Law:

Section:

Section 263 of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interests of revenue - Assessment years 1979-80 to 1983-84 - Whether powers of revision can be exercised only by Commissioner and, therefore, Assessing Officer cannot, under guise of framing fresh assessment, exercise said powers in relation to other items forming part of assessment record - Held,yes - Whether therefore, Assessing Officer while passing fresh assessment order in pursuance of an order of Commissioner under section 263, isentitled to consider only such items which had been considered by Commissioner, and he cannot consider any other item afresh for making additions - Held, yes FACTS The assessee was carrying on the proprietary business of exhibition of 16 mm films on non-commercial basis and also business of manufacturing and sale of the projector spare parts. He filed return of income for the assessment years 1979-80 to 1983-84. The Assessing Officer completed the assessment of the assessee. Thereafter, the Commissioner issued a show-cause notice under section 263 on the ground that the total investment in the films including cost of extra prints was not considered properly by the Assessing Officer and that the write off of the cost of the films was wrongly allowed in the assessments. After hearing the assessee, the Commissioner passed an order under section 263 setting aside the assessment order with a direction to the Assessing Officer to look into the above-mentioned aspects and to redo the assessments as per law. The Assessing Officer framed fresh assessment and made additions and disallowances beyond the aforesaid two issues which were taken up in revisional proceedings by the Commissioner. On appeal, the Commissioner (Appeals) confirmed the assessment orders. On second appeal, the Tribunal held that in the fresh assessment order passed in pursuance of the order of the Commissioner under section 263, the ITO was entitled to consider only those two issues which were considered by the Commissioner and was not entitled to consider afresh any other item for making addition. HELD A bare perusal of the provision of section 263 makes it clear that, before the Commissioner…

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