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TMI Blog1978 (8) TMI 110X X X X Extracts X X X X X X X X Extracts X X X X ..... e assessment was completed on an income of Rs. 50,039. The ITO assessed the business income 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 13th March, 1975. 4. On 28th Feb., 1977, the CIT acting under s. 263 of the IT Act issued a notice to the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... peal or in the petition raising an additional ground. 7. Taking the last ground first, we find that the assessee was given sufficient time to represent 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 questions had resulted in an order which was prejudicia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rendered by the various High Courts and even the Supreme Court appear to follow the Principles 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 Tejaji Farasram Kharwala's case (2) but distinguished the same on fact. In Amrit Lal Bhogilal Co. (3) the law as stated by their Lordships of the Supreme Court can be summarized as follows. If 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, against which no appeal lies. In the above cited case, the Commission ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 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 Tejaji Farasram 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 Kalloram 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 proposition that the Commissioner has power to revise the order of the ITO which has been a subject matter of an ..... X X X X Extracts X X X X X X X X Extracts X X X X
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