9911796707
TMI Blog1985 (1) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... were furnished by the assessee in the course of the assessment proceedings of this amount. Two of the components thereon were bonus of Rs. 20,16,925 and productivity bonus of Rs. 11,77,668. In an order-sheet entry dt. 23rd Oct., 1980, the ITO had referred to the handing over to the authorised representative of the assessee the usual questionnaire and of his having further requested for particulars, in particular, apart from other items, regarding "productivity bonus". A letter was filed by the assessee dt. 29th Oct., 1980, in which the following appeared: "6. To say why productivity bonus of Rs. 11,77,658 and terminal payments or Rs. 28,216 were paid: The productivity bonus of Rs. 11,77,658 was paid by my clients under the terms of an agreement entered into by them with the employees. The detail for the payments of Rs. 28,216 referred to as terminal payments are not readily available, but these represent only other payments made to the employees." After this, there were other hearings and further details were called for. Another letter was filed on 12th March, 1981 and the following appeared regarding productivity bonus: "9. To furnish details of productivity bonus: It is subm ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT's jurisdiction was not shut out to rectify any error regarding such item. The CIT on merits did not agree with the assessee that productivity bonus was not hit by the ceiling prescribed under s. 36(1)(ii). Eventually, therefore, in exercise of his powers under s. 263, the CIT directed the ITO to withdraw excess allowance of bonus amounting to Rs. 8,21,733, which was allowed in the assessment. 3. Before us, the ld. counsel for the assessee put forth three propositions in support of the contention that the CIT had no jurisdiction to exercise powers under s. 263. 4. The first contention was that since the assessment was made after obtaining instructions of the IAC under s. 144B, the CIT could not revise the assessment order as passed by the ITO. For this, the ld. counsel sought to rely on the decision of the Special Bench of the Tribunal in East Coast Marine Products (P) Ltd. vs. ITO (1983) 4 ITD 73 (Hyd) (SB). The ld. Departmental representative opposed the plea and submitted that on the aspect of bonus, no specific directions had been sought from or had been given by the IAC and, therefore, the CIT's jurisdiction was not shut out. The Special Bench in the order referred to had ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings under s. 34(1)(a). The High Court had held that on the facts the CIT was precluded from revising the aforesaid order by reason of s. 33B(2)(a) of the Act,1922, viz., that provision precluded the CIT from revising an order of reassessment made under the provisions of s. 34 of the aforesaid Act. In the aforesaid decision, their Lordships had stated that in every case it had to be determined on the facts and circumstances thereof as to what the expression used by the ITO, i.e., "proceedings filed", or "proceedings disposed of", or "filed", connote or means. Their Lordships observed that in one set of circumstances, it may not amount to an order of assessment or reassessment whereas in another set of circumstances it may so amount. In the case of Esthuri Aswathiah vs. ITO (1961) 41 ITR 539 (SC) where a nil return was filed and the ITO wrote "no proceedings", the Supreme Court held that it had to be construed that the assessed income was nil. In the case of CIT vs. Bidhu Bhusan Sarkar (1967) 63 ITR 278 (SC) where the expression used was "filed", the Supreme Court observed that it meant that the case was disposed of and nothing remained and at p. 284, their Lordship further o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atio of the decision of the Special Bench of the Tribunal in the case of Dwarkadas & Co. (P) Ltd. vs. ITO (1982) 1 ITD 303 (Bom) (SB), the jurisdiction under s. 263 stood ousted. The ld. Departmental Representative, on the other hands, submitted that the question of admissibility of bonus paid as a deduction did not figure in the grounds of appeal before the CIT(A) and was hence not a matter considered by him. In view of the ratio of the judgments of the Madras High Court in the case of CIT vs. City Palayacot Co. (1980) 15 CTR (Mad) 365 : (1980) 122 ITR 430 (Mad), Puthuthotam Estates (1943) Ltd. vs. State of Tamil Nadu (19880) 125 ITR 41 (Mad) and CIT vs. Eimco K. C. P. Ltd. (1984) 147 ITR 603 (Mad) he stated that the jurisdiction of the CIT did not stand shut out. He also submitted that there were decisions of other High Courts which were to the effect that unless a point was specifically taken up and considered by the CIT(A), the jurisdiction of the CIT to pass an order of revision under s. 263 was not shut out. 8. We have considered the rival submissions. The Special Bench of the Tribunal in the case of Dwarkadas & Co. (P) Ltd. vs. ITO (1982) 1 ITD 303 (Bom) (SB) had held that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... a matter in the process of assessment. What the ITO did was to directly consider the admissibility of the bonus claim as a deduction. It was the case where the ITO had applied his mind to the subject-matter and because he took the view that the entire amount was admissible, no specific further discussion appeared in the assessment order. This is, therefore, a matter on which the first appellate authority could have exercised the powers of enhancement if it was considered called for. Therefore, according to the ratio of the decision of the Special Bench of the Tribunal in the case of Dwarkadas & Co. (P) Ltd. vs. ITO (1982) 1 ITD 303 (Bom) (SB), the jurisdiction of the CIT to effect the revision by exercise of power under s. 263 stood shut out. 9. We have now to see whether the decision of the Madras High Court relied on by the ld. Departmental Representative alter the position on the facts of the present case. In CIT vs. City Palayacot Co. (1980) 15 CTR (Mad) 365 : (1980) 122 ITR 430 (Mad), the Madras High Court has clearly laid down that the doctrine of merger would have to be considered in the light of what was in controversy before the appellate authority or what could have been ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
