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TMI Blog1978 (8) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... by applying a higher rate of gross profit at 13 per cent of the total sales and on this score the addition was Rs. 5,000. There was some addition in the income from the house property and a few items of expenditure were disallowed. The assessment order is dt. 13th March, 1975. 3. The assessee preferred an appeal before the AAC challenging the addition in the trading account and disallowance of expenditure. The AAC deleted the addition of Rs. 5,000 in the trading account but confirmed the disallowance of expenditure. The order of the AAC is dt. 13th Aug., 1975. 4. On 28th Feb., 1977 the CIT, acting under s. 263 of the IT Act issued a notice to the assessee to show-cause why remedial order should not be passed according to him, the ITO b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sent against the proposed order and he availed of it by filing an objection and appearing through counsel. This objection has no substance. 8. On merits, after perusal of the order passed by the ITO, we clearly note that the points raised by the CIT were not at all considered by the ITO. He had passed a brief and routine order wherein he made some minor variations in the rate of gross profit and income from house property. The learned CIT undoubtedly raised questions which needed detailed examination and ITO s failure to probe into these question had resulted in an order which was prejudicial to the interests of the Revenue. In Addl. CIT vs. Mukur Corporation(1), the Gujarat High Court observed that when the ITO, made an assessment withou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be a lending case on the issue and various decisions rendered by the various High Courts and even the Supreme Court appear to follow the principle stated therein. In CIT vs. Amrit Lal Bhogilal Co.(3) the question of merger was elaborately considered. The Lordships of the Supreme Court followed the principle in Tetaji Farasram Kharawala s(2) case but distinguished the same on facts. In Amrit Lal Bhogilal Co.(3) the law as stated by their Lordships of the Supreme Court can be summarised as follows. It an appeal is provided against an order passed by Tribunal, the decision of the appellate authority is the operative decision in law. But if no appeal is provided against an order or against a particular part of the order, there cannot be any m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not considered by him in the original assessment order which was carried before the AAC in appeal and decided. The principles which might govern the ITO's power to rectify need not be extended to the power exercisable by a Commissioner under s. 263 of the Act. The reason as explained in Tetaji Farasaram Kharawala's Case(2) is that in an appeal by the assessee against the assessment order, the Department can raise all the points relating to the computation of income and claim enhancement of such income. The decision of the Madhya Pradesh High Court in Kallooram Tirasilal vs. ITO(7) also refers to the ITO's power of rectifying an apparent mistake under s. 35 of the IT Act, 1922. These cases cannot be considered as authority for the propositi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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