1989 (1) TMI 30 - HC - Income Tax

Summary

Issues: Jurisdiction under section 263 of the Income-tax Act, 1961 for revising assessment orders.

Analysis:
The case involved the assessee filing a return for the assessment year 1973-74, declaring an income of Rs. 37,310, which was later determined by the Income-tax Officer at Rs. 1,42,670. The Commissioner of Income-tax issued a notice under section 263 of the Act, stating that the order was erroneous and prejudicial to the Revenue due to non-compliance with section 144B. The Commissioner set aside the Income-tax Officer's order, remanding for a fresh assessment. The Tribunal allowed the assessee's appeal, noting that the Commissioner failed to show prejudice to the Revenue in the original order.

The main question referred was whether the Tribunal erred in holding that the Commissioner assumed jurisdiction under section 263 without establishing jurisdictional facts. The High Court reviewed the Commissioner's order and found that he correctly identified the need for the Income-tax Officer's order to be both erroneous and prejudicial to the Revenue. The Court emphasized that non-compliance with section 144B rendered the order erroneous and prejudicial. Referring to a similar case, the Court concluded that the Commissioner's order was valid, and the Tribunal's decision was erroneous.

In summary, the High Court held in favor of the Revenue, stating that the Commissioner properly assumed jurisdiction under section 263 as the Income-tax Officer's order was erroneous and prejudicial to the Revenue due to non-compliance with statutory provisions. The Court found that the Commissioner's order was valid, overturning the Tribunal's decision.