Law: Income Tax Act, 1961

Section: 263,263(1)

Income-tax--Revision---Appeal---Merger of assessment order in appellate order---No evidence that particular issue had not been considered by Appellate Authority---Order of revision with regard to such an issue was not valid--­Indian Income Tax Act, 1961, S.263. Held, that, in the present case, it was not clear from the statement of the case as to whether the subject-matter in appeal before the appellate authority was other than what had been considered by the Commission while exercising his revisional powers under section 263(1) of the Income Tax Act, 1961. It was for the Revenue to have contended before the Tribunal and brought on record the fact that the subject-matter for consideration before the Commissioner in exercise of jurisdiction under section 263(1) was other than what had been considered by the Commissioner (Appeals) while deciding the appeal. The order of revision was not valid. CIT v. Shri Arbuda Mills Ltd. (1988) 231 ITR 50 (SC) and CIT (Addl.) v. Vijayalakshmi Lorry Service (1986) 157 ITR 327 (Kar.) ref. JUDGMENT ASHOK BHAN, J. ---At the instance of the Revenue, the Income-tax Appellate Tribunal; Bangalore, has referred the following question of law to this Court for its opinion: "Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in cancelling 'the order of the Commissioner passed under section 263 of the -Income-tax Act, on the ground that the Commissioner had no jurisdiction to invoke the provisions of section 263 when the Commissioner (Appeals) had already passed an order in an appeal for the assessment year 1983-84 and the order sought to be revised by the Commissioner had already merged in the said order of the Commissioner (Appeals)?" The question referred to us stands concluded by a Division Bench judgment of this Court in Addl. CIT v. Vijayalakshmi Lorry Service (1986) 157 ITR 327. Therefore, the question referred is answered in the affirmative, i.e., in favour of the assessee and against the Revenue. Counsel for the Revenue brought to our notice Explanation (c) added to section 263(1) of the Income Tax Act, 1961, with effect from June 1, 1988, to contend that the Commissioner would have the…

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