1999 (9) TMI 73

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.... facts and in the circumstances of the case, the Tribunal was justified in law in cancelling the order under section 263 passed by the Commissioner?" The assessment year involved in this case is 1983-84. The original assessment order was completed on November 18, 1985, and thereafter there was a reassessment under section 147 read with section 148 of the Income-tax Act. On scrutiny of the assessment records the Commissioner found that the assessment order is erroneous and prejudicial to the interests of the Revenue, as the Income-tax Officer has not charged the interest under section 215 of the Act. The show-cause notice was issued to the assessee under section 263 of the Income-tax Act, 1961. In response to the show-cause notice t....

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....rder which is non est. The admitted facts are that the original assessment order was passed on November 18, 1985, the revised assessment under section 147 read with section 148 was passed on January 8, 1987, and the Commissioner of Income-tax has revised the order under section 263 on March 8, 1988. If we go by the ratio, of the aforesaid decisions then the Commissioner of Income-tax has no right to revise the order which is non est. Learned counsel for the Revenue brought to our notice the decision of the Supreme Court in the case of CIT v. Sun Engineering Works P. Ltd. [1992] 198 ITR 297, wherein the issue was considered that after the original assessment order under section 143(3) if that assessment order was reopened under section....

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....ssee to reagitate questions which had been decided in the original assessment proceedings. It is only the underassessment which is set aside and not the entire assessment when reassessment proceedings are initiated." Their Lordships held that the Income-tax Officer's jurisdiction is confined to only such income which has escaped tax or has been underassessed and does not extend to revising, reopening or considering the whole assessment. Therefore, it is only for the income escaped and not the entire assessment when reassessment proceedings are initiated. Their Lordships further observed at page 322 that the Tribunal rightly found that the loss which the assessee wanted to be set off against the "escaped income" could not be allowed to....