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TMI Blog1987 (9) TMI 67X X X X Extracts X X X X X X X X Extracts X X X X ..... so provides when the power has to be exercised. In the instant case, the case of consequence was made by IAC (Asstt.) and the Act provides for cancellation of an order if it is found to be erroneous and prejudicial to interests of the revenue in respect of an order passed by an ITO. By means of an Explanation, which was introduced, effective from 1-10-1984, it has been clarified that the term 'ITO' would also include IAC (Asstt.) with specific reference to sec. 125A (4). This amendment having been brought into the statute book only with effect from 1-10-1984, it could not be given effect to for an order passed earlier to that date. The order of assessment is dated 1st February, 1982 and the order of the Commissioner is dated 28th January, 1 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... anation contained in sec. 263 and had held that the term 'ITO' included 'IAC (Asstt.)' also. He also relied on several Tribunal's decisions - East Coast Marine Products (P.) Ltd. v. ITO (1973) 4 ITD 73 (Hyd.)(SB), Salonah tea Co. Ltd. v. ITO (1984) 8 ITD 710 (Cal.), M. A. Lateef v. IAC (1985) 14 ITD 68 (Hyd.), Indian Telephone Industries Ltd. v. IAC (1984) 10 ITD 338 (Bang.) and Apeejay Structural Works (P.) Ltd. v. IAC (1984) 10 ITD 542 (Cal.). The plea further raised was that the notice issued by Commissioner calling for the explanation categorically indicated that the deduction u/s 80p was granted without proper enquiry. Since no enquiry was made, the setting aside was proper for which reliance was placed on Rampyari Devi Saraogi v. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above clauses were introduced simultaneously, amendments were made in sec. 246 as well as sec. 264 but somehow or the other the Legislature, it appears, overlooked the provisions contained in section 263. The provision as contained in sec. 263 sub-sec. (1) reads as under : "263. (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers 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 on opportunity of being head and after making or causing to be made such enquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s or for performance are discharging the functions of an ITO and considering their status, the Legislatures have provided that sections 144A and 144B would not become operational as far as the assessment made by them. This is followed by the fact that the appeal against their orders shall lie to CIT (A). The Legislature perhaps initially did not think of any necessity of introducing the Explanation as perhaps they felt that sub-sec. (4) of sec. 125 A was absolutely clear and obvious that in those circumstance, IAC being ITO would be squarely covered or is covered u/s 263 for the Commissioner to revise the orders. Consequently, perhaps objections being raised on technicalities, the Legislatures thought it worth-while to clarify the position ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mendment contained in sub-sec. (2) of section 263. To this conclusion we have come to, in view of the fact that otherwise the provisions contained in the statute would become nugatory. It is also our view that the Legislatures wanted a cut off date in respect of the revision of orders passed by authorities below which was earlier to be made within a period of two years from the date of the orders so sought to be revised, which by virtue of the amendment the two years would run from the end of the financial year in which the order sought to be revised has been passed. In these circumstances, the reliance placed on Schrader Scovill Duncan Ltd.'s case, Special Bench, where an Explanation was introduced mentioning therein the effective date as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e orders passed by the Inspecting Assistant Commissioner (Assessment), in exercise of powers conferred on him by virtue of an order made under subsection (1) of section 125 A of the Act, are subject to revision under section 263 of the Act, in accordance with the provisions of that section. Therefore, in our opinion, the Tribunal was justified in holding that the Commissioner of Income-tax was competent to revise under section 263 of the Act, in accordance with the provisions of that section. Therefore, in our opinion, the Tribunal was justified in holding that the Commissioner of Income-tax was competent to revise under section 263 of the Act, the order passed by the Inspecting Assistant Commissioner (Assessment). Our answer to the first q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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