COMMISSIONER OF INCOME TAX Vs. BELAL NISA

JUDGEMENT

(1.) THESE references relate to the assessment years 1968-69 to 1972-73. The questions referred to us for recommendation are as follows :

(2.) THESE references must be decided on the ratio of the two decisions of this court in CIT v. Pushpa Devi [1987] 164 ITR 639 and CAT v. Rambha Devi [1987] 164 ITR 658. The facts are that pursuant to a scheme to help small assessees, the assessee in the instant case was assessed by the Income-tax Officer. In the Scheme, at paragraph 4, it was stated that " Returns of income filed in the names of minors and ladies should not, however, be accepted without inquiry". Despite this specification in respect of minors arid ladies, without adequate inquiry, the assessee was assessed in terms of Section 143(1) of the Income-tax Act. The Commissioner applied his mind to the matter in terms of Section 263(1) of the Income-tax Act. He held that the scheme did not apply to a person like the present assessee and, therefore, the order of assessment was erroneous. In his view, the erroneous order was prejudicial to the Revenue. He, therefore, set aside the order of assessment. The assessee, being aggrieved by the order of the Commissioner, appealed to the Tribunal. The Tribunal set aside the order of the Commissioner holding that the scheme applied to persons like the assessee and the Commissioner had no jurisdiction to set aside the assessment. The Tribunal, therefore, retained the assessment of the Income-tax Officer and cancelled that of the Commissioner. The Revenue, being aggrieved by the order of the Tribunal, has moved this court and referred the questions mentioned above for our opinion. Questions similar to those were referred to us earlier, which were the subject-matter of reference before this court in CIT v. Pushpa Devi [1987] 164 ITR 639. In that case, we held that the Income-tax Officer had not carried out the necessary enquiry enjoined by Section 143(1). Since that was our opinion in regard to the power of the Income-tax Officer, we held that the Commissioner was within his powers in acting in terms of Section 263(1) of the Income-tax Act. The position is the same in the present case as well. In accordance with that view, we hold that the Tribunal was not right in setting aside the order of the Commissioner. The first question, therefore, referred to us in the present references also must be answered in favour of the Revenue and against the assessee.