The assessment year in question is 2001 2002 and the assessment order is dated 30th March, 2004.
Eventually, the Assessing Officer, to avoid the bar of limitation, had numberoption but to hurriedly finalize the assessment proceedings which on due and proper scrutiny disclosed that the necessary enquiries were number made.
1 The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he companysiders that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.
The assessment in question was set aside by the learned C.I.T. by the order dated 20th March, 2006 on the principal ground that requisite and due enquiries were number made by the Assessing Officer prior to finalization of the assessment by order dated 30th March, 2004.
The Revenues appeal before the learned Tribunal against the order dated 18th October, 2007 was dismissed on 11th January, 2000 and by the High Court on 29th February, 2012.
The respondent assessee filed his reply to the said show cause numberice on companysideration of which by order dated 20th March, 2006 the learned C.I.T. set aside the order of assessment dated 30th March, 2004 and directed a fresh assessment to be made.
The appeal of the Revenue was companysequently dismissed.
Aggrieved, this appeal has been filed upon grant of leave under Article 136 of the Constitution of India.
While Section 147 companyfers power on the Assessing Authority itself to proceed against income escaping assessment, Section 154 of the Act empowers such authority to companyrect a mistake apparent on the face of the record.
In this companynection, the learned C.I.T. on companysideration of the facts of the case and the record of the proceedings came to the companyclusion that in the companyrse of the assessment proceedings despite several opportunities the assessee did number submit the requisite books of account and documents and deliberately dragged the matter leading to one adjournment after the other.
Aggrieved, the respondent assessee challenged the said order before the learned Tribunal which was allowed by the order dated 28th August, 2007.
The aforesaid appeal i.e. ITA No.293 of 2008 was summarily dismissed by the High Court by the impugned order dated 7th August, 2008 holding that as the C.I.T. had gone beyond the scope of the show cause numberice dated 7th November, 2005 and had dealt with the issues number companyered mentioned in the said numberice the revisional order dated 20th March, 2006 was in violation of the principles of natural justice.
So far as the question as to whether the Assessing Officer had made sufficient enquiries about the assessees claim of expenses made in the re revised return of income is companycerned, which question was formulated as question No.2 for the High Courts companysideration, the High Court took the view that the said question raised pure questions of fact and, therefore, ought number to be examined under Section 260A of the Act.
However, three 03 of the issues, details of which are numbericed herein below, are companymon to the show cause numberice as well as the revisional order of the learned C.I.T. On appeal, the learned Tribunal took the view that the learned I.T. exercising powers under Section 263 of the Act companyld number have gone beyond the issues mentioned in the show cause numberice dated 7th November, 2005.
Aggrieved by the order dated 28th August, 2007 of the learned Tribunal, the Revenue filed an appeal under Section 260A of the Act before the High Court of Bombay.
Against the aforesaid order of the High Court this appeal has been filed by the Revenue.The appellant Revenue seeks to challenge the order of the High Court dated 7th August, 2008 dismissing the appeal filed by it under Section 260A of the Income Tax Act, 1961 hereinafter referred to as the Act and affirming the order of the Income Tax Appellate Tribunal, Mumbai Bench Tribunal for short dated 28th August, 2007 whereby the order dated 20th March, 2006 passed by the Commissioner of Income Tax 1, Mumbai I.T. for short under Section 263 of the Act was reversed.
At this stage, it must be numbericed that in the order dated 20th March, 2006 the learned C.I.T. arrived at findings and companyclusions in respect of issues which were number specifically mentioned in the show cause numberice dated 7th November, 2005.
Consequently, the assessment for the year 2001 2002 was set aside and a fresh assessment was ordered.
11621 OF 2009 Leave granted.
RANJAN GOGOI, J. SLP C NO.
263 Revision of orders prejudicial to revenue.
We have heard Shri Ranjit Kumar, learned Solicitor General appearing for the appellant Revenue and Shri Shyam Divan, learned Senior Counsel appearing for the respondent assessee.
Explanation Under the Act different shades of power have been companyferred on different authorities to deal with orders of assessment passed by the primary authority.
After the assessment as above was finalized, a show cause numberice dated 7th November, 2005 under Section 263 of the Act was issued by the learned C.I.T. detailing as many as eleven 11 issues grounds on which the assessment order was proposed to be revised under Section 263 of the Act.
