2000 (12) TMI 66

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..... n short, "the Tribunal"), has referred the following question, under section 256(1) of the Income-tax Act, 1961 (in short "the Act"), for the opinion of this court : "Whether, on the facts and in the circumstances of the case, the Tribunal is legally correct in holding that the Commissioner of Income-tax had no jurisdiction under section 263 to cancel the Income-tax Officer's order dated Februar .....

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..... was completed on 18th October, 1975. On 31st December, 1976, the assessee approached the Income-tax Officer for rectification of the order under section 154 of the Act taking the plea that terminal benefits were entirely exempted from tax in view of the decision of the Bombay Bench of the Tribunal in the case of one P. Muralidharan. Accepting the said contention, the Income-tax Officer passed an .....

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..... rcular, the Central Board of Direct Taxes (in short. "the Board") had in their letter No. 173/126-76-II(Al), dated 30th May, 1976, accepted the decision of the Bombay Bench as laying down the correct position in law. The Commissioner of Income-tax had, therefore, directed that whenever an assessee applied under section 154 pointing out the mistake in its assessment, the same should be rectified fo .....

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..... that order is found to be erroneous or prejudicial to the interests of the Revenue under section 263 is the power to the Commissioner of Income-tax to rectify it but when an Income-tax Officer passes an order not in his own discretion or wisdom but following the directions of the Commissioner of Income-tax who follows in turn the direction of the Central Board of Direct Taxes, to whom both of the .....

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..... e of service of notice. In view of the factual position highlighted by the Tribunal, the relevant portion of which has been quoted above, the decision of this court in C. K. Karunakaran v. Union of India [1981] 127 ITR 136 applies to the facts of the case. On the merits also the assessee has to succeed. The question referred is, therefore, of academic interest and we decline to answer the same. .....

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