2012 (7) TMI 946 - HC - Income Tax

Court upholds Tribunal decision on Income Tax Act assessment order validity for AY 2006-07.

The appeal challenged the Tribunal's decision on the validity of an assessment order under Section 263 of the Income Tax Act for Assessment Year 2006-07. ... Revision u/s 263 - Held that:- CIT has no jurisdiction as a precondition for exercising power under Section 263 viz., the order is erroneous and it is prejudicial to the interest of the revenue were not satisfied. When the learned Tribunal found that it is neither erroneous nor prejudicial to the interest of the revenue this Court does not find any substantial question of law involved in this matter. If this matter is admitted for hearing this Court has to re-assess the fact finding of the order passed by the Assessing Officer which cannot be done by this Court in exercise of jurisdiction in this matter under Section 260A of the Income Tax Act. Issues involved:Appeal against Tribunal's judgment on the validity of the assessment order under Section 263 of the Income Tax Act for Assessment Year 2006-07.Analysis:The appeal sought to challenge the Tribunal's decision regarding the validity of the assessment order for Assessment Year 2006-07 under Section 263 of the Income Tax Act. The main point of law raised was whether the Tribunal was correct in holding that the assessment order was not erroneous and prejudicial to the revenue's interest, thus rendering the Commissioner of Income Tax's order under Section 263 invalid. The Tribunal's decision was based on a thorough examination of the facts, where it was found that the assessee had provided complete details and documentation during the assessment process. This included names, addresses, share details, cheque information, and responses to Section 133(6) notices. The Tribunal noted that the Assessing Officer had all necessary information before finalizing the assessment under Section 143(3) of the Act, leading to the conclusion that the order was not erroneous.Furthermore, the Tribunal referred to the Supreme Court decision in the case of Malabar Industrial Co. Ltd. vs. CIT, emphasizing that the assessment order was neither erroneous nor prejudicial to the revenue's interest. As a result, the Tribunal did not identify any substantial question of law in the matter. The Court highlighted that re-assessing the facts determined by the Assessing Officer would be beyond its jurisdiction under Section 260A of the Income Tax Act. Consequently, the Court dismissed the appeal, stating that no costs were to be awarded to any party. All parties were instructed to act upon a xerox signed copy of the order as per usual undertakings.