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2013 (9) TMI 959 - HC - Income TaxLimitation period for applicability of section 263 for revision by Commissioner Held that - Except the issue of non genuine purchases all other issues dealt by Commissioner of Income Tax in the order dated 30 March 2009 were not a subject matter of the assessment order passed on 28 June 2006 under Section 143(3)/147 of the Act. All the other issues on which the Commissioner of Income Tax is seeking to exercise jurisdiction under Section 263 of the Act were concluded by virtue of an intimation under Section 143(1) of the Act which admittedly was done beyond a period of two years prior to notice dated 17 March 2009 issued under Section 263 of the Act. Section 263(2) of the Act provides that no order would be made in exercise of jurisdiction under Section 263(1) of the Act after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. Commissioner of Income Tax has not exercised revisional jurisdiction in respect of order/intimation passed Section 143(1) of the Act within two years of it being passed. Therefore, exercise of jurisdiction on those issues under Section 263 of the Act is time barred as held by this Court in CIT vs. Anderson Marine & Sons (P) Ltd. 2003 (12) TMI 47 - BOMBAY High Court Decided against the Revenue.
Issues:
1. Jurisdiction of Commissioner of Income Tax to revise assessment orders under Section 263 of the Income Tax Act. 2. Revision of Assessing Officer's findings based on no evidence or contrary evidence. 3. Justification of ITAT's application of case law when issues do not concern the case law. Issue 1: Jurisdiction of Commissioner of Income Tax to revise assessment orders under Section 263 of the Income Tax Act: The High Court addressed the issue of whether the Commissioner of Income Tax had the right to revise the order of the Assessing Officer under Section 263 of the Income Tax Act. The dispute centered around the use of bogus bills and non-genuine parties by the assessee, which could potentially defraud state finances. The Court analyzed whether the Commissioner's direction for reexamination by the Assessing Officer was valid and in accordance with the law. The Tribunal's decision and the application of inappropriate case law were also examined in this context. Issue 2: Revision of Assessing Officer's findings based on no evidence or contrary evidence: The Court deliberated on whether the findings of an Assessing Officer, which lack evidence or are based on non-material evidence, could be revised by the Commissioner under Section 263 of the Income Tax Act. The judgment explored the scenarios where the Assessing Officer's decision is perceived as absurd, arbitrary, or lacking a direct nexus between the conclusion and primary facts. The transformation of a question of fact into a question of law due to violations in decision-making principles was also considered. Issue 3: Justification of ITAT's application of case law when issues do not concern the case law: The Court examined whether the ITAT was justified in applying case law that seemed inappropriate for the issues at hand. Specifically, the relevance of case law cited by the ITAT, which did not align with the grounds of limitation in the present matter, was assessed. The judgment scrutinized the appropriateness of relying on case law when the issues being addressed did not directly pertain to the case law cited. In summary, the High Court's judgment in this case involved a detailed analysis of the jurisdiction of the Commissioner of Income Tax to revise assessment orders under Section 263 of the Income Tax Act, the revision of Assessing Officer's findings based on evidence, and the justification of ITAT's application of case law. The Court provided a comprehensive examination of each issue, considering legal principles, case law, and the specific circumstances of the case to arrive at a reasoned decision.
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