COMMISSIONER OF INCOME TAX Vs. SRI MAHASASTHA PICTURES

JUDGEMENT

(1.) THE only point that arises in the Tax Case is whether the Appellate Tribunal was right in holding that the Commissioner has jurisdiction to invoke the power under Section 263 of the Income Tax Act (hereinafter referred to as 'the Act'). In this case summary assessment order was made under Section 143(1)(a) of the Act. THE Commissioner exercised the power under Section 263 of the Act. But the Appellate Tribunal held that in view of the Circular of the Board No. 176 dated 26.8.1987, the Commissioner has no jurisdiction to revise the order passed in summary assessment. We have already taken the view in the order in T.C.Nos.61 and 62 of 1998 dated 6.11.2002 ("THE Commissioner of Income Tax, Tamil Nadu V, Madras .vs. Smt. R.G. Umaranee") that the order passed by the Income Tax Officer in the summary assessment can be revised under Section 263 of the Act, as Section 263 is widely worded to encompass any order passed by the Assessing Officer including the summary assessment order. We also found that there are no limiting words found in Section 263 of the Act to exclude the exercise of the power of the Commissioner in the case where the Assessing Officer has made a summary assessment order. We have already held that the Commissioner was advised not to invoke the powers of revision only in cases where there is a negligible tax effect. THE Tribunal has proceeded only on the basis that the Commissioner has no jurisdiction to invoke the statutory powers under Section 263 of the Act in cases of order of summary assessment made by the Income Tax Officer and we hold that the said view of the Tribunal is not legally sustainable. THE question of law referred to us reads as under:-

(2.) ACCORDINGLY, we answer the question in the negative in favour of the Revenue and against the assessee. The result is the Tribunal has to go into the question of merits of the case and decide the question as regards the merits of the claim of the assessee. The question is answered accordingly. However, in the circumstances, there will be no order as to costs.