Commissioner of Income Tax vs Dhampur Sugar Mills Ltd.

At the instance of the Revenue, the Income Tax Appellate Tribunal referred the following question to this court for its opinion :

" Whether, on the facts and in the circumstances of the case, the Commissioner of Income Tax had no jurisdiction to revise the order of the Income Tax Officer u/s 263(1) of the Income Tax Act, 1961 ?"

Without going into the merits of the case, the Income Tax Appellate Tribunal found that appeal has been decided by the appellate authority, the order of the Income Tax Officer stood merged in the order of the appellate authority, and, therefore, the Commissioner of Income Tax had no jurisdiction to revise the order of the Income Tax Officer u/s 263(1) of the Income Tax Act, 1961.

Learned standing counsel has drawn our attention to Section 263(1)(c) of the Income Tax Act, which was inserted by the Finance Act, 1989, with retrospective effect from June 1, 1988. If the amended provision is taken into aid, then the Tribunal will not be right in holding that the order of the Income Tax Officer stood merged in the order of the appellate authority.

Since the Tribunal did not and could not advert to Clause (c) of Section 263(1), as it passed its order on much earlier date, we are of the view that the matter requires reconsideration in view of Section 263(1)(c) of the Income Tax Act.

We, therefore, quash the Tribunal''s order dated October 30, 1979, and send the case back to the Appellate Tribunal for deciding the abovementioned question afresh giving opportunity of being heard to the parties considering the amended provision.