CIT Vs. SHALIMAR HOUSING AND FINANCE LTD.

JUDGEMENT

(1.) THE present appeal preferred under Section 260A of the Income Tax Act, 1961 (hereinafter referred to as the Act) was admitted on the following substantial question of law: Whether in the obtaining factual matrix, the Tribunal is justified in holding that the action taken by the Commissioner under Section 263 of the Act is not justified despite the fact that a finding had been recorded by the said authority as regards the suppression of work -in -progress for a sum of Rs. 18,41,35,526?

(2.) THE facts which are necessary to be adumbrated for adjudication of this appeal are that a search and seizure operation was carried out under Section 132(1) of the Act in the premises of the respondent -assessee and the said operation commenced on 21 -2 -2002 and was concluded on 13 -3 -2002. The assessing officer framed the block assessment order under Section 158BC on 17 -9 -2004 and made several additions against the assessee.

(3.) BEING aggrieved by the aforesaid order the assessee preferred an appeal before the Tribunal and the Tribunal allowed the appeal, and set aside the order of the CIT and restored that of the assessing officer. The Tribunal referred to the decisions rendered in CIT v. K.L. Rajput : (1987) 164 ITR 197 (MP)(FB), CIT v. Simplex Metalica (1987) 164 ITR 202 (MP)(FB), Gilt Pack Ltd. v. CIT 4 TTJ 326 (MP), CIT v. Bharath Earth Movers Ltd. : (1998) 234 ITR 535 (Karn), CIT v. Jaykumar B. Paul : (1999) 236 ITR 469 (SC), Straw Products Ltd. v. Asstt. CIT : (2001) 252 ITR 444 (Cal), CIT v. Shri Arbuda Mills Ltd. : (1998) 231 ITR 50 (SC), Smt. Sujata Grover v. Dy. CIT : (2002) 74 TTJ (Del -Trib) 347, Rernex Constructions/Remex Electricals v. ITO and Ors. : (1987) 166 ITR 18 (Bom), Oil India Ltd. v. CIT : (1982) 138 ITR 836 (Cal), CIT v. Gabrial India Ltd. : (1993) 203 ITR 108 (Bom), CIT v. Kanda Rice Mills : (1989) 178 ITR 446 (P&H;), CIT v. Shiv Hari Madhu Sudan : (1998) 233 ITR 649 (Raj) and CIT v. G.K. Kabra : (1995) 211 ITR 336 (AP) and many other decisions and eventually concluded as follows: 11. As noted above the assessing officer has examined all the seized records and investigated all the issues subject -matter of the proceeding under Section 263 and thereby took one of the possible view in the matter while framing the block assessment order; the order of the assessing officer cannot be treated as erroneous and prejudicial to the interest of the revenue. The reply of the assessee is not considered by the learned Commissioner in proper perspective and hence proceedings under Section 263 are not valid. We are fortified in our view by the decision of Gauhati High Court in the case of Smt. Lila Choudhury v. CIT (2007) 289 ITR 226 (Gau). Hon'ble Gauhati High Court in the case of B and A Plantation and Industries Ltd. and Anr. v. CIT : (2007) 290 ITR 395 (Gau) held that if no independent mind applied by Commissioner, revision proceeding not valid. The present case before us appears to be same. The decisions cited by learned Departmental Representative are therefore, clearly distinguishable on facts and are not applicable to advance the contention of learned senior Departmental Representative. 12. Considering the facts, circumstances and discussion above, we are of the view that the learned Commissioner has not legally assumed the jurisdiction under Section 263 of the Income Tax Act. The order of the learned Commissioner dated 8 -12 -2006 is set aside and quashed. The order of the assessing officer is restored. The appeal of the assessee is accordingly allowed.