Uday Sinha, J.

1. This is a reference under Sec. 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 Sec. 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 Sec. 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 Sec. 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 assessees 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 assessees cash advance was plausible and could not be rejected.

5. The Revenue moved the Tribunal for a reference under Sec. 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 C