ORDER SALEEM ASGHAR MIAN, ACCOUNTANT MEMBER.- These are two cross appeals relating to the assessment year 1990- 91.
2. The department has challenged the order of the CIT (Appeals) dated 3.9.1991 on the assessment framed u/S. 62 for the assessm ent year 1990-91. The original assessment had been framed on 30.1.1991 at net income of Rs. 207,200/- which was reduced to Rs. 158,200/- after giving appeal effect to the CIT (Appeals) order. The Department, however, reopened the assessment proceedings under Sections 65 and subsequently an order was passed u/Ss. 65/62 on 7.2.1993. In the event as the assessm ent has been made subsequent to the appeal filed, and taking into consideration the finding of the CIT (Appeals) the appeal becomes infructuous and is dismissed.
3. For the assessm ent year 1990-91 the assessee has filed an appeal against the order of the CIT (Appeals), Gujranwala in setting aside the assessment framed u/S. 65/62. During the course of proceedings for the charge year 1991-92, the assessing officer had found that an amount of Rs.
104,200/- had been paid in advance for opening LCS and the said amount had not been shown in the wealth statement for the period ending 30.6.1990 relating to the assessment year 1990-91. A show cause notice was, therefore issued and as no reply to the notice was received, the case was re-opened and a notice u/S. 65, was issued on 3.10.1992. The assessing officer after rejecting the reply of the assessee to the notice added a sum of Rs. 104,200/- u/S. 13(l)(d) to the income already assessed after prior approval of IAC. Before the learned CIT (Appeals), this was vehemently contested as having been made illegally and without providing a reasonable opportunity to the assessee of being heard. The CIT (Appeals) found on perusal of the record that no notice u/S. 13(l)
(d) read with section 13(2) had ever been issued to the assessee. He also found from the record that the IAC Range-I, Gujranwala vide his letter No. 616, dated 1.2.1993 had granted approval u/S. 13(l)(b) where the assessm ent has been made by making the addition u/S. 13(l)(d) for which no approval was granted by the IAC concerned. He also held that the addition was not sustainable in the eyes of law for these reasons but however set aside the assessment for de novo proceedings.
It has been bitterly contested that this action was not proper as once the CIT(A) had found the order illegal, he should not have set aside the same but conceded or annulled it. The learned DR agitated that the omission made by the Department should be over-looked and the CIT(A)'s action be maintained. We however, do not agree with this view. The addition u/S. 13(l)(d) had been made without approval of the IAC and without confronting the assessee and has rightly been held by the CIT(A) that the same is not sustainable in the eyes of law. He, therefore, held that the illegal action made be deleted.