Anil Kumar Sunil Kumar Naik vs Income Tax Officer and Another

Arun Mishra, J.—The present appeal has been filed by the assessee u/s 260A of the Income Tax Act, 1961. The appellant is a partnership firm, dealing in gold and silver ornaments and money-lending at Seoni. For the assessment year 1993-94 return was filed declaring the income as nil, as the payment of interest and salary to the partners was in excess of the profit- A revised return was filed declaring a total income of Rs. 1,32,506. The appellant had valued the excess closing stock of silver weighing 35.713 kgs. at Rs. 1,75,000. It was added as income in the aforesaid return. There was a survey in the business premises of the appellant on March 22, 1992, according to which excess stock of Rs. 1,71,000 was found which was surrendered by the firm and it was in these circumstances that a revised return was filed on March 3, 1994. The appellant claimed Rs. 72,000 payable to the partners of the firm which was allowed by order dated January 2, 1996, passed by the Income Tax Officer, Seoni. The matter was taken up in suo motu revision by the Commissioner of Income Tax, Jabalpur. It was held therein that the income added at Rs. 1,75,000 did not constitute income from business and since the Income Tax Officer allowed the claim of the appellant, the order of the Income Tax Officer was erroneous and prejudicial to the interests of the Revenue. It required revision u/s 263 of the Income Tax Act, and hence directions were issued that the original order passed on January 2, 1996, be cancelled and an assessment should be made de novo. During the course of proceedings u/s 263 of the Income Tax Act, a notice was issued by the Commissioner of Income Tax. According to the notice, the salary paid to the partners was put at Rs. 29,506 and the amount claimed at Rs. 72,000 as per the revised return constituted an error and it was proposed to be disallowed. Notice dated September 30, 1997, was issued which was challenged in appeal before the Income Tax Appellate Tribunal, Jabalpur, and disallowance of Rs. 42,494 was also challenged. The Income Tax Appellate Tribunal rejected the appeal and held that the Commissioner of Income Tax was justified in cancelling the assessment and directing the Assessing Officer to make the same de novo and while making de novo assessment, the Assessing Officer would pass a speaking order and the appellate authorities are also at liberty to adjudicate the issue involved. Therefore, the Income Tax Appellate Tribunal declined to interfere in the appeal filed before it. Thus, the order dated January 28, 2000, passed by the Income Tax Appellate Tribunal, has been assailed in the present appeal.

We find from a perusal of the order passed by the Income Tax Appellate Tribunal that the final adjudication has not been made and the matter has to be considered de novo by the Assessing Officer and with respect to the Commissioner of Income Tax, appellate authority, it has been observed by the Tribunal that the appellate authority is at liberty to adjudicate the issue involved as well as the Assessing Officer.

In view of the observations made by the Income Tax Appellate Tribunal, we are not inclined to enter into the merits of the matter in the present appeal. No substantial question of law is involved in the present appeal. The same is dismissed in limine.