9911796707
TMI Blog1983 (9) TMI 142X X X X Extracts X X X X X X X X Extracts X X X X ..... of the view that there was prejudice to the revenue inasmuch as the assessee's status was taken as that of a company in which public are substantially interested ignoring certain facts on record. The assessee objected to the proposed action on the ground that section 263 of the Act action is barred as the assessment was practically in pursuance of the order of the IAC and that section 263 does not authorise any revision of such effective order by the IAC. His proposal was also questioned on merits. The Commissioner did not agree with the objections and passed the impugned order setting aside the assessment with a direction to treat the company as one in which public are not substantially interested and the assessee's appeal in IT Appeal No ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er could exercise revisionary powers under section 263 only in respect of items which were not the subject matter of the order under section 144B. The learned counsel for the assessee had relied on this decision as, according to him, any order which is in pursuance of directions or proceedings under section 144B cannot be liable for action under section 263. After careful reading of the decision, we are of the view that the learned counsel is not justified in presuming that the Special Bench decision was to that effect. This Tribunal found that where a particular issue had become the subject-matter of instructions of the IAC, it could not again be a matter for action under section 263. We found with reference to records of East Coast Marine ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ctions before the IAC, the order is that of the IAC and not the ITO. In other words, this Tribunal took the view that in a case of an assessment passed in pursuance of an order under section 144B, it is actually made by two officers (one part by the IAC and the other by the ITO). "It is only as a matter of convenience that it is authenticated by the ITO as if it is made by him alone." It further observed : "Possibly, the directions given under section 144B which amount to an order passed by him cannot be the subject-matter of revision by the Commissioner". The operative part of the order also clearly mentions "for the foregoing reasons, we hold that the Commissioner has no jurisdiction under section 263 to revise that portion of the order c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o as to make any order subject to section 144B an order of the IAC thereby ousting jurisdiction of the Commissioner under section 263. It took care to spell out and confine the Commissioner's limitation to cases where a particular issue is the subject-matter of instructions of the IAC under section 144B. In the facts and circumstances of the assessee's case, the assessee had returned the status as a company in which public are substantially interested. The ITO accepted the status in the draft order. The directions under section 144B also did not contain any instructions as regards the status. In fact, this was never the subject-matter even of discussion before him. Hence, a notice of the Commissioner under section 263 confining itself to th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... oner. It may be doubtful as to how far he was justified in the course adopted by him as the issues before him were independent and unconnected with the issue raised in the order of the Commissioner. As noticed by us, though the Commissioner's order purported to set aside the assessment, it was concerned only with the 'status' assigned to the assessee. At any rate, after the present order which has modified his order, it is only the question of status that is now before the ITO. The appeal on other points, by the assessee is valid and should have been dealt with by him. The Karnataka High Court in the case of B. Kempanna and the Madhya Pradesh High Court in Smt. Gulab Bai Mittal's case had pointed out that an appeal could lie to the AAC even ..... X X X X Extracts X X X X X X X X Extracts X X X X
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