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TMI Blog2009 (2) TMI 431X X X X Extracts X X X X X X X X Extracts X X X X ..... nd the reason indicated by the Commissioner were sufficient. The appraisal report was very much relevant for the purpose of making assessment and as such the interference by the Commissioner was justified. - 1, 5 to 19 of 2005 - - - Dated:- 17-2-2009 - AFTAB H. SAIKIA, HRISHIKESH ROY JJ U. Bhuyan for the appellant, V. K. Bhatra, K. Agarwal and Ms. M. Buzarbaruah for the respondent. JUDGMENT The judgment of the court was delivered by 1. Hrishikesh Roy J.-These appeals by the Revenue under section 260A of the Income-tax Act, 1961 (hereinafter referred to as the "IT Act") have been filed to challenge the common order dated October 20, 2004, passed by the Income-tax Appellate Tribunal Guwahati Bench (hereinafter referred to as "the Tribunal"). The Tribunal passed the impugned order in a batch of 16 appeals, filed by the assessees, against the suo motu revisional order passed under section 263 of the Income-tax Act by the Commissioner of Income-tax (CIT), Guwahati-II, whereby the order of the Com-missioner of Income-tax has been quashed and the appeals were disposed of in favour of the assessees. 2. The main question for determination in these cases rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... igation and affording them an opportunity, to controvert the said findings. 9. The exercise of suo motu revisional power by the Commissioner of Income-tax under section 263 of the Income-tax Act was challenged by the aggrieved assessees in the Tribunal, by filing separate appeals. 10. While considering the appeals, the learned Tribunal found that the only ground for exercise of revisional powers, was non-consideration of the appraisal report of the DDIT (Investigation), by the Assessing Officer, while finalizing assessment. The Tribunal further found that the contents of the appraisal report have not been discussed by the Commissioner of Income-tax. Therefore, the Judicial Member of the Tribunal declared that, he is not in a position to gather the basis on which, the Commissioner of Income-tax assumed jurisdiction to pass orders under section 263 of the Income-tax Act. The Tribunal concluded that the Commissioner of Income-tax's order suffers from material defect and accordingly quashed the Commissioner of Income-tax's order. 11. Mr. U. Bhuyan, learned standing counsel of the Income-tax Department submits that there is no infirmity in exercise of suo motu revisional power by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lal Bhogilal and Co. [1958] 34 ITR 130 (SC). 14. Appearing for the assessees, Mr. V. K. Bhatra, learned counsel submits that clear statutory limits on exercise of suo motu revisional powers under the Income-tax Act, 1961, have been imposed and merely because the assessment order is erroneous, unless prejudice to the interest of the Revenue is established, exercise of suo motu revisional power would not be justified in law. 15. The learned counsel also contends that error of the Assessing Officer has to be in the nature of jurisdictional error and in the instant case since there was no jurisdictional error committed by the Assessing Officer, exercise of suo motu revisional power by the Commissioner of Income-tax was not justified. 16. Mr. Bhatra relies on the decisions of this court in Shyam Sunder Agarwal v. State of Assam [2003] 131 STC 70 ; [2003] 1 GLR 448, and also the decision in Bongaigaon Refinery and Petrochemicals Ltd. v. Union of India [2006] 287 ITR 120 (Gauhati) in support of his submissions. 17. He further submits that in the instant cases, exercise of the appellate power under section 260A, which can be exercised only on substantial questions of law, would no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed by the Commissioner of Income-tax. 21. Before examining the submissions made by the learned counsel, it would be appropriate for us to refer to some of the cited decisions to understand the scope of suo motu revisional power of the Commissioner of Income-tax, by referring to the statutory provisions and also interpretations, given by the courts, to the said statutory provisions. 22. Section 263(1) of the Income-tax Act, 1961, is accordingly extracted hereinbelow : "263.(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the (Assessing) Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order therein as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." 23. From a reading of the statutory provisions, it is apparent that the Com-missioner may call for and examine the records of any proceeding un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... judicial to the interest of the Revenue and in such a situation, the Com-missioner has ample justification to exercise his revisional power to cancel the assessment and initiate proceedings for assessment against some other assessee who, according to the income-tax authorities, is liable for the income thereof. 28. The Gujarat High Court in Mukur Corporation [1978] 111 ITR 312 (Guj) has held that when the Income-tax Officer at the stage of making assessment fails to make inquiry into relevant details, such assessment has to be considered as erroneous. If fresh assessment is thereafter ordered by the revisional authority, the only proper course for the revisional authority would be to desist from expressing any final opinion on controversial points. 29. On the submission made on behalf of the assessee that more detailed reasoning should have been indicated by the Commissioner of Income-tax, we find that it is nobody's case that, the finding of the appraisal report of the Investigation team, following the search and seizure made, were not relevant for making the assessments. 30. It is also seen that the Assessing Officer was very much aware about the appraisal report indicting ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xercise of powers under section 263(1) of the Income-tax Act, by the Commissioner of Income-tax cannot be said to be wrongly exercised. 35. It is also submitted that suo motu revisional power by the Commissioner of Income-tax can only be exercised for assessment orders passed in error of jurisdiction. But on a reading of section 263(1), we do not find that the power of the Commissioner is hedged by any such additional conditions. Therefore, we are unable to agree with the view taken by this court in Bongaigaon Refinery and Petrochemicals Ltd. [2006] 287 ITR 120 (Gauhati) and in Shyam Sundar Agarwal [2003] 131 STC 70 ; [2003] 1 GLR 448. The later case, we may note was a case where revisional power under section 36(1) of the Assam General Sales Tax Act, 1993, considered by the court. 36. Our view that additional conditions cannot be read in is consistent with the Supreme Court's decision in CIT v. Amritlal Bhogilal and Co. [1958] 34 ITR 130 where the apex court held that (page 141) : "Whether or not the revisional power can be exercised in a given case must be determined solely by reference to the terms of section 33B itself. Courts would not be justified in imposing additiona ..... X X X X Extracts X X X X X X X X Extracts X X X X
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