TMI Blog1991 (10) TMI 36X X X X Extracts X X X X X X X X Extracts X X X X ..... formity with the directions given by the Inspecting Assistant Commissioner and thereby setting aside the order passed by the Commissioner of Income-tax under section 263 of the Income-tax Act, 1961 ?" The background facts are that the assessee was assessed for the assessment year 1973-74 for the accounting period ending on December 31, 1972, on September 18, 1979. The assessee had filed its return of income on September 20, 1973, showing that its taxable income was nil. Subsequently, the Commissioner of Income-tax, Orissa, was of the view that the order of assessment was prejudicial to the interests of the Revenue, and proceedings under section 263 of the Act were initiated. An objection was raised before the Commissioner that the order h ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ncome-tax Officer and, therefore, the Commissioner had the jurisdiction to set it aside under section 263. Learned counsel for the assessee, however, submits that, in essence, the order was passed by the Inspecting Assistant Commissioner and, therefore, the Commissioner had no jurisdiction to deal with the matter. Section 263(1), as it stood at the relevant time, empowered the Commissioner to call for and examine the records of any proceeding under the Act and pass such order if he considered that the order passed therein by the Income-tax Officer was erroneous in so far as it was prejudicial to the interests of the Revenue. The order was obligated to be passed after giving the assessee a reasonable opportunity of being heard, and after m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Laws (Amendment) Act, 1987. The Explanation to section 263(1) was added with effect from October 1, 1984, "for the removal of doubts". It was not inserted to provide anything new. It is clarificatory in nature. It did not confer or create a new jurisdiction. Its purpose was to remove a doubt about jurisdiction which existed. The scope of an Explanation to the main provision is very much limited and, at any rate, it does not take the place of substantive law The Explanation is to be read as intending to harmonise with and clear up any ambiguity in the main section. An Explanation to the section is inserted only by way of abundant caution. (Abdul Latif Khan v. Mt. Boadi Begum, AIR 1934 PC 188). An explanation added to a statutory pro visi ..... X X X X Extracts X X X X X X X X Extracts X X X X
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