COMMISSIONER OF INCOME TAX vs. RAJENDRA DYEING & PRINTING MILLS LTD.

ITR/86/1986HC GujaratGJHC24010710198612 July 2001Author: HONOURABLE MR. JUSTICE ANIL R. DAVE,HONOURABLE MR. JUSTICE D.A.MEHTA2 pages
AI SummaryRemanded

What were the facts?

This case involves an Income Tax Reference No. 86 of 1986 before the High Court of Gujarat at Ahmedabad. The reference was made at the instance of the revenue, the Commissioner of Income Tax, by the Income Tax Appellate Tribunal, Ahmedabad Bench 'A', under Section 256(1) of the Income-tax Act, 1961. The assessee is Rajendra Dyeing & Printing Mills Ltd. The revenue was represented by learned advocate Shri B.B. Naik, while no one appeared for the assessee, which had been ordered to be wound up and the Official Liquidator was served. The dispute concerns the Commissioner of Income-tax's power under Section 263 when an assessment was framed under Section 143(3) read with Section 144B after referring the case to the Inspecting Assistant Commissioner (IAC).

What did the High Court hold?

The High Court held that it was open to the Commissioner of Income-tax to exercise his power under Section 263 of the Act when the Assessing Officer had framed the assessment under Section 143(3) read with Section 144B. The Court found that the Commissioner of Income-tax could have exercised his powers under Section 263 in such a scenario. The reasoning was based on the law laid down by the High Court in a similar case, I.T.R. No. 120/86, and the precedent set in Torson Products Ltd. v. CIT, 173 ITR 611. The ratio decidendi is that the procedural step of referring the case to the IAC under Section 144B does not preclude the Commissioner from exercising revisional powers under Section 263 if the assessment order is found to be erroneous and prejudicial to the revenue. The question referred to the Court was answered in the affirmative, in favour of the revenue and against the assessee. The reference was disposed of accordingly.

What were the issues?

1. Whether the Tribunal has erred in law in deciding that the Commissioner of Income-tax cannot exercise his power under Section 263 when the Income-tax Officer has framed the assessment under Section 143(3) read with Section 144B after referring the case to the IAC? Assessee's Contention: The judgment does not record any specific contentions made by the assessee. The fact that no one appeared for the assessee suggests they did not present arguments. Revenue's Contention: The revenue, through its counsel, seeks to have the question answered in its favour, implying that the Commissioner of Income-tax can indeed exercise powers under Section 263 in the given circumstances. The revenue relies on the law laid down by the High Court in a similar case (I.T.R. No. 120/86) and the decision in Torson Products Ltd. v. CIT, 173 ITR 611.

Which sections of the Income-tax Act were involved?

Section 256(1),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 86 of 1986

For Approval and Signature:

Hon'ble MR.JUSTICE A.R.DAVE 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.

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