P. I. MOHANSINGH, J. M.: Order This appeal of assessee relates to asst. yr. 1977-78 and arise out of order of CIT, Jabalpur, dt. 29th March 1985, passed under s. 263 of IT Act, 1961. 2. proceedings which had been earlier started by ITO by order under s. 146 of IT Act, 1961, were filed by him by order-sheet entry dt. 31st March 1983. Th aforesaid order-sheet entry of ITO was treated by CIT as on order and aforesaid order of ITO filing proceedings was found to be erroneous and prejudicial to interests of re venue by CIT for following reasons : "The assessment for asst. yr. 1977-78 was completed by ITO on 30th Sept., 1980 under s. 144. assessee applied for reopening of said assessment under s. 146. ITO repented assessment vide his order dt. 12th Jan. 1981 under s. 146. reopened assessment vide his order dt. 12th Jan., 1981 under s. 146. reopened proceedings under s. 146 was filed by ITO on 31st March 1983. Failure on part of ITO to take proceedings in accordance with provisions of s. 143 of IT Act rendered his order of filing proceedings erroneous and prejudicial to interest of Revenue. notice dt. 22nd March 1985 was served on assessee to show-cause w h y suitable orders may not be passed under s. 263 of IT Act. opportunity of being heard was given to assessee by fixing hearing date on 29th March 1985. On receipt of show-cause notice counsel for assessee appeared before CIT and main contention of ld. counsel is that ITO s inaction to proceed with assessment or his not taking up assessment proceedings does not amount to order and his inaction to proceed with assessment is not survived by any subsisting or existing order which can give rise to CIT in invoking provisions of s. 263. Since ITO has not initiated assessment proceedings, order-sheet entry passed by ITO dt. 31st March 1983 cannot be termed as order and, therefore, CIT has no power to invoke jurisdiction under s. 263. After hearing ld. counsel for assessee CIT, following decision of Punjab and Haryana High Court in case of CIT vs. Damyanti Mehta & Yash Raj Mehta (1972) 83 ITR 502 (P&H) held that order sheet entry made by ITO dt. 31st March 1983, is order and since this order is erroneous and prejudicial to interests or revenue, he set aside same with directions of ITO to pass fresh order computing total income property after proper enquiry. As against this order of CIT, assessee is in appeal before us. 3. ld. counsel for assessee reiterated contentions made before CIT. He further contended before us that mere order sheet entry made by ITO dt. 31st March 1983 cannot be treated as assessment order passed by ITO as assessment records were not before him to apply his mind to return of income filed by assessee. He took support from same decision, namely, decision relied upon by CIT, reported in (supra) in support of his case and contended that since ITO has not applied his mind, filing of proceedings by ITO cannot be treated as order and since seam is not order, CIT cannot exercise jurisdiction under s. 263. 4. ld. Departmental Representative merely supported order of CIT. 5 . We have carefully considered facts and circumstances of case and arguments advanced by both sides. extract of order sheet entry made by ITO dt. 31st March 1983 reads as under : "As per ITO s Control Register, there is pendency of assessment for asst. yr. 1977-78, reopened under s. 146 on 12th Jan. 1981. Th limitation subsists upto 31st March 1983. However, case records are not traceable. case h s been received on transfer from ITO, Rajandgaon. proceedings are therefore, filed. Action under s. 263 shall be taken after searching case records. Sd- ITO 31st March 1983" aforesaid order-sheet entry was treated by CIT as order passed by ITO relying upon decision of Punjab and Haryana High Court in case of CIT vs. Damyanti Mehat and Yash Raj Mehta (supra). facts and decision given by Their Lordships of Punjab & Haryana High Court in aforesaid case are as under : "The ITO, who had completed assessment of assessee for asst. yr. 1960-61, having come to know of sale of factory of assessee on 1st Sept. 1959 though that there was considerable profit in transaction and issued notice under s. 34(1) (a) of IT Act, 1922, for asst. yr.1960-61. assessee filed objection that sale had in fact been nullified owing to certain circumstances and as such there was no sale. This objection was accepted by ITO and he drooped proceedings by his order "proceedings filed" made on 28th Feb., 1963. CIT acted under s. 33B and cancelled order of ITO filing proceedings and directed him to continue proceedings under s. 34(1) (a). On appeal against this order, Tribunal held that order of ITO filing proceeding amounted to order of assessment or assessment and, therefore, no proceeding could be instituted under s. 33B by CIT. On reference : Held, that in every case it has to be determined on facts and circumstances thereof as to whether words "proceedings filed" do or do not amount to order of assessment or reassessment. In present case words "proceedings filed" clearly amounted to order of reassessment. ITO clearly stated on 27th Feb. 1963, that assessee s letter was seen and "proceedings to be filed", and on 28th Feb., 1983, proceedings were in fact filed. It clearly discloses that ITO did apply his mind and came to conclusion that there was no sale of 1959 and there was nothing else he could do but close those proceedings by reassessment order. Consequently, CIT was precluded from revising order by reason of .s 33B (2) (a) of Act. 6 . In our opinion, CIT has not properly appreciated facts and decision given by Punjab and Haryana High Court before applying same to facts of this case. important test that is laid down by Their Lordships of Punjab & Haryana High Court to find out whether words "proceedings filed" amount to order of assessment or re-assessment is that ITO should have applied his mind, in assessment proceedings before him. In aforesaid case ITO reopened assessment under s. 34(1) (a) after having come to know of sale of factory of assessee on 1st Sept. 1959, for purpose of taxing profit earned by assesses in transaction. After having received reply from assessee for notice issued by him that there was no such sale, ITO dropped proceedings which had reopened under s. 34(1) (a) by using words "proceedings filed". This order of ITO was held to be order of re-assessment by Their Lordships of Punjab and Haryana High Court as ITO has applied his mind before filing proceedings. 7. Now, coming to facts or case under consideration before us, first of all it may be mentioned that predecessor ITO no doubt reopened assessment by his order dt. 12th Jan. 1981 under r. 146 of IT Act, successor ITO filed proceedings on ground that records are not traceable. This action was taken by successor ITO in view of fact that Limitation for assessment subsets only upto 31st March 1983. When we examined reason given by ITO for filing proceedings, it is clear that ITO has not applied his mind to assessment proceedings which were reopened by predecessor ITO under s. 146. Further last sentence in order-sheet clearly indicates that ITO has filed proceedings merely to give handle to CIT to take action under s. 263. Since ITO has not applied his mind before filing proceedings, order-sheet entry made by ITO on 31st March 1983 which is last day of limitation for assessment to be made in this case, cannot be treated as order passed by ITO. When once we hold that order sheet made by ITO is not order, CIT has no power to exercise jurisdiction under s. 263 as same is not order muchless assessment order. We, therefore, quash order of CIT passed under s. 263 and appeal filed by assess is accordingly allowed. *** ASHOK KUMAR AJMANID v. INCOME TAX OFFICER