TMI Blog2005 (10) TMI 35X X X X Extracts X X X X X X X X Extracts X X X X ..... d Bench "B", has referred the following questions under section 256(1) of the Income-tax Act, 1961 ("the Act"), both at the instance of the Revenue and the assessee. "(1) On Department's request for each of the assessment years 1979-80 to 1983-84: Whether, on the facts and circumstances of the case, the Tribunal was right in law in holding that in the fresh assessment order passed in pursuance of an order of the learned Commissioner under section 263 of the Income-tax Act, 1961, the Income-tax Officer was entitled to consider only those two items which were considered by the learned Commissioner and was not entitled to consider afresh any other item for making addition? (2) On assessee's request for the assessment year 1983-84: Whether, on the facts and in the circumstances of the case, the Tribunal was right in law in holding that the assessee was not entitled for deduction of the entire cost of films in the year of payment?" The assessment years are 1979-80 to 1983-84 and the relevant accounting periods are Samvat years 2034 to 2038. The assessee, an individual carries on proprietary business of exhibition of 16 m.m. films on non-commercial basis in the name and style o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ruary 19, 1987, had envisaged only two points for further processing by the Assessing Officer, the Assessing Officer could not have considered other aspects for the first time in the fresh assessments dated March 30, 1988, which were consequential to revisional proceedings. The Tribunal vide its order dated September 17, 1992, upheld the preliminary objection. It is recorded by the Tribunal that the reliance on behalf of the Revenue on the operative portion appearing in paragraph No. 7 of the order of the Commissioner of Income-tax, was misplaced and the said observations/directions should not be read out of context. That when the notice and the order under section 263 of the Act are read as a whole, they clearly envisaged only two points and, therefore, a specific mention in the operative part of the order directing the Assessing Officer to look into the abovementioned aspects and to redo the assessments keeping in view the direction given, made it clear that, in effect, the assessments were not set aside in entirety. The Tribunal, therefore, held that the Assessing Officer travelled beyond his jurisdiction while framing the fresh assessments as he had acquired jurisdiction to loo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ity of being heard and thereafter record, at least prima facie, that the order made by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The requirement of giving the assessee an opportunity of hearing is for the" simple reason that the assessee may be able to refute the belief of the Commissioner of Income-tax, which might have been formed on examination of the record of any proceeding under the Act, that is to say, the assessee may be in a position to point out that the assessment order is neither erroneous nor prejudicial to the interests of the Revenue, or even if it is erroneous, it is not prejudicial to the interests of the Revenue, or it may not be erroneous, even if it is prejudicial to the interests of the Revenue. Therefore, the moment the Revenue's contention is accepted that in the fresh assessment, the Assessing Officer is entitled to examine items which did not form part of section 263 proceedings, the statutory requirement of framing an order under section 263 of the Act after giving the assessee an opportunity of being heard, stands obliterated or is made redundant. This interpretation goes against the clear unambiguo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct in the first instance requires the Commissioner of Income-tax to call for and examine the record of any proceeding under the Act. The logical presumption is, therefore, that before issuance of show-cause notice under section 263 of the Act, the Commissioner of Income-tax has examined the record, and found prima facie that the assessment order is erroneous and prejudicial to the interests of the Revenue only in relation to the items mentioned in the show-cause notice. For the Assessing Officer to substitute his opinion in place of the opinion of the Commissioner of Income-tax is not envisaged by the provision and therefore also, the action of the Assessing Officer in expanding scope of consequential assessments cannot be upheld. The scheme of the Act has provided different powers to different authorities and these are required to be exercised after satisfying the prerequisite conditions and jurisdictional facts. The Assessing Officer can disturb/reopen a finalised assessment by invoking his powers either under section 154 or under section 147 of the Act, provided he can show that the necessary requirements are fulfilled. If, what the Revenue contends today is accepted, these an ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
