim of declaration of jewellery under VDIS 1997. In view of this, the learned Commissioner of Income Tax held the assessment order to be erroneous insofar as prejudical to the interest of the Revenue. The learned Commissioner of Income Tax relying on a number of judicial pronouncements set aside the assessment order with the direction to the Assessing Officer to make fresh assessment de-novo after properly examining the facts of the case and relevant legal provisions and conducting proper enquiry and after affording an opportunity of being heard to the assessee. 6. Now, the assessee has come up in appeal before us raising following grounds of appeal: "1. That the Worthy Principal Commissioner of Income Tax (Central) has erred in invoking the proceedings u/s....
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....to be the Istri Dhan of the ladies of the family as per Circular of the CBDT No. 1916 dated 11.5.1994. Further, 1334 gms of jewellery was claimed to be declared in VDIS 1997 in the hands of Smt. Shashi Singla. In this way, the total jewellery weighing 3284 gms was explained. Jewellery of 607.030 gms. Remained unexplained for which it was submitted that the assessee had already surrendered an amount of Rs. 15 lacs on account of unaccounted jewellery. At page 23 of the Paper Book a certificate under section 68 of VDIS 1997 issued by the Commissioner of Income Tax, Patiala dated 28.12.1997 was enclosed. At pages 25 and 26 of the Paper Book, copy of the Valuer's Report was enclosed. Page 27 onwards were the copies of wealth tax returns. These evidences were submitted before the Assessing officer in proceedings u/s 153A. All these documents were shown to us to emphasize the fact that the Assessing Officer was open to the issue of jewellery found during the course of search and he has taken this view only after appraisal of said documents. At pages 33 and 34 of the paper book, assessment order made under section 143(3) r.w.s. 153A of the Act was enclosed. Further, our attention was s....
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....ry. However the record shows that the assessee has filed the VDIS certificate issued to him by the Commissioner of Income Tax, which is quite a valid document to prove the possession of jewellery by the assessee, which the Assessing officer accepted as such. Secondly, as per CIT, the assessee had filed wealth tax return only after the search. Even if there is something not as per law in not filing the Wealth Tax Return earlier to the date of search, it does not affect the fact that assessee was having the jewellery as per the VDIS certificate. Thirdly, the CIT's objection is that the Assessing officer did not enquire whether the same jewellery continued to be held by Smt. Shashi Singla even at the time of search. For this there is nothing on record to show that she has transferred the jewellery declared under VDIS before the date of search. In view of this, Assessing officer's formation of belief that she was having the same amount of jewellery at the time of search is not out of place. Otherwise also these are all question of fact, on which the Assessing officer has formed an opinion. 11. Now on the legality of assumption of jurisdiction by the CIT(A) u/s 263 of the Act,....
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....uch finding has been recorded by CIT and the matter is restored to the Assessing officer to make further enquiry/investigation. In this context, our view get strengthened by the judgment of Hon'ble Delhi High Court in the case of ITO v. D.G. Housing Projects Ltd. (2012) 343 ITR 329 (Delhi.),, wherein it has been held that the matter cannot be remitted to the Assessing officer for fresh adjudication by the CIT without recording a finding that the order of the Assessing officer is erroneous. 14. The learned Commissioner of Income Tax can also invoke jurisdiction under section 263 of the Act in a situation when there is a lack of enquiry. If there is an inquiry, however, inadequate it may be, it does not give jurisdiction to the learned Commissioner of Income Tax under section 263 of the Act to substitute his opinion. In the present case CIT himself has quoted the reply of the assessee in his show cause. Though it may not be proper in his opinion. In case of difference of opinion, the learned Commissioner of Income Tax cannot invoke the jurisdiction under section 263 of the Act. This view also get supported by the landmark judgment of the Hon'ble Bombay High Court in the cas....