High Court Of Gujarat
CIT vs. Vikrant Crimpers
Section 263
Asst. Year 1986-87
D.A. Mehta & Ms. H.N. Devani, JJ.
IT Ref. No. 91 of 1995
9th January, 2006
Counsel Appeared
Tanvish U. Bhatt, for the Applicant : None, for the Respondent
JUDGMENT
MS. H.N. Devani, J. :
The Tribunal, Ahmedabad Bench “B”, has referred the following question under s. 256(1) of the IT Act, 1961 (the Act), at the instance of the CIT : “Whether, in the facts and circumstances of the case, the Tribunal was right in holding that CIT, Surat, was not justified to pass the order under s. 263 of IT Act, 1961, in the case of assessee relating to asst. yr. 1986-87 ?”
The assessment year is 1986-87. Heard Mr. T.U. Bhatt, the learned standing counsel for the applicant-Revenue. Though served, there is no appearance on behalf of the respondent-assessee.
The facts stated briefly are that the AO had made assessment under s. 143(1) of the Act on 8th March, 1988. The CIT, being of the view that the said order was erroneous and prejudicial to the interests of the Revenue, initiated proceedings under s. 263 of the Act. Vide order dt. 26th March, 1990, the CIT held that the assessment order was erroneous and prejudicial to the interests of Revenue, and inter alia, directed the AO to add amount of sales-tax benefit of Rs. 2,32,961 to the total income.
The assessee carried the matter in appeal before the Tribunal. The Tribunal vide its order dt. 8th June, 1992 held that the order of CIT under s. 263 of the Act was without jurisdiction, and allowed the appeal.
As can be seen from the order of the Tribunal, the Tribunal has found, as a matter of fact, that the assessment order was framed under s. 143(1) of the Act. That the CBDT had vide its Circular No. RA/86-87/DIT, dt. 26th Aug., 1987, directed that no remedial action is necessary in summary cases. The Tribunal held that, admittedly, the assessee’s case for asst. yr. 1986-87 was in the nature of summary assessment, and that, therefore, in view of the directions of the CBDT, the CIT could not have exercised revisional powers under s. 263 of the Act. Nothing has been pointed out to dislodge the aforesaid findings of the Tribunal.
The CIT, being bound by the directions of the CBDT, could not have exercised powers under s. 263 of the Act in the present case when the assessment in question was in the nature of a summary assessment.
The Tribunal was justified in holding that the CIT, Surat, was not justified in passing the order under s. 263 of the Act in the case of the assessee in relation to asst. yr. 1986-87. Considering the fact that the Court has taken the view that the exercise of powers under s. 263 of the Act was without jurisdiction, it is not necessary to enter into the merits of the controversy. The question is accordingly answered in the affirmative, i.e., in favour of the assessee and against the Revenue.
The reference stands disposed of accordingly. There shall be no order as to costs.
[Citation : 282 ITR 503]
