JUDGMENT
Uday Sinha, J.
1. This is a reference under Section 256(2) of the Income-tax Act, 1961, at the instance of the Revenue. In this reference, we are concerned with the assessment year 1974-75. The questions referred to us for our opinion are the following :
“1, Whether, on the facts and in the circumstances of the case, the Tribunal has rightly held that the Commissioner of Income-tax acting under Section 263(1) of the Income-tax Act, 1961, cannot interfere with the order of assessment made under Section 143(1) in pursuance of the scheme to help new taxpayers in small income groups launched by the Government ?
2. Whether, on the facts and in the circumstances of the case, the Tribunal has rightly cancelled the order passed by the Commissioner of Income-tax under Section 263(1) of the Income-tax Act, 1961, for the assessment year 1974-75 ?
3. Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in maintaining the order of the Appellate Assistant Commissioner by which he has deleted the addition of Rs. 15,000 and Rs. 1,700 ?”
2. The facts as found by the Tribunal are that the assesses is a partnership firm deriving income from sale of medicine on retail basis. The books
of the firm showed a deposit of Rs. 15,000 in the name of Bibi Zaibunnisa, wife of Samiullah, a partner of the firm. The assessee was called upon to explain the nature and source of this deposit. It was stated that it was cash credit from Mst. Zaibunnisa to the partnership firm.
3. Zaibunnisa had been assessed under the scheme propounded by the Central Board of Direct Taxes for the assessment of new and small taxpayers. Therein, she had shown income of Rs. 5,100 from pawn broking and Rs. 10,000 was her initial capital. On the return filed by her on February 28, 1973, she was assessed in terms of the scheme. Her assessment was later cancelled by the Commissioner of Income-tax in exercise of his powers under Section 263(1) of the Income-tax Act on the ground that the scheme did not apply to ladies and minors. The case of Zaibunnisa having her own capital of Rs. 10,000 having been rejected, the Income-tax Officer while assessing the present assessee rejected the case of the assessee that Zaibunnisa had advanced cash of Rs. 15,000 to the partnership firm. Zaibunnisa filed an appeal before the Tribunal against the order of the Commissioner of Income-tax. The Appellate Tribunal allowed the appeal of Zaibunnisa and set aside the order of the Commissioner.
4. The Income-tax Officer, relying upon the order of the Commissioner held that the claim of Zaibunnisa having her own capital having been rejected, the sum of Rs. 15,000 found in the books of the present assessee could not be treated as a loan from her. It was, therefore, treated as income of the firm. The assessee filed an appeal against the order of the Income-tax Officer to the Appellate Assistant Commissioner. Before the Appellate Assistant Commissioner could hear the present assessee’s appeal, the appeal filed by Zaibunnisa before the Tribunal, ITA No. 196 of 1975-76, was allowed. The order of the Commissioner of Income-tax cancelling the assessment of Zaibunnisa was set aside by the Tribunal. The Appellate Assistant Commissioner, therefore, disposed of the appeal of the assessee taking into account the fact that the claim of Zaibunnisa of being possessed of her own capital of Rs. 15,000 having been sustained by the Tribunal, the case of the assessee’s cash advance was plausible and could not be rejected.
5. The Revenue moved the Tribunal for a reference under Section 256(1) of the Income-tax Act against the order of the Tribunal allowing the appeal of Zaibunnisa. The Tribunal having rejected the application for reference to this court, a reference was called for by this court. That was the subject-matter of Taxation Case No. 323 of 1980 (See [1990] 185 ITR 284). The Revenue also filed an appeal before the Appellate Tribunal against the order of the Appellate Assistant Commissioner allowing the assessee’s claim of advance of Rs. 15,000 from Zaibunnisa. Needless to say, the Appellate Tribunal, relying upon its earlier verdict passed in the case of Zaibunnisa in ITA No. 196 of 1975-76, reiterated its views in regard to the cash advance by Zaibunnisa to the assessee in the appeal by the Revenue before the Tribunal, i.e., ITA No. 664 of 1979. The Revenue moved the Tribunal for referring a case to this court against the order passed by it in ITA No. 664 of 1979 against the assessee. The Tribunal having refused to refer a case to the High Court, the Revenue moved this court for calling for a reference. This court in terms of Section 356(2) of the Act called for the present reference. Thus, the view of the Tribunal was challenged before this court in two Taxation Cases, T. C. No. 323 of 1980 (see [1990] 185 ITR 284) and the present T. C. No. 96 of 1981. Both the cases hinged on the question whether Zaibunnisa was covered by the scheme propounded by the Central Board of Direct Taxes. The reference in the matter of CIT v. Bibi Zaibunnisa (T.C. No. 323 of 1980–[1990] 185 ITR 284) was disposed of by this court on August 21, 1989. This court did not agree with the views of the Income-tax Appellate Tribunal. It was held therein relying upon a series of decisions of this court in CIT v. Smt. Pushpa Devi [1988] 173 ITR 445, CIT v. Pushpa Devi [1987] 164 ITR 639 and CIT v. Rambha Devi [ 1987] 164 ITR 658, that the scheme did not apply to ladies and minors. Since the claim of the assessee of cash advance from Zaibunnisa rested upon the fact that Zaibunnisa had her own capital and since the assessment in that behalf has been held to be invalid by this court, the case of the present assessee also in regard to the advance must fail. For the present, the story of Zaibunnisa has been once again thrown into the melting pot. The claim of the present assessee must also be set at naught. The assessee, therefore, cannot claim advantage of the cash advance by Zaibunnisa to the assessee-firm of which her husband was a partner. The Revenue must, therefore, succeed.
6. In our view, the Tribunal was not right in holding that the Commissioner of Income-tax acting under Section 263(1) of the Act could not interfere with the order of assessment made under Section 143 of the Act in pursuance of the scheme to help new taxpayers in small income groups. In regard to the second question, our answer is that the Tribunal was not right in cancelling the order passed by the Commissioner of Income-tax. In regard to the third question, our opinion is that the Tribunal was not justified in maintaining the order of the Appellate Assistant Commissioner by which he had deleted the addition of Rs. 15,000 and Rs. 1,700. All the three questions are thus answered in the negative, in favour of the Revenue and against the assessee.
7. Let a copy of this judgment be transmitted to the Assistant Registrar, Income-tax Appellate Tribunal, in terms of Section 260 of the Income-tax Act.
S.C. Mookherji, J.
8. I agree.