Law: Income Tax Act, 1961

Section: 263

Income-tax--Revision---Commissioner---Scope of powers---Clause (c) of Explanation to S.263 inserted w.e.f. 1-6-1988---Effect---Powers extend to matters not considered and decided by Commissioner (Appeals)---Even in respect of periods prior to 1-6-1988---Indian Income Tax Act, 1961, S.263, Expln. (c). Clause (c) of the Explanation to section 263 of the Income Tax Act, 1961, inserted with effect from June 1, 1988, leaves no doubt that the power of the Commissioner under section 263 shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in appeal before the Commissioner of Income-tax (Appeals) or the Appellate Assistant Commissioner. Where, in an appeal relating to the assessment year 1982-83, neither in the grounds of appeal before the Commissioner of Income-tax (Appeals) nor in the matters considered by the Commissioner (Appeals), the issues regarding service charges and vehicles hire charges amounting to Rs.6,65,162 and Rs.18,900 figured, and the Commissioner of Income-tax (Appeals) had not considered those issues: ' Held, that since the matter was not before the Commissioner of Income-tax (Appeals) nor was there any decision on the issue by the Commissioner (Appeals), the Commissioner of Income-tax was justified in invoking the provision of section 263 of the Act to revise the order of the Income-tax Officer on these issues. CIT v. Shri Arbuda Mills Ltd. (1998) 231 ITR 50 (SC) fol. General Beopar Co.,(Pvt.) (1987) 167 ITR 86 (Cal.) ref. THIS JUDGMENT DELIVERED BY: By this reference application, the following questions are referred for the opinion of this Court: "(1) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in holding that the provisions of section 263 of the Income Tax Act, 1961, as amended by the Finance Act, 1988, would not be available to the Commissioner of Income-tax in this case? (2) Whether, on the facts and in the circumstances of the case, the Tribunal was correct in law in cancelling the order of the Commissioner of Income-tax under section 263 of the Income Tax Act, 1961?" The assessee is a limited company. It has filed a return 'on December…

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