Revisional jurisdiction under section 263 and extra shift allowance determined by actual shift working of the entire concern.

Section 263 revisional power extends to an assessment made under section 125A, so the Commissioner is not barred from revising such an order. The power is also not excluded merely because part of the assessment was already the subject of appellate scrutiny. On extra shift allowance, entitlement depends on the concern's actual double or triple shift working during the relevant period, not on whether each individual plant or machinery so worked. The revisional points were answered in favour of the Revenue, while the extra shift allowance issue was answered in favour of the assessee.

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Issues: (i) Whether the Commissioner of Income-tax had jurisdiction under section 263 of the Income-tax Act, 1961, to revise the assessment order passed in pursuance of section 125A of the Income-tax Act, 1961. (ii) Whether the Commissioner of Income-tax could revise that part of the assessment order which had not formed the subject-matter of appeal before the appellate authorities. (iii) Whether extra shift allowance was allowable in respect of plant and machinery on the basis of double and triple shifts worked by the entire concern.

Issue (i): Whether the Commissioner of Income-tax had jurisdiction under section 263 of the Income-tax Act, 1961, to revise the assessment order passed in pursuance of section 125A of the Income-tax Act, 1961.

Analysis: The issue was governed by earlier binding authority holding that the revisional power under section 263 extends to an assessment made by the Inspecting Assistant Commissioner acting under section 125A.

Conclusion: The question was answered in favour of the Revenue and against the assessee.

Issue (ii): Whether the Commissioner of Income-tax could revise that part of the assessment order which had not formed the subject-matter of appeal before the appellate authorities.

Analysis: The governing principle was that the Commissioner's revisional jurisdiction is not excluded merely because the assessment order, or a part of it, was the subject of appellate scrutiny.

Conclusion: The question was answered in favour of the Revenue and against the assessee.

Issue (iii): Whether extra shift allowance was allowable in respect of plant and machinery on the basis of double and triple shifts worked by the entire concern.

Analysis: The allowance was held to depend on the number of days on which the concern actually worked double or triple shift, rather than on whether a particular item of plant or machinery so worked during the previous year.

Conclusion: The question was answered in favour of the assessee and against the Revenue.

Final Conclusion: The reference was answered by upholding the revisional jurisdiction under section 263 on both jurisdictional questions, while sustaining the assessee's claim for extra shift allowance on the basis of the entire concern's actual shift working.

Ratio Decidendi: Section 263 revisional power can extend to matters assessed under section 125A and is not confined by the fact that part of the assessment order has been subject to appeal, while extra shift allowance is determined with reference to the concern's actual double or triple shift working as a whole.

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