JUDGMENT
Jagdish Chandra, J.
1. A complaint under sections 276c-277 of the Income-tax Act, 1961 (for short “the Act”), and under sections 193/196, IPC, was made by Shri R. R.Gupta, Inspecting Assistant Commissioner of Income-tax (Assessment), Range XIV, New Delhi, against the present petitioner, Dr. R. P. Gupta, in respect of the assessment of the petitioner for the assessment year 1980-81 alleging that the petitioner had willfully attempted to evade tax, interest and penalty and had made a statement in verification, delivered an account and statement which are false, which he knew or believed to be false or did not believe the same to be true and had also fabricated false evidence for the purpose of using the same in the course of income-tax proceedings and that he dishonestly and fraudulently used that evidence in the course of the assessment proceedings which are judicial proceedings. It is alleged that after investigation, the assessment of the petitioner was completed for the assessment year 1980-81 and the net income of the petitioner was assessed at Rs. 1,77,433, vide assessment order dated March 21, 1983. It was also asserted that in the aforesaid assessment order, the petitioner had shown gross profit of Rs. 30,254 on the sales of Rs. 1,45,016 but, however, after the completion of the assessment proceedings, the gross profit of the accused was assessed at Rs. 1,12,500 resulting in an addition of Rs. 82,246.
2. The petitioner was summoned as an accused person in the complaint.
3. An application dated April 25, 1986, was made by the petitioner in the court of Smt. Manju Goel, Additional Chief Metropolitan Magistrate, praying for dropping of the proceedings against him for the reason that in the order passed on March 3, 1986, by the Commissioner of Income-tax (Appeals) on appeal, it had been declared that the petitioner had not concealed his income and that the case had been remanded for that purpose. That application was, however, dismissed by the learned Additional Chief Metropolitan Magistrate, Delhi, vide her order dated July 23, 1986. The order dated March 3, 1986, passed in appeal by Shri U. P. Singh, Commissioner of Income-tax (Appeals)-IV, New Delhi, is a brief one and is reproduced in its entirety below :
“The appeal is against the order under section 143(3) of the Income-tax Act, 1961. The appellant along with Shri U. P. Sharma appeared. The only ground is against the addition of Rs. 82,246 in the trading account. As against the receipt shown of Rs. 96,000, the Inspecting Assistant Commissioner enhanced the receipt to Rs. 2,25,000. He also estimated the gross profit at 50% on the above and added the difference between the gross profit estimated and the gross profit returned amounting to Rs. 82,246. It is pointed out by learned counsel that, first of all, there was no basis for enhancement in receipt and, secondly, the gross profit rate applied is very arbitrary and high. The Inspecting Assistant Commissioner went through the books of account and could not find the accounts fully maintained. He went through the circumstantial evidence as well as the papers available at that time with him. The appellant has produced documents now which show complete variation with the determination of the profit by the learned Inspecting Assistant Commissioner. It will be proper that these documents are looked into by the assessing authority to formulate and calculate the income accordingly. The case is set aside and referred back to him for the purpose.
4. It is pointed out by Mr. Gupta, learned counsel for the petitioner, that the only thing against him (the petitioner) in the complaint was set at naught by the aforesaid order dated March 3, 1986, as a result of which the assessment for the year 1080-81 stood set aside in view of certain new documents produced by the petitioner before the Commissioner of Income-tax (Appeals) as the same showed complete variation with the determination of the profit by the Inspecting Assistant Commissioner who was directed to look into those documents and to formulate and calculate the income accordingly. This order of the Commissioner of Income-tax (appeals) appears to have been passed under section 251(1)(a) of the Act which reads as follows :
“In an appeal against an order of assessment, he may confirm, reduce, enhance or annul the assessment; or he may set aside the assessment and refer the case back to the directions given by the Appellate Assistant Commissioner or, as the case may be, the Commissioner (Appeals) and after making such further enquiry as may be necessary, and the Income-tax Officer shall thereupon proceed to make such fresh assessment and determine, where necessary, the amount of tax payable on the basis of such fresh assessment.”
5. This order is in contradistinction to the order contemplated by subsection (4) of section 250 of the Act which reads as follows :
“The Appellate Assistant Commissioner or, as the case may be, the Commissioner (Appeals) may, before disposing of any appeal, make such further enquiry as he thinks fit, or may direct the Income-tax Officer to make further enquiry and report the result of the same to the Appellate Assistant Commissioner or, as the case may be, the Commissioner (Appeals).”
6. The order dated March 3, 1986, does not call for the report of the result of the further enquiry from the Income-tax Officer. The distinction between the two provisions of law is that whereas under section 251(1)(a), the initial assessment is set aside and is no longer alive till it is made afresh by the Income-tax Officer after compliance with the directions given by the appellate authority, under sub-section (4) of section 250, the initial assessment is not set aside and is kept alive and only the result of further enquiry is called for by the appellate authority from the assessing authority.
7. So, in the case on hand, the Commissioner of Income-tax (Appeals) set aside the assessment and directed the assessing authority to formulate and calculate the income of the petitioner afresh after taking into consideration the new documents produced by the petitioner before the Commissioner of Income-tax (Appeals).
8. It is pointed out by learned counsel for the petitioner that the appellate order dated March 3, 1986, set aside the entire assessment of the petitioner for the year 1980-81 whereas, according to Mr. Jolly, learned counsel representing the respondent, that order set aside only the determination of the profit of Rs. 82,246 by the assessing authority and not the entire assessment which included the other additions.
9. Learned counsel for the revisionist has filed a copy of the income-tax assessment/refund from (annexure “E”) for the relevant year 1980-81, prepared on March 20, 1986, and which shows on the last page (page 4) thereof that the assessment had been set aside, vide Commissioner of Income-tax (Appeals)-IV, New Delhi’s letter dated March 3, 1986. This order of the Commissioner of Income-tax (Appeals) was passed on March 3, 1986, as a result of which the aforesaid document showed the balance tax chargeable from the petitioner as “nil” and this could happen only when the entire assessment against the petitioner was set aside. This confirms the contention of the petitioner and sets at naught that of Mr. Jolly representing the respondent.
10. When the entire assessment order pertaining to the petitioner which contained objectionable items on the basis of which the complaint was lodged by the respondent against the petitioner was set aside in its entirety, vide order date March 3, 1986, passed by the Commissioner of Income-tax (Appeals)-IV, New Delhi, the respondent is now left with no basis or material on the basis of which he can prosecute the petitioner regarding that complaint. It is an entirely different proposition that when the fresh assessment regarding the income of the petitioner is made in compliance with the directions made in the order dated March 3, 1986, and if something objectionable pertaining to the same against the petitioner is detected, there would be no impediment in the way of the respondent in filing a fresh complaint, if so advised, against the petitioner, but as at present, the entire substratum of the present complaint having been taken away by the setting aside of the assessment order, the present complaint cannot continue and has to be quashed and in this view of the matter, the impugned order dated July 23, 1986, passed by Smt. Manju Goel, Additional Chief Metropolitan Magistrate, Delhi, being erroneous cannot be allowed to stand. If, in support of this proposition, any authority is needed, the same is furnished by a decision of this court in W. L. Kohli v. CIT [1985] 152 ITR 154.
11. In view of the above discussion, the impugned order dated July 23, 1986, of the learned Additional Chief Metropolitan Magistrate is set aside and the complaint at present pending against the petitioner as also all the subsequent proceedings therein are quashed.
12. Petition allowed.