COMMISSIONER OF INCOME TAX V. SONAL GUM INDUSTRIES

ITR/60/1986

AI Insights

The case involves a reference by the Commissioner of Income-tax to the High Court of Gujarat concerning the powers of the Commissioner under Section 263 of the Income-tax Act, 1961. The reference arose from an assessment order for the year 1979-80, which was initially set aside by the Tribunal. The Tribunal's decision was based on a Special Bench order that restricted the Commissioner's powers in cases where the assessment was directed by the Inspecting Assistant Commissioner under Sections 143(3) and 144B. However, the revenue challenged this interpretation, leading to the High Court's examination of the issue, particularly in light of a conflicting decision from the Andhra Pradesh High Court.

• Counselvise Citation: [2001] 140 COUNSELVISE.COM (IT) 677573 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 27-08-2001
• Assessment Year: misc
• Other Referred Cases: CIT vs. East Coast Marine Products (P) Ltd., 181 ITR 314
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: DS
• Assessee Lawyers: B B NAIK; M R BHATT
• Keywords: Assessment Year 1979-80; Commissioner of Income Tax; Income Tax; Income tax appellate tribunal; Inspecting Assistant Commissioner; Section 263
• Section: 143(3); 263; 144B

Judgement Text

" IN THE HIGH COURT OF GUJARAT AT AHMEDABAD INCOME TAX REFERENCE No 60 of 1986 For Approval and Signature: Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA ============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements? 2. To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement? 4. Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder? 5. Whether it is to be circulated to the Civil Judge? : NO ------------------------------------------------------------- COMMISSIONER OF INCOME TAX Versus SONAL GUM INDUSTRIES -------------------------------------------------------------- Appearance: 1. INCOME TAX REFERENCE No. 60 of 1986 MR BB NAIK with MR MR BHATT for Petitioner No. 1 NOTICE SERVED BY DS for Respondent No. 1 -------------------------------------------------------------- CORAM : MR.JUSTICE M.S.SHAH and MR.JUSTICE D.A.MEHTA Date of decision: 27/08/2001 ORAL JUDGEMENT (Per : MR.JUSTICE M.S.SHAH) In this reference at the instance of the revenue, the following question is referred to us for our decision in respect of assessment year 1979-80, arising from the decision dated 16.9.1985 in ITA No. 2443/Ahd/84 :- \"Whether, on the facts and in the circumstances of the case, the Tribunal was justified in setting aside the order of the Commissioner of Income-tax made u/s. 263 of the Income-tax Act, 1961 ?\" 2. For arriving at the decision, the Tribunal relied on the order dated 16.3.1983 of the Special Bench of the Income Tax Appellate Tribunal in East Coast Marine Products P. Ltd. wherein it was held that the Commissioner of Income-tax cannot take action under Section 263 of the Act in a case where the assessment is framed under Section 143(3) read with Section 144B of the Act as the assessment order was passed under the directions of the Inspecting Assistant Commissioner. 3. At the hearing of this reference, Mr BB Naik, learned Standing Counsel for the revenue has invited our attention to the decision of the Andhra Pradesh High Court in CIT vs. East Coast Marine Products (P) Ltd., 181 ITR 314 wherein the Andhra Pradesh High Court held that where an Income-tax Officer passes an order after receiving directions from the Inspecting Assistant Commissioner under Section 144B of the Act, it is still an order made by him and the Commissioner can revise it. 4. Having heard the learned counsel for the revenue and upon perusal of the aforesaid judgment of the Andhra Pradesh High Court rendered by Hon'ble Mr Justice BP Jeevan Reddy (as His Lordship then was), we find that the question referred to us is squarely concluded by the aforesaid decision against the assessee. 5. We accordingly answer the question in the negative i.e. in favour of the revenue and against the assessee. The Tribunal shall proceed with the hearing of the appeal in light of the aforesaid opinion. The reference accordingly stands disposed of with no order as to costs. (M.S. Shah, J.) (D.A. Mehta, J.) sundar/- "