COMMISSIONER OF INCOME TAX Vs. SAT PAL AGGARWAL

JUDGEMENT

(1.) THE Income -tax Appellate Tribunal, Amritsar Bench, Amritsar (for short, "the Tribunal"), has referred, under s. 256(1) of the IT Act, 1961 (for short "the Act"), the following questions of law for the opinion of this Court, which emerge from its

(2.) WHETHER the CIT can be precluded from exercising his power under s. 263 in case where an order of assessment has been passed in agreement with the assessee especially when the agreement itself causes erroneousness and prejudice to the Revenue ?

(3.) WHETHER , on the facts and in the circumstances of the case, the Tribunal was right in law in cancelling the order passed under s. 263 by the CIT - 2. The facts as noticed by the Tribunal in the statement of case for the asst. yr. 1981 -82 are that a notice under s. 148 of the Act was issued to the assessee and there being no response, ex parte assessment was framed. The ex parte assessment was vacated in appeal. Thereafter, the assessee filed a return declaring loss. During the assessment proceedings, at the instance of the AO, the assessee agreed to addition of Rs. 18,300 after consideration of all the entries. Finding the order passed by the AO to be erroneous and prejudicial to the interests of the Revenue, the CIT issued notice under s. 263 of the Act and directed the AO to make fresh assessment keeping in view the discussion in the order passed under s. 263 of the Act. In appeal, the order passed by the CIT under s. 263 of the Act was set aside by the Tribunal for the reason that the assessment having been framed on agreed basis on the discrepancies pointed out by the AO, there was no question of holding the order to be erroneous and prejudicial to the interests of the Revenue. 3. During the course of hearing, learned counsel for the Revenue reiterated the submissions made before the Tribunal and tried to buttress the same with the entries in the accounts, on the basis of which the CIT sought to exercise powers under s. 263 of the Act, but he could not dispute that it was on account of those very discrepancies having been pointed out that the assessee had agreed for the addition during the course of reassessment proceedings and the invocation of jurisdiction by the CIT on those very facts was nothing else but a change of opinion, which was not permissible. He could not point out any material on record to show that the ingredients as are required to be satisfied before exercise of powers under s. 263 of the Act were existent in the present case.