COMMISSIONER OF INCOME TAX vs. KALPANABEN ISHWARLAL

To be referred to the Reporter or not? : NO

Whether Their Lordships wish to see the fair copy : NO of the judgement?

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

Whether it is to be circulated to the Civil Judge? : NO -------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus KALPANABEN ISHWARLAL -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 176 of 1989 MR TANVISH BHATT for Petitioner No. 1 SERVED BY RPAD - (N) for Respondent No. 1

We have heard Mr Tanvish Bhatt, learned standing counsel for the revenue. Though served, none appears for the respondent-assessee.

The assessee is an individual. For the assessment year 1983-84, the assessee filed her return of income on 29.9.1983 at Rs.20,010/-. The Income-tax Officer accepted the return and made the assessment under Section 143(1) of the Act. However, on perusal of the record of the assessment in the case of the assessee for the year under consideration, the Commissioner of Income-tax noticed that the assessee had filed her return of net wealth for the first time for the assessment year 1983-84 on 29.9.1983 showing gold ornaments weighing 328 grams valued at Rs.30,000/-. The assessee had claimed that the said gold ornaments were received by her at the time of her marriage. The Commissioner of Income-tax noticed that there had been a search under Section 132 of the Act at the residential premises of Bharatkumar Ishwarlal, brother of the assessee on 19.3.1983. It was after the said search that the assessee had filed her return of wealth on 29.9.1983 showing the said ornaments as belonging to her. The Commissioner found that the Income-tax officer had not conducted any enquiry into the source of acquisition of gold ornaments by the assessee as shown by her wealth-tax returns and, therefore, the assessment order as passed by the Income-tax officer under Section 143(1) without conducting necessary enquiry was erroneous in as much as the same was prejudicial to the interest of the revenue. The Commissioner of Income-tax has, therefore, invoked his jurisdiction under Section 263 of the Act and after hearing the assessee and feeling not satisfied with the explanation offered by the assessee, set aside the assessment made by the Income-tax Officer and directed him to reframe the same according to law.

In second appeal, the Tribunal held that the Commissioner could not have taken action under Section 263 of the Act in the case of the assessee on the basis of the records in the cases of other persons, no matter how closely they were related to the assessee. Holding thus, the Tribunal set aside the order of the Commissioner. Hence, this reference at the instance of the revenue.

At the hearing of this reference today, Mr Tanvish Bhatt, learned standing counsel for the revenue has invited our attention to the decision of the Supreme Court in Commissioner of Income-tax vs. Shree Manjunathesware Packing Products and Camphor Works,

Following the aforesaid decision, we are of the view that thee is nothing in the provisions of the Income-tax Act, 1961 particularly section 263 of the Act or in the aforesaid pronouncement of the Apex Court which would require us to accept the narrow view which appealed to the Tribunal that the record must be of the assessee concerned and that the Commissioner had no power, jurisdiction and authority to take action under Section 263 of the Act in case of the assessee on the basis of the records in the cases of other persons.

The reference accordingly stands disposed of with no order as to costs.