The Appellate Tribunal held that the issues on which the ...

Tribunal Rules Reassessment and Revision Orders Address Separate Issues; Commissioner's Revision Struck Down.

November 8, 2024

Case Laws     Income Tax     AT

The Appellate Tribunal held that the issues on which the reassessment order was passed u/s 147 read with Section 143(3) and the issues on which the revision order was passed u/s 263 were entirely different. The Assessing Officer had made inquiries during the reassessment proceedings in line with the recorded reasons and accepted the returned income without making any additions. Section 263 does not empower the Commissioner to circumvent provisions by directing an inquiry on an independent issue when no addition was made based on the grounds for reopening. The Tribunal applied the legal maxim 'sublato fundamento cadit opus,' meaning 'the foundation being removed, the superstructure falls.' If the initial action is not in consonance with law, all subsequent proceedings would fail as illegality strikes at the root. The exercise of suo motu revision power is a quasi-judicial act based on the formation of an opinion regarding the existence of adequate material to satisfy that the Assessing Officer's decision is erroneous and prejudicial to revenue interests. The revision of the order passed u/s 147 read with Section 143(3) by the Commissioner u/s 263, being contrary to the mandate of law, could not be sustained and was liable to be struck down.

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