2014 (8) TMI 642 - KARNATAKA HIGH COURT

Assessment u/s 153A – Invocation of power of revision u/s 263 - Whether the CIT can invoke the power u/s 263 of the Act to review the order of assessment passed by the Assessing Authority – Held that:- In the eye of law there is no order of assessment. Re-opened means to deal with or begin with again. It means the Assessing Officer shall assess or reassess the total income of six assessment years. Once the assessment is reopened, the assessing authority can take note of the income disclosed in the earlier return, any undisclosed income found during search or and also any other income which is not disclosed in the earlier return or which is not unearthed during the search, in order to find out what is the “total income” of each year and then pass the assessment order. Therefore, the Commissioner by virtue of the power conferred under Section 263 of the Act gets no jurisdiction to initiate proceedings under the said provision because the condition precedent for initiating proceedings under Section 263 is any order passed under the Act by the Assessing officer is erroneous insofar as it is prejudicial to the interest of the revenue. Once the order passed by the Assessing officer gets reopened, there is no order which can be said to be erroneous insofar as it is prejudicial to the interest of the revenue which confers jurisdiction on the Commissioner to exercise the power of the jurisdiction.

If the commissioner has come across any income that the assessing authority has not taken note of while passing the earlier order, the material can be furnished to the assessing authority and the assessing authority shall take note of the said income also in determining the total income of the assessee when the earlier proceedings are reopened and that income also shall become the subject matter of proceedings - the reasoning given by the Tribunal is not justified - The Commissioner did not have jurisdiction to initiate any proceedings u/s 263 of the Act – Decision in the case of COMMISSIONER OF INCOME TAX vs. ANIL KUMAR BHATIA [2012 (8) TMI 368 - DELHI HIGH COURT] relied upon - Decided in favour of Assessee.