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TMI Blog1998 (3) TMI 74X X X X Extracts X X X X X X X X Extracts X X X X ..... to the assessment years 1980-81 and 1981-82 are legal and valid ?" The assessee-company derives its income from business as an investment company. The assessment years involved are 1980-81 and 1981-82. The original assessment for the above assessment years were completed on December 22, 1982 and March 23, 1983, respectively, In a search at the premises of the assessee on September 23, 1983, certain papers were seized and on the basis of those papers and on a perusal of the assessment proceedings for the above referred years, the Commissioner of Income-tax had initiated proceedings under section 263 of the Act, he found that the assessment orders passed by the Income-tax Officer for these years are erroneous and prejudicial to the interest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e amount in question correctly and whether the claim was allowed rightly or not, was a question of fact. For the assessment year 1980-81, the application was also rejected on the ground that when the order of the Income-tax Officer was merged with the order of the Commissioner of Income-tax (Appeals), the Commissioner of Income-tax thereafter had no authority to revise that order and that reasoning has not been challenged in the form in the application under section 256(1) or (2) question. Therefore, the reference for 1980-81 on the ground whether the Tribunal was justified in holding that the order of the Income-tax Officer was neither erroneous nor prejudicial to the interests of the Revenue, becomes a question of academic interest. An a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... reliance on a decision of the apex court in the case of Laksmiratan Cotton Mills Co. Ltd. v. CIT (1969] 73 ITR 634 and CIT v. Smt. Anusuya Devi [1968] 68 ITR 750 (SC). Heard learned counsel for the parties. The admitted fact is that the question reframed by this court was not proposed in an application under section 256(1) or in an application under section 256(2). The question proposed in the application under section 256(1) and 256 (2) reads as under : "Whether the Tribunal was justified in law in holding that the Income-tax Officer, while completing the assessment for the assessment year 1980-81/1981-82 committed no error prejudicial to the interests of the Revenue and in that view cancelling the order of the Commissioner of Income- ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... can argue on the ground of merger that once the order of the Income-tax Officer merges with the order of the Commissioner of Income-tax (Appeals), thereafter the Commissioner of Income-tax has no power to revise that assessment order invoking the provisions of section 263 of the Act. In the case of CIT v. Smt. Anusuya Devi [1968] 68 ITR 750 (SC) at page 756 their Lordships observed as follows: "We are unable, therefore, to hold that at the hearing of a reference pursuant to an order calling upon the Tribunal to state a case, the High Court must proceed to answer the question without considering whether it arises out of the order of the Tribunal, whether it is a question of law, or whether it is academic, unnecessary or irrelevant." In a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e the question is reframed by this court, the scope of the question has been widened and indirectly it is an additional question which was called for by this court. This was not in the application under section 256(1) and 256(2) filed by the Revenue. When this court has no power to call a statement for additional question which has not been proposed in the applications under section 256(1) and 256(2) of the Act, therefore, now, the question is restricted to the extent that whether the order of the Income-tax Officer was erroneous and prejudicial to the interests of the Revenue. When the reasoning that after merger of the order of the Income-tax Officer with the order of the Commissioner of Income-tax (Appeals), the Commissioner of Income-t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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