PT LASHKARIRAM Vs. INCOME-TAX OFFICER

JUDGEMENT

(1.) The assessee is aggrieved of the order dated 6-3-1982 of the learned Commissioner under section 263 of the Income Tax Act, 1961 (the Act).

(2.) The facts are that for the assessment year 1977-78, the assessee originally filed his return on 23-8-1977 showing an income of Rs. 33,310. Out of this income an amount of Rs. 28,068 was shown as profit under section 41(2) of the Act resulting from the sale of truck No. UPZ 9030 to one Shri Munni Lal, son of Babu Lal on 7-4-1976. The ITO issued notices under section 142(1) and 143(2) of the Act on 4-3-1980. Thereafter on 17-3-1980, the assessee revised his return and declared an income of Rs. 53,311 which included the profit under section 41(2) at Rs. 48,068 as against Rs. 28,068 shown earlier. The assessment was completed by the ITO the same day, i.e., on 17-3-1980 under section 139(8) and 217 of the Act and also imposed penalty against the assessee under section 273(c) of the Act. Against the same, the assessee moved an application on 24-5-1980 before the Commissioner for waiver. That application was rejected on 15-10-1981 after obtaining reports dated 29-7-1980, 23-7-1981 and 17-8-1981 of the ITO after the ITO had obtained the written statement dated 10-8-1981 of the truck purchaser Shri Munni Lal aforesaid and had examined him on 14-8-1981. The Commissioner issued a notice dated 26-2-1982 to the assessee under section 263 to the effect that for the following reasons, it prima facie, appeared to him that the assessment order passed on 17-3-1980 was erroneous insofar as it was prejudicial to the interests of revenue :

(3.) On behalf of the assessee, it was submitted before the learned Commissioner that the revised return had been filed by the assessee voluntarily and since the income shown in the revised return was found to be the correct income, it was, therefore, submitted that there was no error or prejudice to the interests of the revenue, if the ITO had accepted the return. It was also submitted that the provisions of section 271(1)(c) of the Act were not attracted as the revised return had been filed suo motu. However, the learned Commissioner was of the view that the assessment order had been passed by the ITO with undue haste and without proper enquiries and was, therefore, erroneous insofar as it was prejudicial to the interests of the revenue. He was of the view that the ITO had not applied his mind to ascertain the extent of investment made in the purchase of chassis of the new truck (No. UTY 355) as well as the expenditure incurred by the assessee on the construction of the body of the truck. He was of the view that this was the very purpose for which the ITO had selected this case for scrutiny instead of completing it under section 143(1). He found that the ITO had not obtained the copies of the assessees bank accounts and, therefore, the possibility of the investments/deposits in the bank accounts could not be ruled out. In this connection, he relied upon the assessees bank account with Vijaya bank Ltd. which showed that there were a number of deposits, some of which were by transfer from other accounts. He was also of the view that the ITO did not examine the correct sale price of the truck which was sold by the assessee. He was further of the view that there was nothing on the file to show that the ITO had decided not to initiate proceedings under section 271(1)(c) after considering the facts of the case. According to the learned Commissioner, there was omission on the part of the ITO to examine this aspect of the case. He, therefore, held that the assessment order passed by the ITO was erroneous insofar as it was prejudicial to the interests of the revenue. Accordingly, he set it aside and restored the matter to the file of the ITO for framing the assessment afresh after giving proper opportunity to the assessee of being heard and after making due and proper enquiries into the facts of the case.