TMI Blog1995 (12) TMI 14X X X X Extracts X X X X X X X X Extracts X X X X ..... ppeal will lie against the order of the Income-tax Officer with regard to matters already decided by the Commissioner in exercise of his powers under section 263 of the Income-tax Act, 1961 ? " The controversy pertains to the assessment year 1972-73, the relevant previous year being the year ended on December 31, 1971. The original assessment of the assessee was completed by the Income-tax Officer on November 30, 1974. In the said assessment, the Income-tax Officer while computing the capital employed for the purposes of working out relief under section 80J of the Act took into consideration Rs. 2,70,023, being the value of capital work-in-progress. He also did not reduce the written down value of the assets entitled to depreciation by the amount of extra shift allowance allowed in the past. The Commissioner of Income-tax called for the records of the said assessment and on examination thereof, was satisfied that the order of assessment passed by the Income-tax Officer was erroneous and prejudicial to the interests of the Revenue. He, therefore, initiated proceedings under section 263 of the Income-tax Act, 1961 ("the Act"), and after giving the assessee an opportunity of being ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sue afresh. It was held that the Income-tax Officer was fully justified in doing so and no fault can be found in his action. The impugned order of the Income-tax Officer is in fact and reality an order giving effect to the revisional order of the Commissioner. No fresh determination of any issue has been done by him therein except recalculating the amount of relief under section 80J of the Act in the light of the directions of the Commissioner. No fault can be found with such order of the Income-tax Officer. The Commissioner of Income-tax (Appeals) held that no appeal was maintainable from such order of the Income-tax Officer giving effect to the revisional order of the Commissioner of Income-tax. The assessee went in further appeal to the Income-tax Appellate Tribunal ("the Tribunal") against the above order of the Commissioner of Income-tax (Appeals). The Tribunal heard the assessee and its counsel, and on careful consideration of the same, summed up the legal position in regard to the maintainability of appeal against such orders in the following words : " While an appeal will be maintainable from the fresh order passed by the Income-tax Officer, only matters which had not bec ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... submits that in the instant case, the Commissioner in his revisional order under section 263 has given no finding of his own in regard to the claim of the assessee about the inclusion of the value of work-in-progress in the capital employed for the purpose of relief under section 80J and in that view of the matter, it was open to the Income-tax Officer to examine this controversy which he failed to do. In such a situation, according to learned counsel, appeal is maintainable against the above order of the Income-tax Officer and the Commissioner (Appeals) was not justified in law in rejecting the same. According to learned counsel, the Commissioner has opined that the order of the Income-tax Officer was erroneous and prejudicial to the interests of the Revenue only for the purpose of assuming jurisdiction under section 263 of the Act and has not recorded any finding in regard to the question of includibility of the value of work-in-progress for computation of "capital employed" and the controversy regarding deductibility of extra shift allowance from the written down value of an asset for computing depreciation in the succeeding year. Counsel submits that these questions were left o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmission of the assessee was regarding the reduction of the written down value of the assets by the amount of extra shift allowance made in the earlier years. The Income-tax Officer had made the allowance for extra shifts without the same being claimed. The Appellate Assistant Commissioner had held that the allowance should not be thrust upon the assessee. The assessee's representative thus contended that the written down value could not be reduced by the amount of such allowance till the issue is finalised. I find that the Income-tax Officer had allowed extra shift allowance in the earlier years and had also reduced the opening written down value of the assets by such allowance made in the past for the purpose of depreciation. He had, however, failed to consider such reduction for the written down value for the purpose of computing the capital employed under rule 19A of the Income-tax Rules. Since the assets had actually been subjected to extra shift as per the particulars furnished by the assessee itself, the Income-tax Officer in the earlier assessments was justified in allowing extra shift allowance. The Income-tax Officer, therefore, erred in the course of 1972-73 assessment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act, obviously, subject to the findings contained in the order. In our view, reference to and reliance on the operative part of the order without regard to the text of the order and the findings recorded therein is wholly misplaced and improper. To understand the true purport of an order, it has to be read as a whole. The operative part of the order in this case has to be read and understood in the light of the controversy before the Commissioner and the questions decided by him. It cannot be read in isolation from the text of the order and the determination of the questions arising therein by the Commissioner. It is neither proper nor permissible to pick out any part of the order, and in the case of a remand order the operative part thereof and to read the same without regard to the questions decided therein to support the contention that all issues are left open for determination by the authorities below. The Tribunal, in this case, in our opinion, was right in holding that the revisional order, wherein a definite finding is recorded on both the points at issue, having become final on account of the failure of the assessee to pursue the statutory remedies provided in the A ..... X X X X Extracts X X X X X X X X Extracts X X X X
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