TMI Blog2009 (10) TMI 327X X X X Extracts X X X X X X X X Extracts X X X X ..... mpleted on February 7, 1995. The assessee filed appeal against the assessment before the Commissioner of Income-tax (Appeals) set aside the assessment and remanded the case back to the assessing officer for the purpose of reconsidering the certain addition contested by the assessee in the appeal.. Held that- dismissing the appeal. The order of the Commissioner under section 263 issued on March 30, 2000 was within two years from the end of the financial year in which the revised assessment was issued that was on March 6, 1998. Therefore, the order of revision was within time. - 1223 of 2006 - - - Dated:- 30-10-2009 - C. N. RAMACHANDRAN NAIR and V. K. MOHANAN JJ. P. Balakrishnan for the appellant. P. K. R. Menon and Jose Joseph ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ditions contested by the assessee in appeal. It is thereafter that the Supreme Court pronounced the judgment in A. Sanyasi Rao's case [1996] 219 ITR 330 on February 13, 1996, holding that income from liquor business also should be computed in accordance with sections 28 to 43C like any other business income and the provisions of sections 44AC and 206 are only machinery provisions. Therefore, it was the duty of the Assessing Officer to have noticed the judgment of the Supreme Court and made assessment in respect of income from arrack business based on the profit and loss account filed by the assessee. However, while revising the assessment based on the orders in appeal, the Assessing Officer did not consider the decision of the Supre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 263 is with regard to computation of business income from arrack under section 44AC in the original assessment, which should have been made based on the profit and loss account filed by the assessee, which showed higher income from business than the income assessable under section 44AC. Even though appeal was filed against the original assessment completed on February 7, 1995, this was not the subject-matter of appeal and, there fore, it was open to the Commissioner to revise the original assessment on this issue within two years from the date of the original order which was not done in this case. According to counsel since the issue was not, subject-matter of appeal, the Commissioner should have revised the assessment even during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sub-section (2) of section 263 is up to two years from the end of the financial year in which revised order is passed. 4. Learned counsel for the appellant-assessee has relied on the decision of the Supreme Court in CIT v. Ala gendran Finance Ltd. [2007] 293 ITR 1, and contended that under Explanation (c) to section 263(1) there is no merger of the assessment pertaining to income from arrack business in the appellate order and so much so, the Commissioner was free to revise the original assessment under section 263 on this issue even during the pendency of the first appeal before the first appellate authority. We are unable to accept this contention for more than one reason. In the first place, assessment on computation of income fr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nue. Therefore, once the appeal is filed by the assessee on any ground, it was open to the Commissioner (Appeals) to consider whether the impugned assessment order is otherwise prejudicial to the interests of the Revenue and to order revision of assessment to make up for the omissions made or to rectify the mistakes or to bring to tax the income that has escaped assessment which in other words means that orders prejudicial to the interests of the Revenue should be ordered to be corrected by the first appellate authority as well. Therefore, there is nothing wrong in the Commissioner, exercising supervisory powers over the Assessing Officers, to wait for the orders in appeal and then to revise the assessment on matters which are not considere ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ainst which also powers under section 263 are available to the Commissioner. Admittedly, the impugned order of the Commissioner under section 263 issued on March 30, 2000, is within two years from the end of the financial year in which the revised assessment is issued, that is on March 6, 1998. Therefore, we confirm the order of the learned single judge holding that the proceedings impugned in the WPC is within time. However, we make it clear that if the Commissioner of Income-tax (Appeals) had not set aside the original assessment in appeal, limitation for revision under section 263 has to be worked out from the date of original assessment and in that event revisional order by the Commissioner would be time barred. In other words, limitati ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
