COMMISSIONER OF INCOME TAX vs. SONAL GUM INDUSTRIES

ITR/60/1986HC GujaratGJHC24010684198627 August 2001Author: HONOURABLE MR. JUSTICE MOHIT S. SHAH,HONOURABLE MR. JUSTICE D.A.MEHTA2 pages
AI SummaryRemanded

What did the High Court hold?

The Gujarat High Court held that the question referred to them was squarely concluded by the decision of the Andhra Pradesh High Court in CIT vs. East Coast Marine Products (P) Ltd. (181 ITR 314). The Andhra Pradesh High Court had ruled that an assessment order passed by an Income-tax Officer under the directions of the Inspecting Assistant Commissioner under Section 144B is still an order made by the Income-tax Officer, and therefore, the Commissioner can revise it under Section 263. Consequently, the Gujarat High Court answered the reference in the negative, in favour of the revenue and against the assessee. The Tribunal was directed to proceed with the hearing of the appeal in light of this opinion. The reference was disposed of with no order as to costs.

What were the facts?

This case involves an Income Tax Reference filed by the revenue (Commissioner of Income Tax) against the assessee, Sonal Gum Industries, for the assessment year 1979-80. The reference arises from a decision of the Income Tax Appellate Tribunal (ITAT) dated September 16, 1985, in ITA No. 2443/Ahd/84. The ITAT had set aside an order passed by the Commissioner of Income-tax under Section 263 of the Income-tax Act, 1961. The ITAT's decision was based on a Special Bench ruling which held that the Commissioner could not invoke Section 263 when the assessment was framed under Section 143(3) read with Section 144B, as such orders were passed under the directions of the Inspecting Assistant Commissioner.

What were the issues?

1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in setting aside the order of the Commissioner of Income-tax made u/s. 263 of the Income-tax Act, 1961? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. However, the Tribunal's decision, which was set aside by the High Court, was based on the principle that the Commissioner cannot take action under Section 263 when the assessment is framed under Section 143(3) read with Section 144B, as the assessment order was passed under the directions of the Inspecting Assistant Commissioner. Revenue's Contention: The revenue, through its learned Standing Counsel, relied on the decision of the Andhra Pradesh High Court in CIT vs. East Coast Marine Products (P) Ltd., 181 ITR 314. This decision held that even if an Income-tax Officer passes an order after receiving directions from the Inspecting Assistant Commissioner under Section 144B, it is still an order made by the Income-tax Officer and the Commissioner can revise it under Section 263.

Which sections of the Income-tax Act were involved?

Section 263,Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD

INCOME TAX REFERENCE No 60 of 1986

For Approval and Signature:

Hon'ble MR.JUSTICE M.S.SHAH and Hon'ble MR.JUSTICE D.A.MEHTA

============================================================ 1. Whether Reporters of Local Papers may be allowed : NO to see the judgements?

2.

To be referred to the Reporter or not? : NO 3. Whether Their Lordships wish to see the fair copy : NO of the judgement?

4.

Whether this case involves a substantial question : NO of law as to the interpretation of the Constitution of India, 1950 of any Order made thereunder?

5.

Whether it is to be circulated to the Civil Judge? : NO ----------------------------------------------

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 263

All 13,616 judgments and leading authorities on Section 263 →

Recent GST High Court judgments

Search GST case law →