YESHWANT TALKIES Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) THIS is a reference made by the Income-tax Appellate Tribunal referring for our answer the following questions of law :

(2.) WHETHER, on the facts and in the circumstances of the case, when the original assessment was the subject-matter of an appeal before the Appellate Assistant Commissioner, the action of the Income-tax Officer to initiate action under Section 147(b) subsequently could be legally justified ?"

(3.) LEARNED counsel for the Revenue, on the other hand, contended that the Income-tax Officer did not act on the audit objections only but thereafter made enquiries from the assessee itself, called its account books, examined them and it is only thereafter that he prepared his report which was sent to the Commissioner. However, learned counsel frankly conceded that in the report, the Income-tax Officer expressed the view that it was not possible to take action under Section 147 and, therefore, he placed the matter before the Commissioner for taking action under Section 263 ; but he contended that ultimately in the order-sheet when the Income-tax Officer passed order starting proceedings under Section 147, he has expressed satisfaction on the facts which form part of his report to the Commissioner and, therefore, it could not be said that there was no information on the basis of which action could have been taken under Section 147(b) of the Act.