TaxTMI 
TaxTMI 
2002 (11) TMI 49
X X X X Extracts X X X X
X X X X Extracts X X X X
....ing the order under section 263 dated March 9, 1993, made by the Commissioner of Income-tax for the assessment year 1988-89?" However, the only question of law referred by the Appellate Tribunal is not correct, as seen from the order of this court in T.C.P. Nos. 49 and 50 of 1995, wherein this court has directed the Appellate Tribunal to refer another question of law. The question that was also directed to be referred and reframed by this court reads as under: "Whether, on the facts and in the circumstances, the Appellate Tribunal was right in cancelling the order of the Commissioner of Income-tax passed under section 263 of the Income-tax Act, 1961?" However, the Income-tax Appellate Tribunal has referred only one question of law ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....tion 143(1)(a) of the Income-tax Act, and while completing the assessment, the Income-tax Officer held that the income from the building owned by the assessee should be treated as income from the business and also granted depreciation at the rate of 33 1/3 per cent. on the cost of the building owned by the assessee. The Commissioner of Income-tax initiated proceedings to revise the order of assessment under section 263 of the Act and in order dated October 9, 1990, he held that the grant of depreciation at the rate of 33 1/3 per cent. was not correct and the income from the building, viz., "Srinivas Building" should not be considered under the head "Business" but under the head "Income from the house property". In this view of the matter, h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on Officer for the purpose of determining the cost of construction and he also directed the Assessing Officer to make necessary enquiries for finding out the source of investment in the said building. The subsequent order of the Commissioner of Income-tax was passed on March 9, 1993. The assessee has challenged both the orders of the Commissioner of Income-tax before the Income-tax Appellate Tribunal. The Income-tax Appellate Tribunal allowed both the appeals, and hence two references are before us. The Income-tax Appellate Tribunal cancelled both the orders passed by the Commissioner of Income-tax under section 263 of the Act. The Tribunal set aside the order of the Commissioner of Income-tax dated March 9, 1993, on the ground that in h....
X X X X Extracts X X X X
X X X X Extracts X X X X
....lso not disclosed any material for arriving at such a conclusion. We, therefore, hold that the Appellate Tribunal was correct in holding that the order of the Commissioner directing the Assessing Officer to treat the cost of construction as the undisclosed income of the assessee suffers from serious infirmity and there are no reasons to differ from the view taken by the Appellate Tribunal on this aspect. As far as the first order of the Commissioner of the Income-tax is concerned, the Appellate Tribunal has cancelled the order of the Commissioner of the Income-tax only on the ground that the order of the Income-tax Officer was made under section 143(1)(a) of the Act and since it was a summary assessment order, the Commissioner of Income-....
X X X X Extracts X X X X
X X X X Extracts X X X X
....d the circulars only deal with the cases where the Board has directed that in the cases where there is a small or negligible tax effect and if the summary order of assessment has been passed, the Commissioner was advised not to initiate revision proceedings under section 263 of the Act. We hold that the circular has no application to all situations and when the Commissioner is satisfied that the amount of tax involved is substantial, it is open to the Commissioner to exercise the power of revision even if the order of assessment is a summary assessment. We are of the view that the exercise of revisional power would be necessary and needed in case of summary assessments as the assessments are made without any inquiry and the assessments are ....