Law: Income Tax Act, 1961

Section: 263

Income-tax--Revision---Assessments set aside by Commissioner under S.263 and I.T.O. directed to make fresh assessments---Order of revision by Commissioner set aside by Tribunal--- Order of Tribunal made subject-matter of reference before High Court and reference application pending---I. T. O. making fresh assessments in accordance with directions of Commissioner--­Consequence of setting aside order of Commissioner is that order passed in consequence thereof also fails---Consequential orders of I.T O. to give effect to order of Commissioner not valid---Indian Income Tax Act, 1961, S.263. For the assessment years 1975-76 and 1976-77, the Income-tax Officer completed the original assessments. Those assessments were set aside by the Commissioner under section 263 of the Income Tax Act, 1961, and the Income-tax Officer was directed to make fresh assessments. The order of the Commissioner under section 263 was set aside by the Tribunal. The order of the Tribunal setting aside the order of the Commissioner was made the subject-matter of reference before the High Court and the reference application was pending. The Income-tax Officer made fresh assessments in accordance with the directions contained in the order of the Commissioner which had been set aside. On appeal against the fresh assessment orders, the Commissioner of Income-tax (Appeals) set aside the assessment orders on the ground that the order of the Commissioner of Income-tax under section 263 had been cancelled. On further appeal, the Revenue contended that since the reference application was pending before the High Court, the order passed by the Income-tax Officer ought not to be set aside. The Tribunal dismissed the appeals filed by the Revenue. On a reference: Held, that once original assessments have come into force unless the same are set aside in accordance with law in appropriate proceedings, they hold the field and there cannot be two operative assessments at the same time. The effect of the order under section 263 made by the Commissioner of Income-tax was that the original assessments stood set aside. However, once an order under section 263 was set aide, it resulted in restoration of the original…

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