1996 (3) TMI 72

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....nd) of 1986 for our opinion : "Whether, on the facts and in the circumstances of the case, the Income-tax Appellate Tribunal was justified in holding that the Commissioner of Income-tax had jurisdiction to initiate proceedings under section 263 of the Income-tax Act and to revise the original assessment order ?" Briefly stated the facts of the case are that the assessee is a private limited company and the year of assessment is 1979-80 ending March 31, 1979. The original assessment in the case of the assessee for 1979-80 was completed by the Income-tax Officer on March 30, 1982. The Income-tax Officer later rectified the said assessment order under section 154 of the Act on May 6, 1983. He, thereby, disallowed 15 per cent. of interest....

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.... 1984 (annexure "E"). The order of rectification was dislodged in appeal by the Commissioner of Income-tax (Appeals) on January 30, 1985. The assessee filed the appeal before the Tribunal against the order passed under section 263 of the Act. The Tribunal remanded the case to the Income-tax Officer to redetermine the issues (annexure "C"). The assessee felt aggrieved by the order of the Tribunal and thus filed the application under section 256(1) of the Act. The Tribunal stated the case and referred the aforesaid question of law. We have heard Shri G. M. Chaphekar, learned senior counsel with Shri Subhash Samvatsar, for the applicant, and Shri D. D. Vyas, learned counsel for the non-applicant. The undernoted facts are not in dispute :....

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....ssessing", the words appearing in the section were "Income-tax" till substitution by the Direct Tax Laws (Amendment) Act, 1987, effective from April 1, 1988), was erroneous in so far as it was prejudicial to the interests of the Revenue. It is, thus, clear that the order is the basis of the exercise of the power conferred by this section. Indisputably on March 2, 1984, when this power was exercised, the order dated March 30, 1982, was not in existence. It is a different matter that the order of rectification dated May 6, 1983, which was in existence on the date of initiation of the proceedings under section 263 of the Act was later demolished on January 30, 1985, by the Commissioner of Income-tax (Appeals) in the appellate jurisdiction. ....