Law:

Section:

Section 263 of the Income-tax Act, 1961 - Revision - Of orders perjudicial to interests of revenue - CBDT launched scheme to encourage those assessees whose assessable income did not exceed Rs. 15,000 and borrowed capital did not exceed Rs. 25,000 - Assessments of such assessees were to be completed under section 143(1) - Said scheme contained rider that returns tiled in names of minors and ladies were not to be accepted without proper enquiries - Assessee-lady filed return under said scheme showing investment of Rs. 12,000 and income of Rs. 5,100 - ITO completed assessment under section 143(1) in terms of said scheme on basis of brief stereotyped report by inspector omitting vital relevant details - Commissioner proceeding under section 263, set aside ITO's order as being erroneous and prejudicial to revenue and directed ITO to make fresh assessment after proper enquiry - Whether Tribunal was correct in holding that ITO's orders were not erroneous so as to enable Commissioner to assume jurisdiction under section 263 and that Commissioner's order was mechanical, based on surmises and conjectures, violative of natural justice and not valid in law - Held, no FACTS The CBDT launched a new scheme to encourage new assessees in small income groups to furnish their return of income voluntarily. The scheme covered assessees where the borrowed capital did not exceed Rs. 25,000 and the returned income did not exceed Rs. 15,000. The assessments of assessees falling within the said two limits of the scheme were to be made in terms of section 143(1). There was, however, a rider in the scheme that returns filed in the names of the minors and ladies were not to be accepted without proper inquiries. For the assessment years 1972-73 and 1973-74, the assessee-lady filed a return showing investment capital of Rs. 12,000 and an income of Rs. 5,100. The inspector submitted a brief, stereotyped report omitting vital relevant details concerning the capital and income of the assessee. Relying on this report, the ITO assessed the assessee straightaway under section 143(1) in terms of the aforementioned scheme. The ITO also passed similar orders in case of all the minors and ladies who…

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