2002 (12) TMI 13

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..... issioner in exercise of the powers under section 263 of the Income-tax Act, 1961, sought to revise the assessment orders by two identical but separate orders dated March 25, 1991. In each of the orders the Commissioner has merely stated that the Assessing Officer had erred while assessing the income of the assessee without setting out the reasons why the Commissioner was of the view that the Assessing Officer had been erroneous in following the decision in Dusad Industries' case [1986] 162 ITR 784 (MP). The assessee preferred an appeal to the Tribunal. The Tribunal found that the Commissioner had wrongly exercised his power under section 263 of the Income-tax Act on the ground that no reasons had been given by the Commissioner for his concl .....

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..... ellant has also submitted that the declaration of law by this court, in Sahney Steel's case [1997] 228 ITR 253 could be deemed to have been the law which was at all times operative. In any event, according to the appellant, the Revenue, at least as far as the State of Andhra Pradesh was concerned, had not accepted the principle as enunciated in Dusad Industries' case [1986] 162 ITR 784 (MP) and had challenged the decision of the Andhra Pradesh High Court rendered in 1985 in Sahney Steel's case [1985] 152 ITR 39. The issue was, therefore, according to the appellant, still open and the Commissioner could in the circumstances keep it alive by initiating proceedings under section 263 of the Act. Reliance has been placed on the decision of the M .....

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..... Act must be exercised on the basis of the material that was available to him when he exercised the power. At that time, there was no dispute that the issue whether the power subsidy should be treated as capital receipt had been concluded against the Revenue. The satisfaction of the Commissioner, therefore, was based on no material either legal or factual which would have given him the jurisdiction to take action under section 263 of the Income-tax Act. The decisions of the High Courts relied upon by learned counsel appearing for the appellant do not, in our view, assist the Revenue. The Madras High Court in CIT v. Seshasayee Paper Boards Ltd. [1996] 217 ITR 358 considered a situation where the Assessing Officer had relied upon a particula .....

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