COMMISSIONER OF INCOME TAX Vs. VINCENTIAN ORISSA SOCIETY

JUDGEMENT

(1.) AT the instance of the Revenue, the following question has been referred to this court for adjudication by the Income-tax Appellate Tribunal, Cuttack Bench (in short "the Tribunal"), under Section 256(1) of the Income-tax Act, 1961 (in short "the Act").

(2.) THE background facts are that the assessee was assessed for the assessment year 1973-74 for the accounting period ending on December 31, 1972, on September 18, 1979. THE assessee had filed its return of income on September 20, 1973, showing that its taxable income was nil. Subsequently, the Commissioner of Income-tax, Orissa, was of the view that the order of assessment was prejudicial to the interests of the Revenue, and proceedings under Section 263 of the Act were initiated. An objection was raised before the Commissioner that the order having been passed after approval by the Inspecting Assistant Commissioner in terms of Section 144B, the same was not available to be revised by the Commissioner under Section 263 of the Act. This objection was not accepted by the Commissioner who set aside the order of assessment and directed the Income-tax Officer concerned to redo the assessment. THE assessee assailed the order of the Commissioner before the Tribunal. THE sole challenge before the Tribunal was that the Commissioner had no jurisdiction to set aside an order passed by the Income-tax Officer where the order was passed after, approval of the draft order of assessment by the Inspecting Assistant Commissioner. It was contended that the order ceased to be one passed by the Income-tax Officer and, therefore, the Commissioner lacked competence and jurisdiction to revise the same under Section 263. THE Tribunal accepted that contention and held that the Commissioner had no jurisdiction to set aside an order passed by the Income-tax Officer where the same was passed after approval by the Inspecting Assistant Commissioner. On being moved under Section 256(1) of the Act, the aforesaid question has been referred to this court for adjudication.