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Issues:
1. Jurisdiction of Commissioner under section 33B of the Indian Income-tax Act, 1922. 2. Assessment order prejudicial to the interests of revenue. 3. Requirement of Commissioner to examine merits of objection raised by assessee. 4. Delegation of power to Income-tax Officer by Commissioner. Analysis: 1. The judgment pertains to a reference under section 66(1) of the Indian Income-tax Act, 1922, involving a private limited company that claimed a sum of rupees one lakh as exempt from income tax for the assessment year 1960-61. The Income-tax Officer did not address this claim in the assessment order, leading to subsequent actions by the Commissioner under sections 148 and 33B. 2. The primary issue was whether the assessment order was prejudicial to the interests of the revenue, as required under section 33B for the Commissioner to revise the order. The Tribunal found the order prejudicial due to the failure to process the claimed sum of rupees one lakh, leading to the Commissioner's action under section 33B. 3. The judgment highlighted the necessity for the Commissioner to examine the merits of the objection raised by the assessee before taking action under section 33B. It emphasized that the Commissioner cannot delegate the power to the Income-tax Officer and must independently assess the validity of the claim made by the assessee. 4. The Court found that the Commissioner's decision to cancel the assessment order without considering the merits of the claim was erroneous. It stated that the Commissioner must reject the plea of the assessee after examining the merits before revising an order under section 33B. Failure to do so renders the Commissioner incompetent to set aside the assessment order and remand the matter to the Income-tax Officer. In conclusion, the Court ruled in favor of the assessee, stating that the Commissioner lacked jurisdiction under section 33B as the assessment order was not shown to be prejudicial to the revenue. The judgment emphasized the importance of the Commissioner independently assessing the merits of objections raised by the assessee before revising any assessment order.
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