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TMI Blog2008 (5) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... d September 30, 2005, passed by the Income-tax Appellate Tribunal, Delhi Bench "A", Delhi (hereinafter referred as "the ITAT"), in Income-tax Appeal No. 2173 (M) of 2000, for the assessment year 1995-96, whereby the appeal of the respondent/assessee was allowed by the Tribunal and the order passed by the Commissioner of Income-tax (hereinafter referred as "the CIT"), under section 263 of the aforesaid Act, is set aside. 2. Heard learned counsel for the parties and perused the record. Following are the substantial questions of law involved in this appeal: "1. Whether the Income-tax Appellate Tribunal was justified in law in holding that the Commissioner of Income-tax lost his jurisdiction after the application of the assessee was acc ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Natural Gas Commission (hereinafter referred as "the ONGC"), McDermott ETPM East Inc. and Mazagaon Dock Ltd. The return submitted by the respondent/assessee for the aforesaid a year shows that it received US $ 18,95,870 relating to the work done outside India and the amount of US $ 84,20,514 with regard to the work done inside India. The return was filed with the relevant invoices and details. The Assessing Officer (hereinafter referred as "the AO"), on scrutiny of the return and the relevant contract, passed order under section 143(3) of the Income-tax Act on March 26, 1998, wherein he assessed only 50 per cent. of the total amount of mobilization/demobilization charges received by the respondent/assessee as an amount received in respect o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e against the said notice, the Commissioner of Income-tax passed the order dated February 9, 2000, under section 263 of the Act, directing the Assessing Officer to pass the assessment order de novo. The said order was challenged by the respondent/ assessee before the Income-tax Appellate Tribunal, which allowed the appeal, vide the impugned order dated September 30, 2005, and set aside nthe order passed by the Commissioner of Income-tax, under section 263 of the Act. Hence, this appeal by the Revenue. 5. Before further discussion, we think it just and proper to mention here, the relevant provision of law applicable to the case. Sub-section (3) and sub-section (4) of section 90 contained in Chapter IV of the Finance (No. 2) Act, 1998, re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and settlement order is passed under section 88 of the aforesaid Act, no matter covered under the settlement can be reopened as provided in sub-section (3) of section 90 of the Finance (No. 2) Act, 1998. Admittedly, in the present case, a declaration is made by the respondent/assessee and a settlement order was passed by the designated authority who issue Form No. 2A under the aforesaid Act. The question now is whether, revisional power under section 263 of the Income-tax Act, 1961, could have been exercised by the Commissioner of Income-tax, or not, in the matter? 7. Mr. Arvind Vashistha, learned standing counsel for the Revenue/appellant, argued that what is covered under the KVSS is the liability relating to arrears of tax and a set ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... onal jurisdiction of the Commissioner of Income-tax under section 263 of the Income-tax Act, 1961, cannot be said to be "other proceedings" as the notice issued by the Commissioner of Income-tax to the respondent/assessee pertains to the same proceedings of the KVSS questioning whether the matter settled by the Assessing Officer was covered under the said Scheme, or not? As such, the order passed by the Commissioner of Income-tax under section 263 of the Act cannot be said to be without jurisdiction and the view taken by the Income-tax Appellate Tribunal on that point cannot be sustained. 10. Accordingly, the substantial questions of law relating to the jurisdiction the Commissioner of Income-tax to exercise the revisional jurisdiction ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rcised by the Commissioner of Income-tax. What is required under section 263 of the Act for cancelling an assessment under the said section is that not only the Commissioner of Income-tax should have reason to believe that the order passed by the Assessing Officer is prejudicial to the interests of the Revenue but also erroneous in law. The same view has been expressed by the apex court in Malabar Industrial Company Ltd. v. CIT [2000] 243 ITR 83. Since, as observed by the Income-tax Appellate Tribunal also, there appears to be no material on record to issue notice in the present case to cancel the assessment made by the Assessing Officer, to exercise powers under section 263 of the Act, as such, the order passed by the Income-tax Appell ..... X X X X Extracts X X X X X X X X Extracts X X X X
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