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

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 ... Merger of Assessing Officer's order into Commissioner (Appeals) order - Jurisdiction of Commissioner under section 263 - Retrospective expansion of Commissioner's powers by Explanation (c) to section 263Merger of Assessing Officer's order into Commissioner (Appeals) order - Jurisdiction of Commissioner under section 263 - Retrospective expansion of Commissioner's powers by Explanation (c) to section 263 - Whether the assessing officer's order in respect of three items had merged in the Commissioner (Appeals) order so as to exclude the jurisdiction of the Commissioner under section 263. - HELD THAT: - The Court considered the effect of the retrospective amendment (by the Finance Act, 1989) to section 263, in particular the Explanation which declares that the Commissioner's powers shall extend, and be deemed always to have extended, to matters which had not been considered and decided in an appeal. The three items in dispute were not the subject-matter of the appeals filed by the assessee and therefore had not been considered and decided in the appeal. Consequently, by virtue of the Explanation, the Commissioner's powers under section 263 extended to those items and were not ousted by any supposed merger of the assessing officer's order into the appellate order. The statutory provision thus resolved the contention that non-appealed items acquired immunity from revision under section 263.The order of the Assessing Officer in respect of the three items did not merge so as to exclude the Commissioner's jurisdiction under section 263; the Commissioner's power extended to those matters.Final Conclusion: The reference is answered in the negative: the Commissioner's jurisdiction under section 263 extended to the three items not considered in the appeal, and the challenge on merger is rejected 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.