INCOME TAX ACT, 1961

--Revision under section 263--Erroneous and prejudicial orderNon-application of mind by AO vis-a-vis non-speaking order--The assessee, an Indian Limited Company, while filing its returns for the assessment years 1995-96 and 1996-97 had claimed certain deductions towards its tax liability, the amounts as had been deducted by way of TDS in respect of payments received by its business activities in Canada and Thailand as under : DTA relief in Respect of Canada & Thailand as claimed for the year 1995-96, 18,12,897 DTA relief in Respect of Canada & Thailand as claimed for the year 1996-97 48,59,285 The assessing authority had indicated that, deductions on such amounts were in terms of double taxation agreement relief in existence between our country and the countries of Canada and Thailand and it had been allowed as claimed by the assessee. The CIT being of the view that these two orders were erroneous and prejudicial to the interest of the revenue exercised his powers under section 263 and in terms of his common order set aside the two assessment orders and remanded the matter to the assessing authority particularly, insofar as allowing of such deductions under the DTAAs with Canada and Thailand by verification and computation of the tax liability of the income abroad and under the income tax enactments of the two countries and to ascertain the exact relief that the assessee can claim Article 23(2) of the DTAA with Canada and Article 23(3) of the DTAA with Thailand. The assessee being aggrieved with the Revisional Order passed by the Commissioner, preferred appeals to theTribunal. The Tribunal set aside the revisional orders of the Commissioner and restored the assessment order as had been passed by the assessing authority, as per its common order. The Tribunal while setting aside the order of the Commissioner opined that there was no need or scope for interference by the Commissioner, in exercise of the revisional jurisdiction to do the same and therefore, allowed the appeals. Held: There cannot be any dichotomy of this nature as every conclusion and finding by the assessing authority should be supported by reasons, however brief it may be, and in a situation where it is only a question of computation in accordance with relevant articles of a double taxation avoidance agreements and that should be clearly indicated in the order of the assessing authority, whether or not the assessee had given particulars or details of it. It is the duty of the assessing authority to do that and if the assessing authority had failed in that, more so in extending a tax relief to the assessee, the order definitely constitutes an order not merely erroneous but also prejudicial to the interest of the 'revenue and therefore while the Commissioner was justified in exercising the jurisdiction under section 263 of the Act, the Tribunal was definitely not justified in interfering with this order of the Commissioner in its appellate jurisdiction.