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Jurisdiction of Commissioner under section 263 of the Income-tax Act. Analysis: The High Court was presented with the question of whether the Tribunal was correct in canceling the Commissioner's order under section 263 of the Income-tax Act, on the basis that the Commissioner lacked jurisdiction due to an order already passed by the Commissioner (Appeals). The court referred to a previous Division Bench judgment in Addl. CIT v. Vijayalakshmi Lorry Service [1986] 157 ITR 327, which concluded that the Commissioner had the authority to revise orders even if the Assessing Officer's order had been appealed. Therefore, the question was answered in favor of the assessee and against the Revenue. The court also considered Explanation (c) added to section 263(1) of the Income-tax Act, 1961, with amendments made by the Finance Act of 1989. This explanation clarified that the Commissioner's powers under section 263 extended to matters not considered in an appeal filed before or after June 1, 1988. The Supreme Court's interpretation in CIT v. Shri Arbuda Mills Ltd. [1998] 231 ITR 50 emphasized that the Commissioner's powers under section 263 were deemed to have always extended to matters not addressed in an appeal. The court noted that the Revenue failed to establish that the subject-matter considered by the Commissioner (Appeals) was different from what the Commissioner considered under section 263(1). Consequently, the amendments made by the Finance Act of 1989 did not impact the present case, as the subject-matter for consideration was not clearly distinct. Therefore, the court dismissed the appeal. In conclusion, the High Court reaffirmed the Commissioner's jurisdiction under section 263 of the Income-tax Act, emphasizing that the Commissioner's revisional powers extended to matters not addressed in an appeal. The court's decision was based on legal precedents and interpretations of relevant provisions, ensuring clarity on the Commissioner's authority in revising orders under the Income-tax Act.
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