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TMI Blog1995 (2) TMI 122X X X X Extracts X X X X X X X X Extracts X X X X ..... ying the provisions of sections 28 to 43C, without making resort to the provisions of section 44AC, he completed the assessment. Since the decision of the Andhra Pradesh High Court in the case of A. Sanyasi Rao was pending in appeal before the Supreme Court, he finalised the assessment, pending the outcome of the appeal before the Supreme Court, in deference to the judgment of the jurisdictional High Court, determining the income of the assessee at Rs. 5,23,690 by the assessment order dated 20-3-1992, passed under section 143(3). (c) While scrutinising the assessment record, the Commissioner noted that the decision of the Andhra Pradesh High Court in the case of A. Sanyasi Rao, when pursued in appeal before the Supreme Court by the Department, the Hon'ble Supreme Court while suspending the operation of the decision of the Andhra Pradesh High Court, in its order in I.A. No. I-105 in C.A. No. 290-4294/1989 dated 31-3-1992, observed that the Department was free to make the assessments of the assessees carrying on the business falling within the scope of the provisions of section 44AC of the Act, without being bound by the decision of the Andhra Pradesh High Court in the case of A. S ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 86] 159 ITR 812 (MP), (3) Venkatakrishna Rice Co. v. CIT [1987] 163 ITR 129 (Mad.), (4) Shree Chamundi Mopeds Ltd. v. Church of South India Trust Association AIR 1992 SC 1439, (5) Shri Subhash Chander v. ITO [1990] Tax. 99(4)-- 10. 4. On the other hand, the learned Departmental Representative has strongly supported the order of the Commissioner passed under section 263, and submitted that we should uphold the same. 5. We have considered the rival submissions and perused the decisions relied upon by the learned counsel for the assessee. At the outset, we may note that there was delay of 34 days in the filing of this appeal, for condonation of which assessee moved a petition. We are convinced with the reasons put forth for the delay in the filing of this appeal. Hence, condoning the delay, we proceed to decide this appeal on merits. 6. We may note in the first instance that the assessment order under section 143(3) was passed by the Assessing Officer on 20-3-1992, following the decision of the Andhra Pradesh High Court in the case of A. Sanyasi Rao, whereas the operation of the said decision of the Andhra Pradesh High Court was suspended by the Supreme Court in A. Sanyasi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s (P.) Ltd. before the Calcutta High Court, the assessee let out certain premises and the amounts received from the tenants included service and maintenance charges. With regard to the previous assessment year 1966-67, the Appellate Tribunal observed that the facts of the case were similar to those found in the case of Karnani Properties Ltd. v. CIT [1971] 82 ITR 547 (SC), and hence, following the Supreme Court decision, the Tribunal held that the income from service and maintenance charges was income from business. Following the decision of the Tribunal the Income-tax Officer passed order for the assessment years 1967-68,1968-69 and 1969-70, on the basis that income from service and maintenance charges was income from business. While appeals were pending from the assessment for these years, the Commissioner issued a notice under section 263, seeking to cancel the assessments. When the action of the Commissioner was challenged by the assessee, the Hon'ble Calcutta High Court, considering the powers of the Commissioner under section 263 observed as follows : " The power of revision under section 263 of the Income-tax Act, 1961, can be exercised only if the following conditions are ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... spective assessments. Accordingly, when the Income-tax Officer makes an assessment on the share income of the assessee from a joint venture, he exercises his option of assessment which was valid in law and in accordance with law. " The Hon'ble High Court thereafter held in that case as follows :---- " Held, that as in the instant case, the order of assessment of the Income-tax Officer was in accordance with law, it cannot be erroneous in law and consequently it could not be prejudicial to the interest of the revenue and the action of the Commissioner cannot be justified.... The scope of interference under section 263 is not to set aside merely unfavourable orders and bring to tax some more money to the treasury nor is the section meant to get at sheer escapement of revenue which is taken care of by other provisions in the Act. The prejudice that is contemplated under section 263 is prejudice to the Income-tax administration as a whole. Section 263 is to be invoked not as a jurisdictional corrective or as a review of a subordinate's order in exercise of the supervisory power but it is to be invoked and employed only for the purpose of setting right distortions and prejudices to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... yasi Rao holding the field as on the date of the assessment order, the operation of the same having been suspended subsequently, the action of the Assessing Officer in following the said decision while completing the assessment cannot be faulted, since, as observed by the Madras High Court, in the case of Shriram Development Co. the position has to be examined as it stood at the time the order of assessment was passed by the Income-tax Officer. 12. At this juncture, it would be relevant to consider the decision of the Supreme Court in the case of Shree Chamundi Mopeds Ltd. In that case, the Hon'ble Supreme Court, considering the effect of a stay order in the context of provisions of section 151 of Civil Procedure Code, 1908, observed as follows : " While considering the effect of an interim order staying the operation of the order under challenge, a distinction has to be made between quashing of an order and stay of operation of an order. Quashing of an order results in the restoration of the position as it stood on the date of the passing of the order which has been quashed. The stay of operation of an order does not, however, lead to such a result. It only means that the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X
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