1990 (9) TMI 60 - HC - Income Tax

Summary

Issues Involved:
The issues involved in this case are:
1. Interpretation of the effect of Explanation (c) u/s 263(1) of the Income-tax Act, 1961.
2. Jurisdiction of the Commissioner of Income-tax u/s 263 in relation to orders passed by the Assessing Officer.

Interpretation of Explanation (c) u/s 263(1):
The court examined the retrospective amendment of Explanation (c) in the case of Ritz Ltd. v. Union of India [1990] 184 ITR 599. The retrospective effect of the amendment was clarified to cover only orders that became the subject of appeal after June 1, 1988. It was emphasized that any retrospective amendment to Explanation (c) could not be effective before the date of its insertion. The court agreed with the conclusion in the Ritz Ltd. case regarding the retrospective nature of the amendment.

Jurisdiction of Commissioner of Income-tax u/s 263:
In this case, the Commissioner (Appeals) issued the order on January 3, 1983, while the Commissioner passed the order u/s 263 on September 7, 1983. Both these actions occurred before the insertion of Explanation (c) and its clauses (a) and (b) with effect from October 1, 1984. Consequently, the court found that the issues raised by the Department were already addressed in previous court decisions, rendering further referral unnecessary. As a result, the second question became academic and did not warrant referral as a question of law.

Conclusion:
The court concluded that the issues raised by the Department were already settled by previous court decisions, and no useful purpose would be served by referring the questions to the court for opinion. Therefore, the rule was discharged with no order as to costs.