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TMI Blog2012 (6) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... sales account as well other sub-accounts in which the assessee claims to have made entries regarding such income - there was a shift in the stand of the Commissioner as to whether it was a case for revision on the ground that income as stated was required to be added to the income assessed or whether it was a case for revision on the ground that the AO did not make necessary verification about the related transactions – as the revision order is passed on the ground other than the grounds for which revision proceedings are initiated, the same cannot be sustainable in law – in favour of assessee. - ITA No.663/Kol/2010 - - - Dated:- 30-3-2012 - Pramod Kumar, Mahavir Singh, JJ. For Appellants: S Adak H Agarwal For Respondent: Niraj Kumar ORDER Per: Pramod Kumar: 1. By way of this appeal, the assessee-appellant has called into question correctness of learned Commissioner s order dated 29th January, 2010 passed under section 263 read with section 143(3) of the Income Tax Act, 1961 for the assessment year 2002-03, on the following grounds : - (1) That on the facts and in the circumstances of the case, the impugned order passed u/s. 263 by the ld. Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... issue, that upto the accounting year relevant to assessment year 2002-03, the income from services was entered in the books of account under a separate head called Job Work Charges and it was included under the head Other Income in the audited accounts. It was also submitted that the assessee changed the way of accounting income from services and repairs with effect from accounting year to relevant assessment year 2002-03 and that subsequent thereto income from services is disclosed under the head sales . The assessee also pointed out that income from repairs of machinery of Rs.55,00,000/ - and income from services of Rs.2,41,81,436/- were grouped under the head Sales , copies of ledger account and invoices relating to repairs of machinery ns income from services were also produced before the learned Commissioner. On these facts, learned Commissioner exercised his powers under section 263 and remitted the matter to the file of the Assessing Officer by observing as follows : - 6. The claim of the assessee requires verification. Therefore, the assessment order passed u/s. 143(3)/147 dated 07.12.2007 is set aside. The Assessing Officer is directed to call for the original vo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on made by the assessee, the learned Commissioner himself was not sure whether it is a correct stand. It was for this reason that as against decision on merits, which was indicated in the showcause notice, in the revision order the learned Commissioner merely referred the matter to the Assessing Officer for verification of certain aspects. It is thus clear that there was a shift in the stand of the Commissioner as to whether it was a case for revision on the ground that income on account of repairs of machinery and contract receipts was required to be added to the income assessed in the hands of the assessee or whether it was a case for revision on the ground that the Assessing Officer did not make necessary verification about the related transactions. The reason given in the show-cause not ice is former, while the reason for which revision powers are finally exercised in the impugned order is latter. As to whether such an exercise of revision powers, on the ground other than the grounds on revision, has set out in the show-cause not ice, could be held to be sustainable in law. We find guidance from the decision of Coordinate Bench of Tribunal in the case of Max Investments Limite ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The other judgment which supports the case of the assessee is that of the Punjab and Haryana High Court in CIT v. Jagadhri Electric Supply and Industrial Co. Ltd. [1983] 140 ITR 490 The nature of the jurisdiction of the CIT under section 263 and the powers of the Tribunal while dealing with an appeal against the order passed under that section were explained in that decision. The CIT had found the order of the Assessing Officer allowing continuation of registration to the assessee-firm to be erroneous on the ground that the actual distribution of the profits was different from the ratio mentioned in the deed of partnership. The Tribunal set aside the order of the CIT but while doing so observed that there was a change in the number of partner s from 10 to 11 which fact had not been taken into account by the Assessing Officer when he granted registration for the firm for the assessment year 1966-67 and thus the grant of registration was erroneous. On the basis of this observation it was argued before the High Court on behalf of the revenue that the Tribunal ought to have sustained the order of the CIT on that ground. Repelling the contention, it was held by the High Court as under ( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d earlier considered not fit for taking action under the section, will have to be set aside as not based on any ground which may justify his belief that the order passed by the Assessing Officer was erroneous insofar as it is prejudicial to the interests of the revenue............. 7. It is thus clear that in a situation in which the revision order is passed on the ground other than the grounds for which revision proceedings are initiated, the same cannot be sustainable in law. That apart, in the impugned order we have also not iced that the learned Commissioner has not faulted the explanation given by the assessee and has merely remitted the matter to the file of Assessing Officer for verification of factual elements embedded in explanation as given by the assessee. This approach is also not sustainable in law in view of the law laid down by the Hon ble Bombay High Court in the case of CIT vs. - Gabriel India Limited [203 ITR 108] , wherein Their Lordships have, inter alia, observed as follow : - .. in the instant case, the Commissioner himself, even after initiating proceedings for revision and hearing the assessee, could not say that the allowance of the claim of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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