1992 (6) TMI 29

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.... Commissioner of Income-tax (Appeals) in the appeal filed against the order passed by the Inspecting Assistant Commissioner (Assessment) has resulted in the complete merger of the order appealed against with the appellate order, thereby ousting the jurisdiction of the Commissioner of Income-tax from exercising his power under section 263 of the Income-tax Act, even though the issues considered under section 263 were not the subject-matter of appeal before the Commissioner of Income-tax (Appeals)?" The relevant facts are as follows: The assessee is a company and the year relevant to this application is the assessment year 1980-81. The assessment order which is passed by the Inspecting Assistant Commissioner (Assessment) is dated July 2....

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....t the Department has is the right of appeal to the Appellate Tribunal. The Commissioner of Income-tax cannot thereafter exercise his powers under section 263 as the assessment order has merged with the appellate order. It is pointed out by Mr. Jetley, learned counsel for the Revenue, that section 263 has since been amended in the following manner : The Explanation to section 263(1) as it stood prior to June 1, 1988, did not contain clause (c) which is the material clause for our purposes. Clause (c) was added to the Explanation to section 263(1) for the first time with effect from June 1, 1988. It provided that Where any order referred to in section 263(1) and passed by the Assessing Officer had been the subject-matter of any appeal, ....

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....he Explanation, observed that the Explanation as such was inserted in section 263 by the Taxation Laws (Amendment) Act, 1984, with effect from October 1, 1984. The Explanation had only two clauses (a) and (b) at that time. Clause (c) was inserted in the Explanation by the Finance Act, 1988, with effect from June 1, 1988. However, clause (c) of the Explanation did not have the words " filed on or before or after the 1st day of June, 1988 ", after the words " of any appeal ", nor the words " and shall be deemed always to have extended ", between the words " shall extend " and " to such manner These words were introduced by the Finance Act of 1989 with retrospective effect from June 1, 1988. The learned judge held that the fact that the ins....