9911796707
TMI Blog1988 (5) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner passed the following order on 20-2-1981 : "As the question has not been examined by the ITO as to whether the assessee is a financial company entitled to the benefit as contemplated by the exclusion in section 40A (8). I would set aside the assessments to enable the ITO to examine the matter afresh and then decide the matter according to law after giving reasonable opportunity to the petitioner of being heard in the matter." The ITO giving effect to that order of the Commissioner cancelled the disallowance by his order dated 19-7-1981. In that order, the ITO sought to give effect to the new section 80AA amending section 80M thus reducing the relief which had been given under section 80M by his original assessment order da ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e original order. It is this action of the ITO which was challenged before the Commissioner who has however upheld it. The same grounds which were taken before the Commissioner were taken before me. The assessee's contentions were as follows; (a) That the original order of the ITO merged into the Commissioner's order under section 264 and the consequent order of the ITO giving effect to it and that the rectification could be made on the original order. (b) the original order of the ITO merged in the order of the CIT (A) and therefore the original order could not be rectified. (c) since the CIT (A) had observed as quoted above, the ITO could not withdraw the benefit under section 80M as originally granted. (d) the rectification c ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under section. 264, which enables the Commissioner to pass an order only in respect of those matters which are not covered under section 263. Therefore, no order to remedy the prejudice to the Revenue's interest can be passed under section 264. No order prejudicial to the interest of the assessee can be made under section 264. That being so, the decision in the case of P. Muncherji Co. is not applicable here. I, therefore, hold that the original order of the ITO did not merge in the Commissioner's order under section 264 or in the order giving effect to it. 4. The next question is whether the rectification order is invalid on the ground of merger of the ITO's order with the appellate order of the Commissioner. The appellate order of t ..... X X X X Extracts X X X X X X X X Extracts X X X X
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