9911796707
TMI Blog2005 (12) TMI 73X X X X Extracts X X X X X X X X Extracts X X X X ..... ta J.-By this application the petitioner company has impugned a notice under section 263 of the Income-tax Act, 1961. By this notice the Commissioner wanted to exercise his jurisdiction under section 263 of the said Act suo motu having felt that the order of assessment particularly deduction for investment allowance by the Assessing Officer is prejudicial to the interests of the Revenue for the assessment years of 1980-81 to 1983-84. Ordinarily this sort of notice cannot be interfered with by this court in exercise of writ jurisdiction. At the ad interim stage, this court did not grant stay of operation of the aforesaid impugned notice and asked the Commissioner to complete hearing of the matter but effect to the final order was not be given without the leave of the court. On August 23, 2005, the matter was taken up for hearing. I passed an order directing the parties to supply information relating to the state of affairs pursuant to the impugned notice. On the date of hearing it was informed that hearing was taken but no order has been passed. By my earlier order I also directed to produce the final order passed, if any. The learned counsel for the Revenue submits that he has re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stated that the petitioner has been carrying on the business of manufacturing and/or processing of concrete piles. The said concrete piles are manufactured by pouring into a steel cage the raw materials viz. sand, gravels, stone chips and cement mixed mechanically in appropriate proportion. Therefore, an independent movable article is brought into existence as a product of the same. The said product is an outcome of the manufacturing process carried on by the petitioner which is the end of the piling process, and an independent entity which is normally described as concrete piles. In the assessment year 1964-65 the Income-tax Officer refused to accept that the petitioner was a company and had been carrying on manufacturing activity and this matter thereafter had been taken successfully to the Income-tax Appellate Tribunal and it was held that the petitioner was undoubtedly engaged in the manufacturing of goods and as such the petitioner was entitled to get the benefit of reduction of rate of tax. In view of the aforesaid factual position the definition of industrial company in the relevant Finance (No. 2) Act of 1980 is satisfied. Consequently investment allowance for the respect ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... bhatwala [1992] 198 ITR 144 and then a judgment of the Kerala High Court reported in Bhagheeratha Engineering Ltd. v. CIT [1997] 227 ITR 504. He further submits that when a particular point is a debatable issue the Commissioner of Income-tax can exercise his jurisdiction under section 263 of the Income-tax Act. Having considered the respective contentions of learned counsel for the parties the point herein involved is that as to whether on the basis of all the facts and circumstances as stated in the petition as well as in the affidavit-in-opposition and the notice itself the Commissioner of Income-tax should have issued notice under section 263 of the Income-tax Act or not. In order to understand the scope of the aforesaid section for the purpose of exercise of jurisdiction the same is set out hereunder: "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 interest 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 nece ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n the same would have been exigible to tax, sequally-the Department has certainly lost the revenue. Hence one of the conditions is fulfilled. Now, it has to be examined whether the orders are erroneous or not, meaning thereby having regard to the facts and circumstances of this case whether deduction for investment allowance is correctly granted by applying the law or not. From the records I find that the Income-tax Officer did not disclose any material on which action is sought to be taken. In the petition it has been stated and also in the notice that the petitioner company has undertaken manufacturing process of concrete piles. The said concrete piles are manufactured by pouring into a steel cage, raw materials viz. sand, gravel, stone-chips and cement mixed mechanically in appropriate proportion. This fact has not been denied and disputed in the affidavit-in-opposition by the respondent. According to me, production and manufacturing process means inputting raw materials and mixing the same if a new thing or material emerge then certainly it is a manufacturing process. The concrete piles are done with a process of mixing, and with the process a third article emerges and it is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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