2004 (8) TMI 100

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....he present reference relates to the assessment year 1976-77. The respondent-assessee is a limited company carrying on the business of manufacture and sale of sugar. In submitting a return for the assessment year in question it had claimed deduction of gratuity of Rs. 74,287. The assessing authority referred the matter under section 144B of the Act with regard to the allowability to the Assistant Commissioner. The Inspecting Assistant Commissioner, having considered the matter directed allowance of the amount as claimed by it. The assessing authority consequently allowed the amount of Rs. 74,287 vide order dated February 6, 1980. The Commissioner of Income-tax on examination of the records felt that the order passed by the assessing autho....

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....suance to the direction issued by the Inspecting Assistant Commissioner, under section 144B of the Act is not open to revision under section 263 of the Act. The other ground of challenge had also been accepted by the Tribunal by following the decision of this court in the case of J.K. Synthetics Ltd. v. Addl. CIT [1976] 105 ITR 344. We have heard Shri Dhananjai Awasthi, learned counsel for the Revenue, and Sri R.R. Agrawal, learned counsel appearing for the respondent-assessee. Learned counsel for the Revenue submitted that section 263 had undergone a change and now in view of the amendment made in clauses (a) and (c) of Explanation to section 263 by the Finance Act, 1989, with effect from June 1, 1988, the Commissioner could have rev....

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..... Mathew M. Thomas v. CIT [1999] 236 ITR 691 (SC); 2. Commr. of Customs v. Indian Oil Corporation ltd. [2004] 267 ITR 272 (SC); 3. CIT v. Cameo Colour Co. [2002] 254 ITR 565 (Bom). Having heard learned counsel for the parties we find that the apex court in the case of Shri Arbuda Mills Ltd. [1998] 231 ITR 50, while considering the amendment made in section 263 of the Act by the Finance Act, 1989, with retrospective effect from June 1, 1988, has held as follows: "The consequence of the said amendment made with retrospective effect is that the powers under section 263 of the Commissioner shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in an appeal. Accordingly, even i....

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....er? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was justified in law in holding that not only the issues dealt with in the assessment order but also the other issues were merged in the Commissioner of Income-tax (Appeals)'s order ignoring the provisions contained in clause (c) of Explanation to sub-section (1) of section 263 of the Income-tax Act, 1961?" In the case of T.N. Civil Supplies Corporation Ltd. v. CIT [2003] 260 ITR 82, the apex court has held that having regard to the subsequent amendment to the Act from time to time there is no escape for limiting the order passed by the Income-tax Officer in section 263 to exclude the order passed by the Income-tax Officer on the direction of a superior a....