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TMI Blog1978 (2) TMI 86X X X X Extracts X X X X X X X X Extracts X X X X ..... 63 of the Income-tax Act, 1961, after making further investigation?" We are concerned in this case with the assessment years 1968-69 and 1969-70, relevant accounting years being the year ending 30th September, 1967, and 30th September, 1968. The assessee is a public limited company. The Income-tax Officer treated the assessee-company as a non-manufacturing company in which public were substantially interested. Accordingly, the Income-tax Officer charged income-tax on the income so computed at the lower rates prescribed as compared to the rates of income-tax prescribed for companies in which the public were not substantially interested. In the assessment orders, the Income-tax Officer did not give any reasons as to why he treated the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d equity shareholdings. According to the assessee, the Additional Commissioner had erred by taking into consideration the holdings of only equity shares and coming to the conclusion that only 5 shareholders were controlling the majority of the equity shares of the company, and, accordingly, it could not be held that the affairs of the company during the two relevant years were controlled by five persons. Attention of the Tribunal was drawn to section 87 of the Companies Act, 1956, which did not envisage that the preference shareholders were not connected with the control and management of the affairs of the company. Furthermore, according to the articles of the company, both were to take part in the voting rights. It was urged that, in vie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s that the Additional Commissioner had overlooked the effect of section 90 of the Companies Act and fell into the error in making the impugned order. The Tribunal in those circumstances remanded the matter to the Additional Commissioner of Income-tax with the views of the Tribunal and asked the Commissioner to consider the advisability of passing an order under section 263 of the Income-tax Act, 1961. In those circumstances, the question as mentioned hereinbefore has been referred to this court. The issue challenges the jurisdiction of the Tribunal to restore the the appeal to the file of the Additional Commissioner with direction upon the said Commissioner to consider the advisability of passing fresh orders under section 263 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Tribunal. Section 263 of the Income-tax Act, 1961, authorises the Commissioner to call for and examine the records of any proceedings under the Act and thereupon if he considers that any order passed therein by the Income-tax Officer was erroneous, in so far as it was prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making such enquiries to be made, pass such an order as the circumstances of the case may justify. In the instant case the question is whether the Additional Commissioner was justified in considering the order of the Income-tax Officer which he set aside to be erroneous. One of the ingredients for considering whether the order passed by the Income-tax Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 977] 109 ITR 229 (Cal), where it was held that the power of revision under section 263 of the Income-tax Act, 1961, could only be exercised if certain conditions were satisfied, viz., the Commissioner must call for and examine the records of the proceedings under the Act and, secondly, the Commissioner must consider the order passed by the Income-tax Officer to be erroneous in so far as it was prejudicial to the interests of the revenue. The principle that the order of the Commissioner must be on fulfilment of the conditions, as enjoined under section 263 of the Act, does not, in our opinion, militate against the view that the Tribunal is authorised, in an appropriate case, to direct the Commissioner to consider whether in his view the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the assessee. But the Appellate Tribunal by remanding the matter to the Income-tax Officer and directing him to come to a finding on the same point again after bringing on record further evidence and after making further investigation and examining further accounts had opened the scope of adducing further evidence depending on the question whether the Tribunal had jurisdiction or not to do, a point which is not relevant for our present purpose. In the case of M. R. M. Periannan Chettiar v. Commissioner of Income-tax [1960] 39 ITR 159 (Mad), the Madras High Court found that the order of the Tribunal amounted to directing a fresh assessment and in those circumstances the Tribunal had no jurisdiction to make an order of remand. The facts of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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