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TMI Blog2003 (4) TMI 77X X X X Extracts X X X X X X X X Extracts X X X X ..... Inspecting Assistant Commissioner under section 144B(4) of the Act, we hold that the Tribunal has not committed any error in allowing the appeal of the assessee and quashing the order of the Commissioner of Income-tax passed under section 263 of the Act and in restoring the order of the Income-tax Officer. The question referred to us is, therefore, answered in favour of the assessee and against the Revenue X X X X Extracts X X X X X X X X Extracts X X X X ..... e purpose of relief under section 80J in accordance with law. The Commissioner found that the relief under section 80J was not properly worked out, because the Income-tax Officer had included a sum of Rs. 49,88,158 on the head office account in computing the capital. The Tribunal allowing the appeal of the assessee held that since the Income-tax Officer had made an order pursuant to the direction of the Inspecting Assistant Commissioner under section 144B(4) of the Act, the Commissioner could not have exercised his revisional powers under section 263 of the Act. The Tribunal upheld the preliminary objection of the assessee against the exercise of powers under section 263 by the Commissioner on that ground. As regards the relief under secti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... section 80J was already considered by the Commissioner of Income-tax (Appeals), who had made an order earlier than the revisional order made by the Commissioner under section 263, the order of the Income-tax Officer as regards such deduction under section 80J had already merged in the appellate order. There was, therefore, no order of the Income-tax Officer which could have been revised by the Commissioner under section 263 on the question of grant of benefit of section 80J of the Act to the assessee. The Supreme Court in the case of CIT v. Shri Arbuda Mills Ltd. [1998] 231 ITR 50, in the context of the provisions of section 263(1) of the Act, referring to the Explanation, clause (c) thereof, held that the powers of the Commissioner under ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he uniformity of interpretation given by the several High Courts to the provisions of section 263 read with section 144B, upheld the decision of the High Court that the order made by the Income-tax Officer on the basis of directions given by the Inspecting Assistant Commissioner under section 144B was revisable by the Commissioner. The Supreme Court held that in its view, having regard to the subsequent amendments to the Act issued from time to time there was no scope for limiting the phrase "order passed by the Income-tax Officer" in section 263 to exclude orders passed by the Income-tax Officer on the directions of a superior authority either under section 144A or 144B of the Act. In our view, therefore, the Tribunal committed an error in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the provisions of section 263(1) cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, and it is only when the order is erroneous that the section will be attracted. The Supreme Court in Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 has observed that the phrase "prejudicial to the interests of the Revenue" has to be read in conjunction with an erroneous order passed by the Assessing Officer. It was held that when two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law. It ..... X X X X Extracts X X X X X X X X Extracts X X X X
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