Law: Income Tax Act, 1922

Section: 34,34A

(a) Income-tax Act (XI of 1922)-- ---S. 34-A--Error envisaged by S. 34-A is an error of law. (b) Income-tax Act (XI of 1922)--S. 34-A--Powers of Inspecting Assistant Commissioner to revise Income-tax Officers order--Inspecting Assistant Commissioner is empowered only to revise Income-tax Officers order--Inspecting Assistant Commissioner is conferred jurisdiction only on the fulfilment of condition (i) that there should be an erroneous order which was bad in law and (ii) that the error should be prejudicial to the interests of Revenue and it was only on the fulfilment of those two primary conditions that provisions of S. 34-A were attracted and could be pressed into service by the I. A. C.--Commissioner of Income-tax having been prohibited from interfering with orders of A. A. C. , I. A. C., who was subordinate to the Commissioner could not be vested with higher powers so as to assume jurisdiction to revise order passed by the Appellate Assistant Commissioner or the Tribunal. P L D 1976 Lah. 547 ref. (c) Income-tax Act (XI of 1922)-- ---S. 34-A--C.B.R. Circular No. 48(5)-1 T P dated 15-4-1959- History and purpose of enactment of S. 34-A--Powers of I.A.C. under S. 34-A--Extent. Section 34-A of the Income-tax Act. 1922 was enacted by the Finance Ordinance, 1959 and became effective from 1st April, 1959. The main purpose of its insertion appears to be that the Department had no right of appeal against any orders passed by an Income-tax Officer. Similarly the Commissioner of Income-tax, under section 34-A of the Income-tax Act, could not pass any order prejudicial to the tax-payer. The Inspecting Assistant Commissioner, was, therefore, vested with a power of revising any order, which he thought erroneous and prejudicial to the interests of the revenue. The instructions of the C. B. R. itself reproduced in its Circular No. 48(5) I. T. P. dated the 15th April, 1959 wherein it has been clearly stated that the new provisions of law empowered the Inspecting Assistant Commissioner to review the order of the Income-tax Officer. The powers are admittedly very wide and in a way it may be said to vest in the I. A. C. even the appellate powers of the A. A. C. But at this…

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