COMMISSIONER OF INCOME TAX Vs. SITALAKSHMI MILLS LIMITED

JUDGEMENT

(1.) THE above writ appeal is directed against the order of the learned single judge of this court made in W.P. No. 2132 of 1987 dated July 28, 1995, allowing the writ petition filed by the respondent herein and thereby quashing the proceedings of the Commissioner of Income-tax, Madurai, in C. No. 401/1/104/86-87 dated February 24, 1987, whereunder the appellant herein has chosen to call upon the respondent herein to show cause as to why the order enhancing or modifying the assessment or cancelling the assessment and directing a fresh assessment should not be made. In the concluding portion of paragraph 4 of the impugued notice, it is stated that the depreciation as computed at 15 per cent. in the original order dated March 25, 1985, but actually allowed in the revision order dated December 11, 1985, is prejudicial to the interests of the Revenue and hence erroneous, requiring interference by the Commissioner under section 263 of the Income-tax Act, 1961.

(2.) THE Inspecting Assistant Commissioner of Income-tax (Assessment) Madurai, as the Assessing Officer while making the assessment of the assessment year 1982-83 by his assessment order passed on March 25, 1985, inter alia, omitted to allow depreciation on the staple fibre yarn machinery used by the petitioner, though he had in the said order decided to grant depreciation at 15 per cent. on the said machinery. THE writ petitioner filed an appeal against the said order to the Commissioner of Income-tax (Appeals), Madurai, who by his order in I.T.A. Nos. 51/84-85, 61/85-86 and 70/85-86 dated October 14, 1985, allowed the claim of the writ petitioner in the following terms :

(3.) THE assessee instead of filing objections to the notice dated February 24, 1987, to the Commissioner of Income-tax under S. 36 of the Act, rushed to this court and filed the above writ petition to call for the records of the respondent dated February 24, 1987, and to quash the same, and consequently to restrain the Commissioner of Income-tax from taking any further proceedings in this regard to the assessment of the petitioner pursuant to his notice in C. No. 401/1/104/1986-87 dated February 24, 1987, for the assessment year 1982-83. In the writ petition, it was contended that the original assessment order of the assessing authority has merged with the order of the appellate authority and, therefore, no order of the assessing authority survives or is available for revision under section 263 of the Act by the Commissioner and that section 263 empowers the Commissioner to revise the orders of his subordinates only, i.e., the assessing authority, and inasmuch as the order of the assessing authority has merged with that of the appellate authority and inasmuch as the ground on which the respondent seeks to revise the original assessment has been considered and allowed by the appellate authority, the respondent has absolutely no jurisdiction to invoke the powers under section 263 of the Act.