NAZIR SINGH Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) SHRI Nazir Singh is assailing the correctness, propriety and legality of the judgment and order passed by the Commissioner of Income -tax dated December 12, 1986, and the judgment and order passed by the Income -tax Appellate Tribunal, Indore Bench, dated September 18, 1990. His grievance happens to be that the Assessing Officer, D -Ward,Ujjain, by his judgment and order dated February 27, 1986, held that in Nazir Singh's case 'salary' does not include dearness allowance or dear -ness pay unless it enters into the computation of superannuation for retirement benefits of the concerned, etc. Keeping in view, his returns were accepted and the income of Nazir Singh was taken as taxable to the tune of Rs. 18,850 and tax was levied on him in that fashion in respect of the year 1983 -84. That was carried further in the same logic to the year 1984 -85. The Commissioner of Income -tax invoked the jurisdiction in view of the provisions of Section 263 of the Income -tax Act (hereinafter referred to as 'the Act' for convenience) and found that the dearness allowance or the dearness pay happened to be included in 'salary'. He further found the taxable income pertaining to the year 1982 -83 to that tune. Nazir Singh appealed to the Income -tax Appellate Tribunal by challenging the said judgment and order, but the Income -tax Appellate Tribunal, Bench Indore confirmed the order passed by the Commissioner of Income -tax and, therefore, he came knocking at the door of the High Court for getting justice.

(2.) SHRI Nazir Singh placed reliance on some judgments for the purpose of justifying his submissions for demonstrating that the orders passed by the Commissioner of Income -tax and the Income -tax Appellate Tribunal were improper, incorrect and illegal. He placed reliance on :

(3.) IN the matter of CIT v. Rajakrishnan (B. A.) : [1997]226ITR323(Ker) , the Division Bench of the Kerala High Court held that an order of revision under Section 263 of the Income -tax Act, 1961, necessarily presupposes statutory satisfaction that although there is some error with regard to the completed assessment, the order passed by the Income -tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. It is not every error or mistake which should induce the Commissioner of Income -tax to resort to exercise of the powers under Section 263 of the Act. In that matter, the Division Bench of the Kerala High Court pointed out that in the said case the marginal loss to the Revenue and, therefore, assumption of jurisdiction under Section 263 was not valid.