1999 (12) TMI 135 - AT - Income Tax

Summary

Issues:
Jurisdiction of CIT under section 263 to revise block assessment order passed by Assessing Officer with approval of predecessor CIT.

Analysis:
The appeal before the Appellate Tribunal ITAT Pune involved the jurisdiction of the Commissioner of Income Tax (CIT) under section 263 to revise a block assessment order passed by the Assessing Officer with the approval of the predecessor CIT. The case stemmed from a search at the assessee's premises leading to an assessment for the block period 1986-87 to 1996-97. The Assessing Officer completed the assessment after obtaining approval from the predecessor CIT. However, the successor CIT found the order erroneous and prejudicial to revenue, invoking section 263 for revision.

The assessee contended that the CIT's revisional jurisdiction was void ab initio as the block assessment order was passed by the Assessing Officer with the predecessor CIT's approval. The CIT directed the Assessing Officer to re-do the assessment, considering a higher amount as undisclosed income. The Tribunal considered the provisions of section 263(1), emphasizing that the Commissioner can only revise an order passed by the Assessing Officer, not his own order. It was noted that the assessment order was essentially passed by the predecessor CIT, as she considered objections and approved the final order.

The Tribunal referred to precedents to support its decision, citing cases where it was held that the CIT cannot revise an order based on directions from the predecessor. The Tribunal concluded that the CIT had no jurisdiction to pass an order under section 263 in the case at hand. Consequently, the Tribunal quashed the CIT's order, allowing the assessee's appeal.

In summary, the Tribunal's decision centered on the interpretation of section 263 and the limits of the CIT's revisional powers concerning block assessment orders passed with the approval of the predecessor CIT. The Tribunal emphasized that the CIT cannot revise an order essentially passed by the predecessor, ultimately ruling in favor of the assessee and quashing the CIT's order under section 263.