CIT, PATIALA V. M/S GANESH STEEL INDS.

ITR/254/1995

AI Insights

The case revolves around the legal question of whether an assessment order, which has been appealed against, can be subjected to revision under Section 263 of the Income Tax Act, 1961. The assessee, M/s. Ganesh Steel Indus., had claimed an investment allowance for a weigh bridge under Section 32-A, which was initially allowed by the assessing officer. However, the Commissioner of Income Tax later set aside this order and directed a re-examination of the claim. The Tribunal's decision to cancel the Commissioner's order was based on the belief that the assessment order could not be revisited post-appeal. The High Court, referencing a retrospective amendment and relevant Supreme Court and Bombay High Court judgments, overturned the Tribunal's decision, affirming the Commissioner's authority under Section 263.

• Counselvise Citation: [2009] 140 COUNSELVISE.COM (IT) 689649 (HC-CHANDIGARH)
• Appeal Type: Others
• Pronouncement Date: 08-07-2009
• Assessment Year: misc
• Other Referred Cases: Commissioner of Income Tax Vs. Shri Arbuda Mills Ltd., Commissioner of Income Tax Vs. Ratilal Bacharilal and sons
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: PANKAJ JAIN
• Assessee Lawyers: RAJESH KATOCH
• Keywords: Assessment Order; Investment allowance; Revision Jurisdiction; Weight Bridge
• Section: 263; 32(A)

Judgement Text

"I.T.R. No. 254 of 1995 (1) IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH I.T.R. No. 254 of 1995 DATE OF DECISION: 8.7.2009 The Commissioner of Income Tax, Patiala ..........Applicant Versus M/s. Ganesh Steel Indus., Mandi Gobindgarh ..........Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MRS. JUSTICE DAYA CHAUDHARY Present:- Mr. Rajesh Katoch, Advocate for the applicant. Mr. Pankaj Jain, Advocate for the respondent. **** ADARSH KUMAR GOEL, J. (Oral) 1. The Income Tax Appellate Tribunal, Chandigarh Bench, Chandigarh has referred following question of law for opinion of this Court, arising out of its order dated 8.1.1992 in ITA No. 142/Chandi/87, for the assessment year 1982-83:- “Whether, on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in cancelling the order passed under Section 263 of the Income Tax Act by the Commissioner of Income Tax?” 2. The assessee is running a rolling mill and claimed investment allowance in respect of weight bridge under Section 32-A of the Income Tax Act, 1961 (in short, 'the Act'), which was allowed by the assessing authority. Against the order of assessment, appeal of the assessee was I.T.R. No. 254 of 1995 (2) decided. Thereafter, the Commissioner of Income Tax invoked his jurisdiction under Section 263 of the Act and set aside the assessment order and directed the Assessing Officer to re-examine the claim of the assessee and give reasons for the allowance. Appeal of the assessee was, however, allowed by the Tribunal following its earlier order in the case of Yash Pal Garg & Company (P) Limited, ITA No. 724/Chandi/87, for assessment year 1982-83 dated 7.1.1992, annexed as Annexure 'C' to the statement of the case, without examining the objection of the revenue that investment allowance was not admissible on the weigh bridge, in view of Clause (b) of sub Section 2 of Section 32-A of the Act, as the weigh bridge was not machinery or plant used in manufacture or production of an article or thing nor it is used for the purpose of business of generation or production of electricity. 3. The Tribunal held that once order of assessment had been appealed against, the same could not have been thereafter subjected to revision under Section 263 of the Act. 4. We have heard learned counsel for the parties. 5. Learned counsel for the revenue submits that there were earlier two views on the subject and in the clarificatory amendment in the year 1989, it was provided that power under Section 263 of the Act could be exercised even if an order of assessment had been subject matter of appeal. The amendment was, on its terms, retrospective and covers every appeal, which may have been filed on or before or after 1.6.1988 and, thus, the present case was covered by the said amendment. This amendment was not noticed by the Tribunal. He also relies upon the judgment of Hon'ble the Supreme Court in Commissioner of Income Tax Vs. Shri Arbuda Mills Ltd. (1998) 231 ITR 50 and judgment of Bombay High Court in Commissioner of Income Tax Vs. Ratilal Bacharilal and sons (2006) 282 ITR 457 (Bom), taking the same view. I.T.R. No. 254 of 1995 (3) 6. This position could not be disputed by learned counsel for the revenue. 7. In view of above, the question referred is answered in favour of the revenue and against the assessee. The order of the Tribunal cancelling the order of CIT under Section 263 of the Act, on the ground that since the order of assessing authority had been subject matter of appeal, the same could not be subject matter in revision under Section 263 of the Act, is held to be erroneous. 8. Reference is disposed of accordingly. (ADARSH KUMAR GOEL) JUDGE July 08, 2009 (DAYA CHAUDHARY) pooja JUDGE Note:-Whether this case is to be referred to the Reporter .......Yes/No "