1980 (4) TMI 11

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....er, admittedly erroneous, was prejudicial to the interests of the Revenue ?" For the assessment year 1969-70, the assessee filed a return on December 31, 1969, showing an income of Rs. 5,472. The ITO was not satisfied with the return and called upon the assessee to produce accounts. While the accounts were being examined by the ITO, he found that there were cash credit accounts relating to four persons showing huge deposits by them to the assessee. Since the ITO was not satisfied with the accounts, he issued a notice under s. 143(3) of the I.T. Act, 1961 (hereinafter referred to as the Act), for producing evidence to prove that the four creditors shown in its books of account were in possession of the amounts advanced to the assessee whi....

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....in the words of the learned Additional Commissioner: "...The assessment is undoubtedly invalid and, therefore, to safeguard the Revenue it is essential that action should be taken u/s. 263 so that the assessment is made afresh according to law. The assessment made by the ITO is set aside, being illegal. He is directed to make the assessment afresh on the basis of revised return after issuing notice u/s. 143(2). " Against the aforesaid order, the assessee went up in appeal to the Income-tax Appellate Tribunal, Chandigarh Bench. The Tribunal, by order dated September 19, 1974, allowed the appeal and set aside the order of the learned Additional Commissioner, on the ground that it was not found that the assessment order was prejudicial t....

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.... facts of the case in hand, a plain reading thereof would show that there was no material on the record which could justify the Additional Commissioner to pass an order and, therefore, the Tribunal was right in coming to the conclusion that there was neither any finding nor any material on the record to justify the order passed under s. 263(1) of the Act. On the other hand, as against the returned income of Rs. 5,472, the income was finalised at Rs. 1,34,440. Even the revised return showed an income of Rs. 12,072 which was much less than what was finally found to be. Therefore, it was the assessee who was aggrieved against the assessment order or non-issue of the notice under s. 143(2) of the Act, and not the Revenue. It will be useful to r....