By C. N. Vaze, Shailesh Kamdar, Jagdish T. Punjabi, Bhadresh Doshi Chartered Accountants
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Section 263 — Once a particular matter has been decided and considered in the appeal, and only because a particular issue or point relating to that matter has not been considered does not render the matter as unconsidered and hence does not give power to CIT to invoke section 263.
Facts:
The assessee had explained the source of investment made of Rs.4,50,000 as cash received from his mother under a will which was found to be genuine by the AO to the extent of Rs.4,00,000 and Rs.50,000 was added. However on appeal, the CIT(A) deleted the addition and the Revenue went for further appeal.
However during the pendency of the appeal, the CIT invoked the provisions of section 263 for revision of order stating the reasons that the AO had failed to examine whether the will had been probated or not, whether bequest of cash and jewellery was as per Hindu Succession Act.
The contention of the assessee was that since the matter has already been considered in the appeal, then the order of the AO got merged with the order of the CIT(A) and the CIT has no right to invoke the provisions of section 263 as per explanation (c) to section 263(1).
Held:
Once a particular matter of appeal has been considered and decided in the appeal, only because a particular point relating to the same remains unconsidered by the CIT(A), does not render the matter as unconsidered. Therefore the order of the AO merged with that of the CIT A and the CIT loses his right to invoke the provisions of section 263 as per the explanation (c) to section 263.
