1988 (3) TMI 43 - HC - Income Tax

High Court affirms Commissioner's power to revise assessment orders under Income-tax Act

The High Court upheld the Commissioner of Income-tax's jurisdiction to revise assessment orders under section 263 of the Income-tax Act for the assessment ... Revision Issues Involved:The judgment addresses the issues related to the jurisdiction of the Commissioner of Income-tax to revise assessment orders passed under section 144B of the Income-tax Act for the assessment years 1976-77 and 1977-78.Assessment Year 1976-77:In Reference Case No. 160 of 1985, the questions raised were whether the Tribunal was justified in holding that the Commissioner acted within jurisdiction in invoking section 263 of the Income-tax Act and setting aside the Income-tax Officer's order determining the assessee's status as a company in which the public are substantially interested. Additionally, it was questioned if the subsequent order passed under section 143(3) rendered the initial order under section 143(1) non est.Assessment Year 1977-78:In Reference Case No. 174 of 1985, the sole question was whether the Tribunal was justified in holding that the Commissioner acted within jurisdiction in revising the assessment order passed on the directions of the Inspecting Assistant Commissioner under section 144B for this assessment year.The facts revealed that the Income-tax Officer had prepared draft assessment orders for both years, which were then finalized based on directions from the Inspecting Assistant Commissioner under section 144B. Subsequently, the Commissioner exercised revisional jurisdiction under section 263, citing errors prejudicial to the Revenue, particularly related to the assessee's status as a public company and substantial interest of the public.The assessee contended that the Commissioner lacked jurisdiction under section 263 as the orders were made under the directions of the Inspecting Assistant Commissioner. The Tribunal upheld the Commissioner's decision, leading to the reference before the High Court.The High Court rejected the assessee's argument, emphasizing that the orders remained those of the Income-tax Officer, even though guided by the Inspecting Assistant Commissioner's directions. The Court affirmed that the Commissioner had the authority to revise the assessments under section 263, ruling in favor of the Revenue and against the assessee.Therefore, the High Court answered all questions in the affirmative, upholding the Commissioner's jurisdiction to revise the assessment orders under section 263 of the Income-tax Act for both assessment years.