2013 (10) TMI 1233 - HC - Income Tax

Validity of revisionary order u/s 263 passed by the CIT Held that - Order of the Commissioner passed under Section 263 of the Act is a detailed order discussing each of the nine points raised by the revisional authority - Ultimately, following the decision of Apex Court in Malabar Industrial Co. Ltd. v. CIT 2000 (2) TMI 10 - SUPREME Court , Tribunal also confirmed the opinion of the Commissioner that there was no application of mind while considering the assessment under Section 143(3) of the Act, therefore, it is not only erroneous, but also prejudicial to the interest of revenue Decided against the Assessee.

Summary

Issues:
Challenge to revisional jurisdiction under Section 263 of the Income Tax Act.

Analysis:
The case involved a challenge to the revisional jurisdiction exercised by the Commissioner of Income Tax under Section 263 of the Income Tax Act. The appellant assessee filed a Writ Petition questioning the revisional jurisdiction exercised by the Commissioner. The regular assessment was completed under Section 143(3) of the Act, and several issues were considered by the Commissioner of Income Tax (Appeals). The Commissioner then passed an order exercising revisional powers under Section 263 of the Act, deeming the original assessment as erroneous and prejudicial to the interest of revenue. The issues raised in the order included depreciation calculations, inclusion of income, disallowance of expenses, and other related matters.

The appellant argued that the Assessing Officer had considered the specific points raised under Section 263, and there was no erroneous consideration. However, the Commissioner's order was detailed, discussing each of the nine points raised by the revisional authority. The Tribunal, referencing a decision of the Bombay High Court and the Apex Court, upheld the Commissioner's decision, stating that there was no application of mind during the original assessment under Section 143(3), making it both erroneous and prejudicial to the interest of revenue. The Tribunal confirmed the orders of the Commissioner under Section 263 of the Act, emphasizing that the procedure adopted would impact tax computation, causing prejudice to revenue.

The High Court affirmed the Tribunal's opinion, stating that fresh consideration of the matter by the assessing authority should be made without being influenced by previous observations. The Court found no valid reason to interfere with the decisions of the authorities involved and dismissed the appeal, upholding the orders passed under Section 263 of the Income Tax Act.