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TMI Blog1992 (2) TMI 145X X X X Extracts X X X X X X X X Extracts X X X X ..... laring net income of Rs. 87,68,898. The return had again been revised on13th March, 1985disclosing net income at Rs. 79,26,250. The Assessing Officer framed an assessment under section 143(3) vide order dated 29th March, 1985 determining income at Rs. 92,58,170. The assessee filed an appeal against the assessment order to the CIT (Appeals),Meerutwho disposed of the same on23-1-1987. The CIT (Administration) on examination of assessment records of the assessee was of the prima facie view that the assessment order passed by the Assessing Officer was erroneous and prejudicial to the interests of the revenue. He accordingly issued a notice dated6-3-1987inviting objections as to why action under section 263 may not be taken. The assessee objecte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . According to the Commissioner the assets atBombaywere not business assets and, therefore, legal expenses incurred in respect of such assets would not qualify for deduction as business expenditure. " He accordingly directed the Assessing Officer to withdraw the investment allowance in respect of plant and machinery installed during the year in soap units after working the exact amount of deduction on account of machinery additions made during the year under appeal. In respect of other two matters the Assessing Officer was directed to pass fresh order after making proper enquiries and after giving reasonable opportunity of being heard to the assessee. 3. The Assessing Officer has passed fresh order of assessment on20th December, 1988mak ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under the jurisdiction of the Hon'ble Allahabad High Court, the learned Commissioner of Income-tax was not empowered to revise the order of assessment in view of the decision reported as [1976] 105 ITR 344 --- J. K. Synthetics Ltd. v. Addl. Commissioner of Income-tax, U. P. another, the order passed under section 263 deserves to be vacated on this legal ground also. " 5. We have heard the learned counsel for the assessee Sri Monga, the learned departmental representative Sri D. K. Singh and have perused the records. The learned departmental representative objected to the admission of the additional ground at this stage. Reference was made to the decision of the Hon'ble Supreme Court in Jute Corpn. of India Ltd. v. CIT [1991] 187 ITR 688 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... following the Special Bench decision of the Tribunal in Indo Java Co. v. LAC [1989] 30 ITD 161 (Delhi) admit the additional ground No. 2 which is purely legal in nature. 9. We now proceed to dispose of this additional ground of appeal on merits. We may state at the cost of repetition that the assessment in this case was made on29-3-1985and the CIT (Appeals) disposed of the appeal filed by the assessee against that order on23-1-1987. Though admittedly the grounds on which the CIT (Administration) has invoked jurisdiction under section 263 were not subject-matter of appeal before the CIT (Appeals), yet the Hon'ble Allahabad High Court which is the jurisdictional High Court in this case in J. K. Synthetics Ltd. held that the entire order o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , 1988and secondly the powers under section 263 would be exercised by the Commissioner within two years from the end of the assessment year in which the order sought to be revised was passed. It is accordingly pleaded that the order passed by the Commissioner under section 263 may be cancelled. 12. We have given our careful consideration to the rival contentions. The assessment order passed by the Assessing Officer is dated29th March, 1985and accordingly the CIT (Administration) could invoke jurisdiction under section 263 in a case where the order sought to be revised is considered to be erroneous and prejudicial to the interest of the revenue by ending March 1987. The CIT has passed an order within the period of limitations that is befor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of the CIT under section 263 in a case where the order of assessment sought to be revised had been the subject-matter of appeal before the CIT (Appeals) was clearly without jurisdiction as per the decision of the Allahabad High Court in the case of J. K. Synthetics Ltd. We may point out that a contrary view has been taken by several other High Courts and we are also parties to some of the decisions of the Tribunal holding the view that the CIT has the power to invoke powers under section 263 subject to other conditions being satisfied in such matters which had not become subject-matter of appeal. In this case, however, the position is entirely different. The authorities working under the jurisdiction of a particular High Court are bound ..... X X X X Extracts X X X X X X X X Extracts X X X X
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