TaxTMI 
TaxTMI 
2016 (5) TMI 934
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....s notice regarding the investment made not for business purpose, advances given for capital assets not put to use and incomes not declared. Since in the resultant order by the Commissioner of Income Tax under section 263 of the Act, no adverse inference with regard to incomes not declared, has been taken, we will not be referring to the same. 3. With regard to the investments made not for business purpose, the learned Commissioner of Income Tax was of the opinion that the assessee is a partner in M/s Friends Colonizers , the income earned in the form of share profit would be exempt from taxation under section 14A of the Act. Therefore, the interest and other expenses in relation to capital invested in the firm have been incurred by the assessee for earning tax free income from the firm. The Assessing Officer completely failed to examine the case of disallowance under section 14A of the Act from this angle as no enquiry or verification in this regard was made by him. With regard to advance given for capital assets not put to use, the learned Commissioner of Income Tax was of the opinion that an amount of Rs. 110.20 lacs was given to M/s JMD Ltd. as advance for booking of office, wh....
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....dated 29.12.2008 suffers from errors and thus, rendering the same to be prejudicial to the interest of the revenue. 2. That he was not justified to set aside the order without fulfilling the twin condition as laid down in Section 263. 3. That he failed to appreciate that the assessment order had already merged into the order of Ld. Commissioner of Income Tax (Appeals)-ll, Ludhiana in which both the issues i.e. relating to section 36(1)(iii) and 14A were a subject matter of dispute." 7. The learned counsel for the assessee at the outset stated that the learned Commissioner of Income Tax did not have jurisdiction under section 263 of the Act as the issues raised by him have already been dealt with by the CIT (Appeals) and the order of the Assessing Officer having been merged with the order of the CIT (Appeals), the learned Commissioner of Income Tax cannot invoke his jurisdiction under section 263 of the Act. With regard to issues on merit, the submissions made before the learned Commissioner of Income Tax were reiterated. 8. The learned D.R. stated that the Assessing Officer made enquiries and addition was made under section 14A of the Act on a different aspect limited to t....
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....sued to the assessee which is undisputably dated 27.8.2012. The order under section 263 of the Act is passed as on 21.3.2013. However, it is also to be noticed that the order of the CIT (Appeals) was passed as on 21.12.2012. The issues before the CIT (Appeals) were that of sections 14A and 36(1)(iii) of the Act. At the time of issue of notice under section 263 of the Act, the order of the CIT (Appeals) was not available to the Commissioner of Income Tax, as the same was passed on a later date. We cannot say that at the time of issuing notice under section 263 of the Act, the assumption of jurisdiction under section 263 of the Act did not lie with the Commissioner of Income Tax. However, it is seen thereafter that before passing the order under section 263 of the Act, the order of the CIT (Appeals) had arrived and was also brought to his notice by the assessee in his reply. From this chronology, we infer that the learned Commissioner of Income Tax has correctly assumed jurisdiction under section 263 of the Act as on 27.8.2012. The decision of the Hon'ble Supreme Court in the case of CIT Vs. Amrit Lal Bhogi Lal, 34 ITR 130 established that it would be open to the Commissioner of ....
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....he Commissioner of Income Tax in his jurisdiction under section 263 of the Act. In the present case, it is a fact on record that the issues of disallowance under sections 14A and 36(1)(iii) of the Act were raised by the Assessing Officer during the assessment proceedings and disallowances under respective heads were made by him. These disallowances were challenged by the assessee before the CIT (Appeals), which got dismissed by him. 15. The term used in the Explanation to Section 263 of the Act is "matters" which have been subject of appeal. Therefore, the "matters" which have already been dealt with by the CIT (Appeals) cannot be the issues to be taken up for revision under section 263 of the Act. Now the question before us is whether the disallowance made by the Assessing Officer and confirmed by the CIT (Appeals) with respect to sections 14A and 36(1)(iii) of the Act were "matters" or as contended by the learned D.R., the same were considered by them to an extent but not to the extent as stated by the Commissioner of Income Tax in his order under section 263 of the Act. The disallowance under section 14A of the Act though has been considered by the Assessing Officer as well as ....
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....tion in the facts and circumstances of this case under Section 263 of the Act. Now, it is well settled that before an appeal before the AAC certain orders are appealable. It is also well settled that in an appeal preferred before the AAC the whole assessment is open for review by the AAC. He is both the appellate as well as the adjudicating authority. But his jurisdiction is limited to the appeal preferred before him. There are certain orders which are not appealable before the AAC but certain types of allegations can be taken up in an appeal by separate appeals. Apart from those two cases if an assessment is the subject- matter of appeal then any ground which was held in favour of the assessee can also be held against him though the appeal was preferred by the assessee. This jurisdiction of the AAC is indisputable. In this case the question is whether the quantum of allowance or disallowance or depreciation was the subject-matter of appeal or not. It is true that whether depreciation should be calculated on the basis of 12 months or it should be calculated on the basis of 11 months was not a specific aspect which was agitated before the AAC nor did he give any direction on this as....
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....d 36(1)(iii) of the Act having been dealt by the CIT (Appeals), the order of the Assessing Officer, to that extent merges with the order of the CIT (Appeals). Hence, the Commissioner of Income Tax does not have jurisdiction under section 263 of the Act to revise the same on the pretext of verifying another aspect of the same subject matter. 18. There is another aspect to the present case. The Commissioner of Income Tax in his order under section 263 of the Act, after holding the order of the Assessing Officer to be erroneous to the extent prejudicial to the interest of revenue, recorded the following finding in last paragraph of his order : "4.0 In view of the above facts and legal position, it is clear that the assessment order dated 29.12.2008 suffers from errors, which renders it prejudicial to the interest of revenue and is liable to be set aside under Section 263 of the Income Tax Act, 1961. The same is accordingly set aside. The Assessing Officer is directed to frame a fresh assessment keeping in view the above discussion and after allowing due opportunity to the assessee. From the above, we see that the Commissioner of Income Tax has set aside the order of the Assessing ....