1996 (1) TMI 11 - SC - Income Tax

Commissioner's s.263 powers cover assessment items not raised on appeal; s.143(3) read with s.144B remains effective

Commissioner of Income-Tax Versus Shri Arbuda Mills Ltd.

SC held that the Commissioner's s.263 powers extend (and are deemed always to have extended) to assessment matters not considered and decided in an ... Commissioner's powers under section 263 - Order of assessment passed by the Income-tax Officer under section 143(3) read with section 144B - main contention of the assessee which was considered by the Tribunal was whether or not the order of the Income-tax Officer regarding the said three items in respect of which the assessee had no occasion to prefer an appeal had merged in that of the Commissioner (Appeals) so as to exclude the jurisdiction of the Commissioner of Income-tax under section 263 of the Act. HELD THAT:- The consequence of the said amendment made with retrospective effect is that the powers under section 263 of the Commissioner shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in an appeal. Accordingly, even in respect of the aforesaid three items, the powers of the Commissioner under section 263 shall extend and shall be deemed always to have extended to them because the same had not been considered and decided in the appeal filed by the assessee. This is sufficient to answer the question which has been referred. The question referred is, therefore, answered in the negative, in favour of the Revenue and against the assessee. The Supreme Court ruled on a case involving the merger of assessment orders under the Income-tax Act. The Court held that the Commissioner's powers under section 263 extend to matters not considered in an appeal, even with retrospective effect from June 1, 1988. As a result, the Commissioner had jurisdiction over the disputed items in the case, ruling in favor of the Revenue and against the assessee.