2006 (1) TMI 85

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ed Commissioner of Income-tax under section 263 of the Income-tax Act had jurisdiction to direct the Assessing Officer to make proper investigation and then decide the question of allowability of additional commission in accordance with law? (2) Whether, on the facts and in the circumstances of the case, the Tribunal should have cancelled the order of the Commissioner of Income-tax under section 263 directing the Assessing Officer to disallow the additional commission?" The assessment year is 1986-87 and the relevant accounting period is calendar year 1985. The assessee had made a claim for deduction of a sum of Rs. 1,90,18,508 towards commission. This was comprised of two parts: (1) regular commission which was deducted by the ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....in modifying the order of the Commissioner of Income-tax under section 263 of the Act by substituting the direction of the Commissioner of Income-tax. The contention was that the Tribunal could only uphold the order of the Commissioner of Income-tax or hold that the same was bad in law. The Tribunal could not partially uphold the order of the Commissioner of Income-tax, namely, upholding the assumption of jurisdiction under section 263 of the Act and yet, modifying the direction made by the Commissioner of Income-tax by restoring the matter to the file of the Assessing Officer. This submission was based on the premise that the assessee was in appeal before the Tribunal and hence, the Tribunal was only required to determine whether the order....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....urse, the powers have to be exercised in consonance with the provisions of the Act and in accordance with the law. There is no warrant to read any restriction on the powers that the Tribunal can exercise in circumstances like the one obtaining in the present case. The Commissioner, while passing the order under section 263 of the Act, had directed disallowance of the additional commission without anything more. The Tribunal has modified the same with a direction to the Assessing Officer to make inquiries and then disallow the claim, if the facts so warrant. In fact, the order of the Commissioner is modified in favour of the assessee and no prejudice is shown to have been caused to the assessee. Instead of the entire amount being disallow....