COMMISSIONER OF INCOME TAX Vs. TEK CHAND SAINI

JUDGEMENT

(1.) This appeal by the Revenue has been preferred under Section 260A of the Income-tax Act, 1961 (for brevity the "Act"), challenging the order dated June 6, 2008 passed by the Income-tax Appellate Tribunal (for brevity "the Tribunal"), Delhi Bench in I. T. A. No. 2091/Del/ 2005 for the assessment year 2000-01. The Revenue has claimed that the following question of law would emerge from the order of the Tribunal:

(2.) Briefly, the facts of the case are that the assessee has been running a proprietary business with the name M/s. Saini Traders, Jhajjar Road at Rohtak. He was dealing in agricultural implements. He filed his return of income for the assessment year 2000-01 on August 28, 2000 and his income was Rs. 1,01,480. The assessing authority received some information from the Income-tax Department (Investigation) and then reopened the assessment by issuing a notice under Section 148 of the Act. Consequently, the assessment came to be framed under Section 143(3) read with Section 147 of the Act on an income of Rs. 3,48,700 on March 31, 2005. Accordingly, the assessing authority made an addition of Rs. 2,43,014 representing a house which had allegedly been purchased by the assessee out of the undisclosed source of income. The claim of the assessee that the house belonged to the Hindu undivided family was not accepted. The rental income of Rs. 4,200 was also added.

(3.) On appeal before the Commissioner of Income-tax (Appeals), Rohtak, the assessee-respondent challenged the assessment on the ground that appropriate notice under Section 143(2) of the Act was not issued and consequently, the assessment framed by the Assessing Officer was required to the cancelled. However, on March 1, 2007, a show-cause notice under Section 263 of the Act was issued by the Commissioner of Income-tax (Appeals), Rohtak with the observation that the assessment order passed by the Assessing Officer on March 31, 2005 under Section 143(3) read with Section 147 of the Act was prejudicial to the interest of the Revenue. The Commissioner of Income-tax (Appeals), Rohtak did not accept the view of the Assessing Officer which was based on the report of the Departmental valuer which has quoted that the house was constructed during the year 1993-96. The Commissioner of Income-tax, Rohtak, however, in exercise of his revisional jurisdiction held that the construction of the residential house was completed only in March 2000 and the Assessing Officer has committed an error.