2008 (6) TMI 595

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....nder section 263 of the Act, is quashed. 2. Heard learned counsel for the parties. 3. The question of law involved in the appeal is as under:- "Whether Income-tax Appellate Tribunal has erred in law in quashing the order passed by CIT under section 263 of Income-tax Act, 1961 and is there any illegality in the order of the CIT directing the Assessing Officer to make assessment de novo after giving the opportunity to the assessee." 4. Brief facts of the case are that M/s. Kwality Hardware Agencies (respondent/assessee) deals with hardware items. It submitted its return of income for the assessment year 2001-02, showing a total income of Rs. 5,67,479. However, the Assessing Officer, after giving notice completed the assessment under sect....

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....s correct by the Assessing Officer after assessing the income at Rs. 6,13,310 under section 143(3) of the Act. Learned counsel for the appellant further contended that in the circumstances of the case the CIT has rightly exercised its powers under section 263 of the Act and the ITAT has erred in law in quashing the order passed by CIT. 6. On the other hand Sri S.K. Posti, learned counsel for the respondent/assessee referring to the cases of CIT v. Smt.D. Valliammal [1998] 230 ITR 695 (Mad.) and CIT v. Gabrial India Ltd. [1993] 203 ITR 1081 (Bom.) argued that for invoking jurisdiction under section 263 of Income-tax Act, 1961, the following twin conditions must be satisfied: (i) the order passed by Assessing Officer is erroneous; (ii) and s....