Law:

Section:

Section 263 of the Income-tax Act, 1961 [Corresponding to section 33B of the Indian Income-tax Act, 1922] - Revision - Of orders prejudicial to interest of revenue - Whether Commissioner is not competent to pass an order under section 33B of 1922 Act when an appeal against order of ITO has been decided by AAC - Held, yes FACTS The assessee - HUF was the sole selling agent of dyes and chemicals. Subsequently, the family agreed to transfer this business to a private limited company and the shareholders of this company were the members of the joint family. Under the agreement of sale the goodwill of the business was fixed at Rs. 50,000. The HUF computed its income at Rs. 3,51,506 which included a sum of Rs. 25,000 as representing the goodwill of the business which had been transferred to the private limited company. As the goodwill was transferred for Rs. 50,000, the ITO computed the balance of Rs. 25,000 as capital gains under section 12-B of 1922 Act. On appeal, the AAC upheld the order of the AAC. Thereafter the Commissioner purporting to act under section 33-B of 1922 Act computed the capital gains at Rs. 10,00,000. On appeal, the Tribunal held that the Commissioner had no jurisdiction to revise the order passed by the ITO. On reference : HELD The Commissioner has been given no right of appeal from an order of assessment passed by the ITO. The right of appeal is confined to the assessee ; and before section 33-B of 1922 Act was enacted the position in law was that if the assessee did not appeal from the order of the ITO, that order became final and conclusive. But if the assessee appealed from the order of the ITO, the widest jurisdiction was given to the AAC in appeal. He had the power to confirm, reduce, enhance or annul the assessment, he had the power to direct the ITO to make a fresh assessment, and the only limitation that was laid down on the exercise of his jurisdiction was that if he wanted to enhance the assessment, he must give the assessee a reasonable opportunity of showing cause against the enhancement. From the decision of the AAC the right was given both to the Commissioner and to the assessee to appeal to the Tribunal. section 33-A of 1922 Act…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492