COMMISIONFRR OF INCOME-TAX VS VIPPY SOLVEX PRODUCTS (PVT.) LTD.
1999 P T D 2621
[228 I T R 587]
[Madhya Pradesh High Court (India)]
Before A.R. Tiwari and S: B. Sakrikar, JJ
COMMISIONFRR OF INCOME-TAX
Versus
VIPPY SOLVEX PRODUCTS (PVT.) LTD.
Miscellaneous Civil Case r~o.202 of 1995, decided on /01/.
th
July, 1996. Income-tax-
----Revision---Rectification of mistakes--Original order - of assessment rectified on 20-2-1987---Original order ceased to exist after that date and could not be revised in March, 19$9---Indian Income Tax Act, 1961, 5.263.
Where an initial order of assessment; dated December 12, 1986, was rectified on February 20, 1987, and revised on March 20, 1989:
Held; that no authority can revise a thing which is not in existence, The Commissioner of Income-tax lacked jurisdiction to revise the order which was not available for revision on the relevant date.
Jeewanlal (1929) Ltd. v. CIT (Addl.) (1977) 108 ITR 407 (Cal.) and Smt. S.R. Venkataraman v. Union of India AIR 1979 $C 49 ref.
A. M. Mathur with Vivek Sharan, for the Commissioner
S. S. Samvatsar for the Assessee
JUDGMENT
A. R. TIWARI, J.---At the instance of the applicant (Commissioner of Income-tax, Bhopal), the Tribunal has stated the case and referred the undernoted question, labelled, as of law, arising out of the order, dated October 15, 1993, passed by the Tribunal in I.T.A. No:403/Ind. of 1989, for the assessment year 1984-85 on an application under section 256(1) of the Income Tax Act, 1961 (for, short "the Act"), and registered as R.A. No.2/Ind. of 1994 on January 1l, 1995, for our opinion:
"Whether, on the facts and in the circumstances of the case, the Tribunal was right in holding that the Commissioner of Income-tax had no jurisdiction to revise the assessment order, dated December 12, 1986, because the same, after rectification, stood merged in the order of the Commissioner of Income-tax (Appeals)?"
Briefly stated, the facts of the case are that the assessment was originally completed on 12th December, 1986, under section 143(3) of the Act: In that assessment deduction under section 80-HHC of the Act was allowed-at Rs.2,58,553. A proceeding under section 154 of the Act was initiated. In this proceeding, the deduction under the same provision to the extent of Rs.2,48,651 was allowed on 20th February, 1987. The Commissioner of Income-tax revised the order; dated December 12, 1986, under section 263 of the Act and set aside the order with direction to the Assessing Officer to reframe the assessment in accordance with law. The aforesaid order passed under section 263 of the Act was challenged in appeal before the Tribunal. It was pointed out that an appeal against the original assessment, dated December 12, 1986, was filed before the Commissioner of Income-tax (Appeals) and in that appeal the assessee had disputed the quantum of deduction allowed under section 80-HHC. In the meantime, the assessee had moved an application under section 154 of the Act which was allowed by the Assessing Officer on February 20, 1987. The appeal presented by the assessee against the order, dated December 12, 1986, was allowed to be withdrawn as infructuous. The Commissioner of Income-tax had passed the order on March 20, 1989, under section 263 of the Act for the assessment year 1984-85: The appeal was allowed. Thereafter, the Department filed, the application under section 256(1) of the Act. On this application. the Tribunal stated the case and referred the aforesaid question.
We have heard Shri A. M. Mathur, learned senior counsel with Shri Vivek Sharan, for the applicant/Department, and Shri S.S. Samvatsar, learned counsel for the non-applicant/assessee.
We noticed that the Tribunal allowed the appeal of the assessee, directed against the order, dated March 20, 1989, passed by the Commissioner of Income-tax under section 263 of the Act in -the undernoted terms:
"In view of these facts and circumstances, it is contended by learned counsel for the assessee that the assessment order coupled with the order passed under section 154 by the Assessing Officer had merged in the order of the Commissioner of Income-tax (Appeals) and as such no order of the Assessing Officer was available for revision under section 263 to the Commissioner of Income-tax, who revised the order subsequent to the order of the Commissioner of Income?tax (Appeals) on' March 20, 1989. In support, reliance has been placed upon Jeewanlal (1929) Ltd. v. CIT (Addl.) (1977) 108 ITR 407 (Cal,). The facts of that case are in pari materia with the case in hand. It has been held in that case that under the circumstances, the assessment order had merged in the appeal order of the Commissioner of Income-tax (Appeals) and, therefore, the Commissioner of Income-tax has no jurisdiction to rectify the order. "
The contention of Shri S. S. Samvatsar is that in exercise of the powers under section 263 of the Act, the order, dated December 12, 1986, was revised, whereas that order had ceased to be in existence because of its rectification under section 154 of the Act on February 20, 1987. He, therefore, contended that on March 20, 1989, the initial order passed on December 12, 1986, was not in existence and as such there was no question of revising a non-existent order.
In Smt. S.R. Venkataraman v. Union of India AIR 1979 SC 49, it is held that any order based on non-existent facts is illegal and has to be set aside. Such orders can be denounced as infected with abuse of power. The Tribunal, thus, did the right thing in incinerating such abuse. There was no justification in not reflecting the correct position in the statement of the case and in referring the question in a light-hearted manner.
Shri Samvatsar made a categorical statement before us that the initial order, dated 12th December, 1986, was revised under section 263 of the Act on March 20, 1989, whereas the aforesaid order had vanished on 20th February, 1987, in proceedings initiated under section 154 of the Act.
In view of the aforesaid factual matrix, counsel for the applicant was unable to satisfy us as to how the Tribunal was not right to pass the order as it did. No authority can revise a thing, which is not in existence. There is no dispute to this proposition of law.
In the circumstances, eve are satisfied that the Tribunal has committed no -error of law and rightly held that the Commissioner of Income?tax had lacked jurisdiction to revise the order, which was not available for revision on the relevant date.
In the result, we answer the question in the affirmative, i.e., in favour of the assessee and against the Department.
The aforesaid miscellaneous civil case, thus, stands disposed of with no order as to costs. Counsel fee for each side is, however, fixed at Rs.750, if certified. Transmit a copy of this order to the Tribunal.
M . B. A. /3031 /FC ?????????????????????????????????????????????????????????????????????????? Reference answered