Taxpublishers.in - InterestingDecision/IDDTF_159.htm - Tax Publishers Your Tax Solution Hub

Share via Whatsapp 87 Views


Tax Publishers Revision under section 263 pending rectification request under section 154 *Facts:* PCIT reopened the case of the assessee citing certain lapses in the assessment process. Assessee's contention was that there was a rectification request pending before the AO under section 154 so the revision powers under section 263 cannot be invoked pending adjudication of rectification under section 154. On appeal - Held against the assessee that pendency of rectification petition does not debar invocation of section 263 proceedings. *Applied:* CIT v. Ralson Industries Ltd. (2007) 158 Taxman 160 (SC) : 2007 TaxPub(DT) 0875 (SC). "The Honble Supreme Court held that the scope and ambit of a proceeding for rectification of an order under section 154 and a proceeding for revision under section 263 are distinct and different. The order of rectification can be passed on certain contingencies. It does not confer a power of review. If an order of assessment is rectified by Assessing Officer in terms of section 154 of the Act, the same itself may be a subject-matter of a proceeding under section 263 of the Act. The power of revision under section 263 is exercised by a higher authority. It is a special provision. The revisional jurisdiction is vested in the Commissioner. An order thereunder can be passed if it is found that the order of assessment is prejudicial to the Revenue. In such a proceeding, he may not only pass an appropriate order in exercise of the said jurisdiction but in order to enable him to do it, he may make such inquiry as he deems necessary in this behalf. When an order is passed by a higher authority, the lower authority is bound thereby keeping in view the principles of judicial discipline. An order of assessment is subject to exercise of an order of a revisional jurisdiction under section 263 of the Act. Doctrine of Merger in such a case will have no application. The Honble Court further opined that initiation of a proceeding under section 263 of the Act cannot be held to have become bad in law only because an order of rectification was passed. No such hard and fast rule could be laid down, in this regard. Each case is required to be considered on its own facts. It would not be correct to contend that only because a proceeding for rectification was initiated subsequently, the revisional jurisdiction could not have been invoked under any circumstances whatsoever. If such a proceeding was initiated, in our opinion, the contesting parties could bring the same to the notice of the Commissioner so as to enable him to take into consideration the subsequent events also. It goes without saying that if and when the Commissioner of Income-tax takes up for consideration a subsequent event, the assessee would be entitled to make its submission also in regard thereto". *Case:* T. Rajarajeswari v. ACIT 2023 TaxPub(DT) 3222 (Chen-Trib)

Tax Publishers

Revision under section 263 pending rectification request under section 154

Facts:

PCIT reopened the case of the assessee citing certain lapses in the assessment process. Assessee's contention was that there was a rectification request pending before the AO under section 154 so the revision powers under section 263 cannot be invoked pending adjudication of rectification under section 154. On appeal -

Held against the assessee that pendency of rectification petition does not debar invocation of section 263 proceedings.

Applied:

CIT v. Ralson Industries Ltd. (2007) 158 Taxman 160 (SC) : 2007 TaxPub(DT) 0875 (SC).

"The Honble Supreme Court held that the scope and ambit of a proceeding for rectification of an order under section 154 and a proceeding for revision under section 263 are distinct and different. The order of rectification can be passed on certain contingencies. It does not confer a power of review. If an order of assessment is rectified by Assessing Officer in terms of section 154 of the Act, the same itself may be a subject-matter of a proceeding under section 263 of the Act. The power of revision under section 263 is exercised by a higher authority. It is a special provision. The revisional jurisdiction is vested in the Commissioner. An order thereunder can be passed if it is found that the order of assessment is prejudicial to the Revenue. In such a proceeding, he may not only pass an appropriate order in exercise of the said jurisdiction but in order to enable him to do it, he may make such inquiry as he deems necessary in this behalf. When an order is passed by a higher authority, the lower authority is bound thereby keeping in view the principles of judicial discipline. An order of assessment is subject to exercise of an order of a revisional jurisdiction under section 263 of the Act. Doctrine of Merger in such a case will have no application. The Honble Court further opined that initiation of a proceeding under section 263 of the Act cannot be held to have become bad in law only because an order of rectification was passed.

No such hard and fast rule could be laid down, in this regard. Each case is required to be considered on its own facts. It would not be correct to contend that only because a proceeding for rectification was initiated subsequently, the revisional jurisdiction could not have been invoked under any circumstances whatsoever. If such a proceeding was initiated, in our opinion, the contesting parties could bring the same to the notice of the Commissioner so as to enable him to take into consideration the subsequent events also. It goes without saying that if and when the Commissioner of Income-tax takes up for consideration a subsequent event, the assessee would be entitled to make its submission also in regard thereto".

Case: T. Rajarajeswari v. ACIT 2023 TaxPub(DT) 3222 (Chen-Trib)