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August 2009

Revision : S. 263 of Income-tax Act, 1961 : A.Y. 2002-03 : Notice u/s.263 referring to four issues and final order passed referred to nine issues : Order of revision bad in law.

By K. B. Bhujle, Advocate
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II. Reported :



     



  1. Revision : S. 263 of Income-tax Act, 1961 : A.Y. 2002-03 :
    Notice u/s.263 referring to four issues and final order passed referred to
    nine issues : Order of revision bad in law.



[CIT v. Ashish Rajpal, 180 Taxman 623 (Del.)]

The assessee was a builder engaged in the business of
construction of properties. For the A.Y. 2002-03 the case of the assessee was
taken up for scrutiny and the assessment was completed u/s.143(3) of the
Income-tax Act, 1961. Subsequently the Commissioner issued notice u/s.263 on
four grounds. After hearing the assessee the Commissioner passed order
u/s.263, revised the assessment order and crystallised nine issues which,
according to him, required an enquiry and investigation. The Tribunal set
aside the order of the Commissioner.

On appeal by Revenue, the Delhi High Court upheld the
decision of the Tribunal and held as under :

“The notice dated 11-5-2006 issued by the Commissioner
before commencing the proceedings u/s.263 referred to four issues; while the
final order dated 18-19-1-2007 passed referred to nine issues; some of which
obviously did not find mention in the earlier notice and, hence, resulted in
the proceedings being vitiated as a result of the breach of the principles
of natural justice.”


 

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