2003 (2) TMI 4 - HC - Income Tax

Whether the Tribunal was correct in holding that the Commissioner of Income-tax had no jurisdiction to set aside the order of the Assessing Officer as the issue of investment allowance was adjudicated by the Commissioner of Income-tax (Appeals) prior to the order under section 263? - It is crystal clear that if any aspect is within the scope and ambit of sub-section (2A), there is no limitation. As we have held that the assessment order remains as it is and there was an order passed by the appellate authority also which remained as it is, being undisturbed by the order passed under section 263, the bar of limitation would not come into effect. Hence, we are of the considered view that no question of law arises for calling for statement of the case.

Summary

Issues:
1. Correctness of Tribunal's decision on assessment order set aside by Commissioner under section 263
2. Jurisdiction of Commissioner to set aside Assessing Officer's order on investment allowance
3. Compliance with directions in appellate order and effect of Commissioner's order under section 263

Analysis:
1. The case involved an application under section 256(2) of the Income-tax Act, 1961, where the assessee sought a statement of case from the Income-tax Appellate Tribunal regarding the correctness of the Tribunal's decision on the assessment order set aside by the Commissioner under section 263. The primary contention was whether the entire assessment order was set aside by the Commissioner and if the Assessing Officer's reassessment, done after more than two years, was justified considering the limitation period under sub-section (2A) of section 153 of the Act.

2. The jurisdictional issue revolved around whether the Commissioner had the authority to set aside the Assessing Officer's order on the issue of investment allowance, which had already been adjudicated by the Commissioner of Income-tax (Appeals) before the order under section 263. The debate centered on the interpretation of the Commissioner's order, the directions given, and the compliance with those directions by the Assessing Officer.

3. The analysis delved into the compliance aspect, focusing on the effect of the Commissioner's order under section 263 vis-a-vis the directions in the appellate order. The Tribunal's decision emphasized the need to read the Commissioner's order in its entirety and concluded that the entire assessment order was not set aside. The judgment discussed the applicability of the limitation period and the relevance of complying with the directions of the appellate authority, ultimately leading to the dismissal of the application under section 256(2) as no question of law was found to arise for calling for a statement of the case.