Ita/158/2005 Of Comnr.of Incometax v. Katapani

ITA No. 158 of 2005 4 30.10.2015 Heard Shri Acharya, learned Standing Counsel, Income Tax Department. Challenge in the present appeal has been to the order dated 31.7.2003 passed by the Commissioner of Income Tax (Appeals), Bhubaneswar in I.T. Appeal of 200-2003 for the block period 1991-92 to 2000-01. The admitted facts in the present case are that a search and seizure operation had taken place at the business premises of the assessee on 18.8.2000. Certain books of accounts were seized apart from cash of Rs.22,164/-. In pursuance to the notice issued under section 158BC, block return was filed by the a ssessee on 3.7.2002 showing a total undisclosed return of Rs.3,89,494/-. Thereafter it appears that the assessing officer sent a questionnaire to the assessee requesting for the details in connection with the seized documents. Admittedly the assessee was a dealer of Indian made foreign liquor. The seized books comprises, incomplete purchase and stock registers. No sales registers or sales memos were found in the business premises of the assessee on the date of search. The assessing officer in course of the assessment order found that the documents found during search and seizure were incomplete in nature from which the exact figure of the income of the assessee could not be drawn and based on such assessment, the assessing officer estimated the sales on the basis of cost of goods sold and ultimately determined the the income of the assessee chargeable to income tax at Rs.14,07,763/-. Being aggrieved by the aforesaid order passed by the assessing officer, the assessee preferred First Appeal before the Commissioner of Income Tax (Appeals), Bhubaneswar in I.T. Appeal of 2002-03 which was allowed by order dated 31.7.2003 with the following directions. 4.11 I am, therefore, of the considered opinion that it was a fit case where the returned income should have been accepted and no addition was called for. The additions made, as discussed above, have no basis in relation to the search and seizure operation and hence, deserve to be deleted. The Revenue preferred an appeal before the Income Tax Appellate Tribunal, Cuttack Bench, Cuttack in I.T.A. No. 34(CTK)/2003 which was disposed on 13.5.2005 dismissing the appeal preferred by the Department. On perusal of the order of assessment, First Appellate order as well as the order passed by the Tribunal, we find that the Tribunal confirmed the order passed by the C.I.T. (Appeals), Bhubaneswar and came to hold that under chapter XIV-B, the scope of assessment is of a special procedure and the assessment is to be made basing on such finding. In the instant case, since no incriminating material apart from the incomplete books of accounts, the assessing officer had no authority under law to estimate the income other than by based judgment on books of accounts or incriminating documents. Shri Acharya contended before this Court that the First Appellate authority directed deletion of additions made by the assessing officer and instead of remitting the matter to the assessing officer for reassessment in accordance with law. We find that the order of the C.I.T. (Appeals), Bhubaneswar, the First Appellate Authority under section 251 of the Act, the C.I.T. (Appeals), Bhubaneswar in the matter of appeal against the order of assessment, may confirm, reduce, enhance or annual the assessment. Consequently this provision came in by way of an amendment of 2001. It is relevant to take note of the fact that under section 251(1)(a), the words or he may set aside.. came to be deleted by Finance Act, 2001 w.e.f. 1.6.2001. Consequently we find no merit in the contention advanced by the Department inasmuch as the order of the First Appellate authority was dated 31.7.2003, i.e., post amendment. Therefore, there was no provision for the C.I.T. (Appeals), Bhubaneswar to aside the order assessing officer and remit the matter for fresh assessment. In view of the aforesaid facts and the fact that the order of the C.I.T. (Appeals), Bhubaneswar has been confirmed by the Tribunal, we find no justification on question of law which arise for consideration in the present case. Accordingly the writ petition stands rejected. ... I. Mahanty, J. .. Dr. D.P. Choudhury, J. dutta