Law:

Section:

Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interests of revenue - Assessment years 1989-90 to 1999-2000 - Whether initiation of power under section 263 is an act of a quasi-judicial authority and based on formation of an opinion with regard to existence of adequate material to satisfy that decision taken by Assessing Officer is erroneous as well as prejudicial to interests of revenue - Held, yes - Pursuant to a search conducted at office and residential premises of assessee, besides books of account, certain other documents were found and seized by authorities - Subsequently assessee filed return in response to notice under section 158BC - Assessing Officer determined total undisclosed income - After such determination, Commissioner passed an order under section 263 and cancelled order of Assessing Officer - On appeal, Tribunal set aside order of Commissioner and held that Commissioner had not recorded any specific defect and proceeded in vague manner that assessment was made in a hurry, to save period of limitation, without examination of seized documents and without application of mind - Whether, on facts, Tribunal correctly set aside order of Commissioner - Held, yes FACTS The assessee-company was deriving income from the manufacture and sale of bread and allied products. The office and residential premises of the assessee and its directors were searched under section 132 and a survey under section 133A in the factory was taken. Besides the books of account and certain other documents were found and seized during the proceedings. A notice under section 158BC was issued and served upon the assessee. The assessee filed a block return for the relevant block period for the assessment years 1989-90 to 1999-2000 declaring a total undisclosed income at Rs. 1,23,150 in response to the notice issued under sections 142(1) and 143(1). The Assessing Officer, however, determined the total undisclosed income at Rs. 13,93,369 and, accordingly, issued demand notice and challan. Thereafter, an order was passed under section 154 and the total undisclosed income was determined at Rs. 15,93,369. After such determination, the Commissioner…

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