Law: Income Tax Act, 1961

Section: 154,263

JUDGMENT S.B. Sinha, J.- Leave granted. 2. Interpretation of the provisions of section 154 vis-a-vis 263 of the Income-tax Act calls for consideration in this Appeal which arises out of a judgment and Order dated 15th December, 2003 passed by the High Court of Madhya Pradesh at Jabalpur in ITR No.19/1999. The fact of the matter is not much in dispute. The respondent is an assessee under the Income-tax Act. It filed its return for the assessment year 1992-93 declaring its income at Rs. 26,66,355. The order of assessment was completed on or about 10-3-1995 under section 143(3) of the Act opining that the assessable income as against the assessee was Rs. 35,40,414. The Commissioner of Income-tax invoked its jurisdiction under section 263 of the Act by setting aside the order of assessment excluding certain amounts towards transport receipts to the extent of a sum of Rs. 27,62,982 and interest amounting to Rs. 1,41,878 from the assessee's total income in the light of the provisions of section 80HHC and section 80-I of the Act. The Assessing Officer was directed to make a fresh order of assessment. 3. Appeal was preferred thereagainst by the assessee before the Income-tax Appellate Tribunal. It was, inter alia, contended that after the order of assessment under section 143(3) of the Act was passed, a Notice of Rectification of the Order of Assessment under section 154 thereof having been issued by the Assessing Officer on 26-10-1995, wherein no modification/amendment was made in regard to the purported exclusion of income under sections 80HH and 80-I of the Act on account of non-inclusion of transport receipts and interest on the total income and, thus, the Commissioner of Income-tax has no authority to initiate any proceedings under section 263 thereof or otherwise. 4. The said contention of the assessee was upheld by the Tribunal, inter alia, relying on or on the basis of a decision of the Madhya Pradesh High Court in CIT v. Vippy Solvex Products (P.) Ltd. [1997] 228 ITR 587 . The Tribunal was furthermore of the opinion that the order passed under section 154 of the Act having been made upon due consideration of the explanation of the assessee for the proposed…

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