2000 (12) TMI 66 - HC - Income Tax

Summary

Issues Involved:
The issue involves the jurisdiction of the Commissioner of Income-tax to cancel an order passed by the Income-tax Officer under section 154 of the Income-tax Act, 1961.

Summary:

The High Court of Delhi was presented with a question referred by the Income-tax Appellate Tribunal regarding the legality of the Commissioner of Income-tax canceling an order passed by the Income-tax Officer under section 154 of the Income-tax Act, 1961. The case revolved around an assessee who received terminal benefits upon retirement, which were initially treated as taxable but later rectified under section 154 due to a plea based on a Tribunal decision. The Commissioner, considering the rectification order erroneous, invoked section 263 to cancel it. The Tribunal, however, held that since the Income-tax Officer acted under the Commissioner's direction following a circular, section 263 did not apply, as it would amount to reviewing the predecessor's order, which is impermissible. The Tribunal concluded that the Commissioner's order was without jurisdiction and canceled it.

Upon hearing the case and considering the factual background, the High Court found that the decision in C. K. Karunakaran v. Union of India applied to the present case. The Court determined that the assessee should succeed on the merits, rendering the referred question of academic interest. Consequently, the Court declined to answer the question, and the reference was disposed of.