TaxTMI 
TaxTMI 
2009 (10) TMI 327
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....with the decision of the Supreme Court in Union of India v. A. Sanyasi Rao [1996] 219 1TR 330. 2. The appellant-assessee was engaged in arrack business during the previous year relevant for the assessment year 1992-93. Even though profit and loss account filed along with the income-tax returns showed net income of Rs. 10,53,607 the assessee returned income from arrack business only at Rs. 5,25,645, which was income assessable under section 44AC of the Income-tax Act, 1961. The assessment was completed ignoring the higher income shown in the profit and loss account as income from arrack business, but by accepting the income under section 44AC of the Act. The original assessment was completed on February 7, 1995. The assessee filed appeal ....
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.... 2000, directing revision of assessment on income from arrack business based on income disclosed in the profit and loss account and in terms of declaration of law by the Supreme Court in A. Sanyasi Rao's case [1996] 219 ITR 330 above referred to. Even though statutory appeal was available against section 263 order, the assessee approached this court in writ proceedings contending that the order is without jurisdiction mainly because it is time barred. The learned single judge upheld the order both on the merits as well as on the question of limitation raised by the appellant. This appeal is against the said judgment and we have heard Sri P. Balakrishnan, counsel appearing for the appellant and standing counsel appearing for the respondent. ....
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....n February 7, 1995. On the other hand, standing counsel appearing for the respondent contended that suo motu revision power under section 263 should be considered with reference to revised order issued based on orders in appeal, if the issue raised by the Commissioner under section 263 was not raised or considered by the appellate authority. In this particular case, the specific case of the Department is that the Commissioner (Appeals) had in fact set aside the original assessment in appeal and so much so, there was no order available to the Commissioner for revision under section 263 until the officer revised the assessment. According to the standing counsel, revised assessment was issued by the Assessing Officer on March 6, 1998, without ....
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....her, if the Assessing Officer had taken note of the judgment of the Supreme Court he himself could have corrected the mistake in the revised assessment either by invoking the power under section 154 or by resort to section 147. Secondly, the Commissioner in exercise of his jurisdiction under section 263 can revise the assessment found to be prejudicial to the interests of the Revenue within two years from the end of the financial year in which such order is passed. In this case, the order sought to be revised was set aside in appeal; by the first appellate authority for redoing the assessment with specific reference to the issues raised in the appeal. In fact it is pertinent to note that under section 251(1)(a) the Commissioner (Appeals) ha....
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....section 147 to correct his own mistakes in the original assessment so that revised order issued by him consistent with the orders in appeal will be an order not prejudicial to the interests of the Revenue. It is only when the first appellate authority omits to correct orders prejudicial to the interests of the Revenue and only if the Assessing Officer also fails to correct his mistakes in the original assessment while issuing revised orders giving effect to the order in appeal, the Commissioner needs to exercise his supervisory jurisdiction under section 263 of the Act and so much so the Commissioner has jurisdiction to revise the revised assessment on matters concluded by the Assessing Officer in the original assessment which are again inc....