TMI Blog1991 (7) TMI 135X X X X Extracts X X X X X X X X Extracts X X X X ..... in so far as it was prejudicial to the interests of revenue on the ground that unpaid sales-tax of Rs. 2,99,520 had not been treated as trading receipts and disallowance. under section 43B not made. Second reason for initiating action under section 263 was that disallowance under section 37(2A) to 37(3D) of the Income-tax Act, 1961 had not been made on account, of sole selling commission. Assessee objected to the proposed action which did not find favour with the CIT. He accordingly set aside the assessment order made by the Assessing Officer and directed him to make fresh assessment in accordance with law after giving reasonable opportunity of being heard to the assessee. 2. Assessee is aggrieved. It was contended by Shri H.P. Aggarwal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in such appeal. According to the learned counsel prior to insertion of Explanation C to section 263 the issue as to whether the CIT was empowered to exercise powers under section 263 in case where the order of assessment had been the subject matter of appeal before any authority was debatable and divergent views had been taken. However, after the law has been amended according to the learned counsel, it has become clear that before the amendment, the power of the Commissioner under section 263 did not extend to such cases of assessment which had been subject matter of appeal before any authorities. The learned counsel explained that the powers of the Commissioner under section 263 in respect of such matters as had not been decided upon by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... umber of cases that the CIT has the power to intervene under section 263 in matters which have not been specifically considered and decided by the appellate authorities in appeals against the assessment orders. Shri Tandon accordingly urged to dismiss the appeal of the assessee. 5. We have given our careful consideration to the rival contentions. In a case where the Assessing Officer follows the decision of the Tribunal in respect of a particular view even if there is another view available taken by other benches of the Tribunal it cannot be said that the order passed by the Assessing Officer is erroneous and prejudicial to the interests of revenue. Recently Allahabad High Court in the case of K.N. Agrawal v. CIT [1991] 189 ITR 769 held ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ests of revenue, the law laid down in the above noted cases, in our view, will squarely apply as the retrospective amendment defining the word 'tax payable' under section 43B shall have to be taken into consideration for the purposes of such determination. If we taken into account section 43B and the retrospective insertion in regard to the definition of 'tax payable' we have to consider as to whether the Assessing Officer has rightly allowed the deduction in respect of unpaid sales-tax. Under section 43B deduction in respect of sales-tax was permissible in the year of payment. Assessee had not claimed any deduction in the profit and loss account but at the same time the amount of Rs. 2,99,520 had not been disclosed as a trading receipt. In ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... We may now consider the second issue raised on behalf of the assessee. Assessee's contention is that the CIT has no jurisdiction under section 263 in respect of orders which had become subject matter of appeal, even if the issues on which the order is sought to be revised h ad not been considered or agitated before the appellate authorities. Prior to insertion of Explanation C to section 263 one view is that there is total merger of the assessment order with the appellate order even if some of the issues had not been agitated before the appellate authorities. The other view is that the merger is to the extent of the issues considered by the appellate authority and that it would be open to the CIT to consider the other issues not having bee ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e taken in a case where the assessment order had been subject matter of appeal. 8. This decision of the Bombay High Court referred to above in the case of Ritz Ltd. has been relied upon by the learned counsel in support of the contention that the CIT could not invoke his jurisdiction under section 263 in respect of an order which had become the subject matter of an appeal. In our view, the decision of the Bombay High Court has two parts. The first part of the decision is that Explanation C to section 263(1) is applicable only in respect of actions taken from 1-6-1988. The second part of the decision is that there is total merger of the order in the appellate order and the Commissioner has no powers to exercise jurisdiction under section ..... X X X X Extracts X X X X X X X X Extracts X X X X
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