Commissioner of Income Tax vs Palghat Shadi Mahal Trust

T.L. Viswanatha Iyer, J.—The Revenue seeks reference of certain questions of law as arising out of the order of the Income Tax Appellate Tribunal. The assessment in this case was made by the Income Tax Officer denying exemption to the assessee u/s 11 read with Section 13(1)(b) of the Income Tax Act, 1961. The assessee went up in appeal and the Appellate Assistant Commissioner upheld the assessee''s claim u/s 11 and directed the Income Tax Officer to modify the assessment by allowing the claim u/s 11. This order was implemented by the Income Tax Officer and the assessee was given exemption u/s 11 read with Section 13(1)(b). The Commissioner of Income Tax, however, set aside the revised order mentioned above by invoking the provisions of Section 263 of the Income Tax Act, 1961. According to him, the Income Tax Officer had not considered the applicability of Section 13(1)(bb) while passing the revised order and, therefore, he should be directed to consider the applicability of that section to the case. It was, therefore, that he invoked the revisional jurisdiction and set aside the revised order of assessment. The assessee appealed to the Tribunal against the order of the Commissioner. The Tribunal found that the Commissioner of Income Tax had no jurisdiction u/s 263 inasmuch as the Income Tax Officer had only carried out the directions of the Appellate Assistant Commissioner and, therefore, the order of the Income Tax Officer got merged with the order of the Appellate Assistant Commissioner and, therefore, there was no subsisting order to be revised u/s 263. The impugned order of the Commissioner was held unsustainable in law and it was accordingly set aside.

The Income Tax Officer had not filed any appeal against the order of the Appellate Assistant Commissioner upholding the claim of the assessee for exemption u/s 11. What the Income Tax Officer did was to comply with the order and to grant exemption to the assessee. In that event, the Commissioner could not invoke the revisional jurisdiction u/s 263 and set aside the revised order of assessment as that will in effect be setting aside the order of the Appellate Assistant Commissioner in appeal. In seeking to revise the order of fresh assessment, what the Commissioner did in effect was to set aside the order of the Appellate Assistant Commissioner and pass a revised order of assessment. Certainly this was without jurisdiction. We do not, therefore, find any referable question of law.

This petition is, therefore, dismissed.