TaxTMI 
TaxTMI 
TaxTMI 
2002 (7) TMI 50
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.... conclusion reached by the Appellate Tribunal in setting aside the order made by the Commissioner of Income-tax under section 263 of the Income-tax Act, 1961, is even otherwise sustainable in law?" The assessee is a partnership firm and had filed its return of income disclosing a net loss of Rs. 2,777 in the business of purchase and sale of ornaments and jewellery. The Income-tax Officer issued notices under sections 142(2) and 143(1), of the Income-tax Act, 1961, along with the requirement letter. After considering the material produced by the assessee and the explanation offered, the Income-tax Officer has framed the assessment determining the total income at Rs. 32,900. The Commissioner of Income-tax has found the said order of the Inco....
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....he order passed by the Income-tax Officer under section 143(3) of the Act with a direction to pass a fresh order in accordance with law after carrying out necessary investigations with regard to various explanations offered by the assessee. Being aggrieved by the said order, the assessee preferred an appeal before the Income-tax Appellate Tribunal and objected to the order so passed by the Commissioner. The Tribunal has considered the rival submissions of the parties at great length and also referred to and relied on the authorities cited by the respective parties. The Tribunal has observed in para. 7 of its order that from the material already brought on record, it is difficult to hold that the Income-tax Officer has not properly investig....
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....licantRevenue, and Mr. R.K. Patel, learned advocate appearing for the respondent-assessee. The Revenue's case was, as canvassed by Mrs. Bhatt, that since the material which was available with the Income-tax Officer was not considered while finalising the assessment, the order passed on that basis is erroneous and prejudicial to the interests of the Revenue. According to the Revenue, before passing the order, full enquiry and investigation ought to have been made by the Income-tax Officer and since this was not done, it has caused loss to the Revenue and in this view of the matter, the order so passed was erroneous and prejudicial to the interests of the Revenue and the Commissioner was justified while taking action under section 263 of the ....
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....l orders passed without applying the principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the Revenue' is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss of tax. The scheme of the Act is to levy and collect tax in accordance with the provisions of the Act and this task is entrusted to the Revenue. If due to an erroneous order of the Income-tax Officer, the Revenue is losing tax lawfully payable by a person, it will certainly be prejudicial to the interests of the Revenue. The phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erroneous order passed by the Ass....
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....e and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law. Coming to the facts of the present case, it is the finding of fact given by the Tribunal that the assessee has produced relevant material and offered explanations in pursuance of the notices issued under section 142(1) as well as section 143(2) of the Act and after considering the materials and explanation, the Income-tax Officer has come to a definite conclusion. The Commissioner of Income-tax did not agree with the conclusion reached by the Income-tax Officer. Section 263 of the Act does no....