COMMISSIONER OF INCOME TAX Vs. BUDHILAL HIRALAL RANA

JUDGEMENT

(1.) <DJG>K.A.PUJ,J.</DJG> At the instance of the Revenue, the following two questions of law are referred to this Court for its opinion for asst. yrs. 1980-81 and 1981-82 :

(2.) WHETHER the Tribunal is right in law and on facts in holding that even if there is an omission or mistake with regard to certain items it was not proper as found in the assessment order to set aside the whole assessment?" 2. Heard Mr. Manish Bhatt, the learned senior standing counsel appearing for the Revenue. Nobody appears on behalf of the respondent-assessee. Since we are deciding this reference in favour of the assessee even if the office endorsement shows that the respondent is not served, no prejudice will be caused to the assessee by virtue of his absence in the present reference. For asst. yr. 1980-81, the return of income was filed by the assessee on 13th Jan., 1983, and notice under S. 143(2) of the Act was issued which was duly complied with and necessary details were furnished and proper explanation was also given in response to the said notice. The ITO has framed the assessment determining the total income of Rs. 10,990. For asst. yr. 1981-82, the return of income was filed on 13th Jan., 1983, and notice under S. 143 (2) of the Act was issued which was duly complied with and necessary details were furnished and proper explanation was also given in response to the said notice. The ITO has framed the assessment determining the total income of Rs. 19,110. The CIT vide his order dt. 28th Nov., 1984, has passed a common order for asst. yrs. 1980-81 and 1981-82 under S. 263 of the Act and set aside both the assessment orders passed by the ITO with a direction to pass fresh orders after carrying out necessary investigation. Pursuant to the order passed by the CIT under S. 263 of the Act, the ITO framed fresh assessments for asst. yrs. 1981- 82 and 1982-83 on 30th March, 1985, determining the total income at Rs. 25,270 and Rs. 53,440 respectively. The assessee has challenged the said fresh assessment orders before the AAC, Ahmedabad and he vide his order dt. 31st Jan., 1986, again set aside the assessment orders for both the assessment years. It is pertinent to note here that the assessee has preferred appeals before the Tribunal against the order passed by the CIT under S. 263 of the Act and while disposing of the appeals of the assessee, the Tribunal has come to the conclusion that there is no material brought on record to justify that there was an error or omission or failure on the part of the ITO so as to make the order erroneous. The Tribunal has further observed that apart from the fact that such order is also to be prejudicial to the interest of the Revenue. The Tribunal has, therefore, set aside the order passed by the CIT under S. 263 of the Act. It is that order of the Tribunal which is under challenge in the reference before us.

(3.) FOLLOWING our decision in Arvind Jewellers' case (supra), we are of the view that the Tribunal was right in setting aside the order under S. 263 of the Act. We are also of the view that even if there is an omission or mistake with regard to certain items, it was not proper as found in the assessment order to set aside the whole assessment. In this view of the matter, we answer both the questions referred to us in the affirmative i.e., in favour of the assessee and against the Revenue.