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I. T. A. No. 246(PB) of 1981‑82, decided on 29th April, 1985.

‑ S. 65‑Central Board of Revenue Circular No. 8 of 1979, dated 27‑9‑1979 and Circular No. 3 of 1979 dated 13‑8‑1979‑Assess ment‑Detailed inquiry‑Fact that last assessed income of assessee was below rupees one lac not controverted ‑ Departmental repre sentative admitting that prima facie no concealment of income made‑Selection of case for detailed inquiry not made with prior approval of Commissioner of Income‑tax‑Case of assessee, held, could hot be reopened under S. 65 of Ordinance in circumstances.

Maqbool Hussain Shah, DR for Appellant.

Amir Alam Khan, FCA for Respondent.

Date of hearing: 28th April, 1985.

.‑This appeal at the instance of the department is directed against the impugned order of learned CIT (Appeals) contained in appeal No. 328, dated 28‑5‑1981. The only objection of the department relates to the fact that there was no justifica tion with the learned CIT (Appeals) to have cancelled ITO's order under section 65 of the Income‑tax Ordinance in respect of the charge year 1979‑80. 1t was accordingly prayed that order of the ITO passed under section 65 of the Ordinance may be restored by the Tribunal.

2. The assessee, a registered firm, derives income from a super market. Initially its income amounting to Rs. 38,189 was accepted under sec tion 59(I) of the Income‑tax Ordinance, 1979. Subsequently this case was re‑opened under section 65. As a result of re‑assessment proceedings income of the assessee was computed at Rs. 53,106. In appeal assessment framed by the 1T0 under section 65 of the Ordinance was cancelled by the learned CIT (Appeals) in the following words:‑

"It was maintained by the appellant that their case was covered by Circular No. 8 of 1979 dated 27‑9‑1979 could be subjected to detailed scrutiny where the last assessed income exceeded Rs. 1,00,000 and the declared income was lesser by more than 10 % of the last assessed income. Last assessed income for the assessment year 1978‑79 vide order dated 17‑6‑1979 was Rs. 53,656. Obviously this case would not be selected for detailed scrutiny under Circular No. 8 referred to above."

3. Against the cancellation of assessment made under section 65 of the Income‑tax Ordinance, 1979 the department filed a second appeal before the Tribunal requesting it to restore the order passed by the ITO.

4. After hearing representatives of both the parties it has not been possible for us to vacate the order of the learned CIT (Appeals). In arriving at this conclusion we have sought support from the facts that are mentioned hereunder.

5. It is an undisputed fact that the case of the assessee is covered by Circular No. 8 of 1979 issued by the Central Board of Revenue on 27th September, 1979, which is set out below for facility of reference:‑

"As envisaged in para. 3(V) of Circular No. 3 of 1979 dated 13th August, 1979, the Central Board of Revenue has selected the follow ing class of cases for detailed scrutiny out of the returns qualifying for self assessment scheme received upto 15th September, 1979:‑

"All cases where total income consists, of or includes income from business or profession and where the income last assessed exceeded Its. 1,00,000 and the income declared fur assessment year 1979‑80 falls short of the said last assessed by more than 10%.

6. In this case last assessed income of the assessee was RS. 53,646. This fact has not been controverted by the learned D. R. Thus last assessed income of the assesses being below Rs. 1,00,000, according to circular No. 8 of 19 9, this case could not be set apart for a detailed scrutiny. Even according to circular No. 3 of 1979, the case of the assessee could not be set apart for a detailed scrutiny according para. 6. According to para. 6 of this circular assessments completed under set assessment scheme could be re‑opened only if there is/was a prima facie case of concealment of income. The learned D. R. has admitted the fact that prima facie there was no concealment of income in this case. He has further admitted the fact that selection of this case for a detailed scrutiny was not made with the prior approval of the concerned CIT. On account of these reasons case of the assesses could not be reopened under sec tion 65 of the Ordinance. In this view of the matter by agreeing with the finding of the learned CIT (Appeals) we hereby dismiss the departmental appeal.

M. Y. H Appeal dismissed.

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