9911796707
TMI Blog1982 (9) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... to prepare accounts for the period of 18 months from 1st January, 1976. The letter stated that the Government's annual newsprint policy covered the period April to March and was usually announced in May. It, therefore, became unrealistic for the petitioners to work on the budget and review the performance for business decisions and action for almost five months in their accounting year. By changing the accounting year to July/June, this difficulty would be overcome and it would facilitate decision making. On 28th February, 1976, the budget proposals were announced and contained some reliefs to newspapers. On 3rd April, 1976, the petitioners wrote to their ITO modifying the request made in their letter dated 25th February, 1976, and as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . On 3rd May, 1976, the petitioners informed the ITO that they were so agreeable. Appropriate resolutions were passed by the petitioners' board and accounts were prepared on the aforesaid basis. On 26th May, 1976, the Finance Bill received assent. It incorporated the relief to newspapers. On 24th January, 1977, the CIT, Bombay City VI, addressed to the petitioners a notice under s. 263 of the Act. The notice stated that the ITO's order dated 15th April, 1976, giving approval to the change in the previous year was erroneous and prejudicial to the interests of the Revenue. At the time when the order was made the Finance Bill had been introduced but its provisions had not been considered. The petitioners' income from 1St January, 1975, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ding to law after safeguarding the interests of the Revenue and after allowing an opportunity to the petitioners to be heard. On 21st March, 1979, the first respondent, then the petitioners' ITO, passed this order : " The assessee has applied, vide their letters dated 25-2-1976 and 3-4-1976, that they may be permitted to change the previous year from the calendar year to the year ending on 30th April, 1976, The change requested for was originally granted by my predecessor, vide his letter dated 15th April, 1976. The CIT, vide his order under section 263 dated 25-6-1977 has set aside the above-mentioned change in the previous year. After a careful consideration of the issues involved, I am of the opinion that the change requested for, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that any order passed therein by the Income-tax Officer is erroneous in so far as it is prejudicial to the interests 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 necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." It is thus clear that the Commissioner can only revise: (a) an order, and (b) an order that is prejudicial to the interests of the Revenue. It was Mr. Kolah's submission that under s. 3(4) of the Act, accord or refusal of consent was not required to be given by the passing of an order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore, not open to the Commissioner to take the Finance Bill that became law subsequent to the ITO's order into account. Mr. Joshi is right when he points out that at the time the ITO passed the order the budget proposals had been announced and were validly taken into consideration by the Commissioner in passing the order under s. 263. Mr. Kolah submitted that the doctrine of promissory estoppel applied in that the petitioners bad acted upon the order granting consent and had prepared their accounts accordingly and had, therefore, altered their position to their prejudice. This argument can be disposed of simply: no estoppel can operate against the provisions of a statute. Section 263 of the Act gave the Commissioner the power to revi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nditions should not be passed without first hearing the assessee. The petitioners were not heard before the order refusing consent was passed. It would appear from a perusal of the 1st respondent's order that the only real reason for passing it was that the Commissioner had in the order under s. 263 of the Act said that the original order granting consent affected the interests of the Revenue. The 1st respondent failed to notice that the order under s. 263 required him to hear the petitioners and to prescribe conditions that would offset the loss to the Revenue. In the circumstances, the order of the 1st respondent under s. 3(4) dated 21st March, 1979, must be quashed and set aside. The ITO, Company Circle VI(3), shall consider the petiti ..... X X X X Extracts X X X X X X X X Extracts X X X X
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