September 2013
Assessment giving effect to the order of revision: Scope: Sections 143(3) and 263: A. Y. 2006-07: Assessee carrying on two businesses; i) Mentha business and ii) Cattle feed and green vegetable business: Separate accounts maintained: Assessment set aside u/s. 263 by finding errors in cattle feed and green vegetable business: Pursuant assessment is restricted to Cattle feed and green vegetable business: Queries concerning mentha business are beyond the scope and power:
By K. B. Bhujle, Advocate
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Smt. Shobha Govil vs. Add. CIT: 354 ITR 668 (All):
The assessee was carrying on two businesses; i) Mentha business and ii) Cattle feed and green vegetable business. Separate accounts were maintained for the two businesses. The accounts of mentha business were audited. For the A. Y. 2006-07, the assessment was completed u/s. 143(3). The Commissioner found mistakes as regards the cattle feed and green vegetable business and accordingly, exercising the powers u/s. 263 set aside the assessment order and restored the matter back to the Assessing Officer. The Commissioner had not found any mistake as regards the mentha business. After remand, the Assessing Officer served a questionnaire making inquiries with regard both the businesses. The assessee resisted the questionnaire on the ground that the remand order passed by the Commissioner u/s. 263 was confined to the determination of income of the cattle feed and green vegetable business and the income from mentha business has become final as it has not been interfered with u/s. 263 of the Act. The Assessing Officer rejected the contention of the assessee.
The Allahabad High Court allowed the writ petition filed by the assessee challenging the said stand of the Assessing Officer and held as under:
“i) The entire discussion in the order u/s. 263 was confined to the question of determination of income and expenditure of the cattle feed and green vegetable business. The discussion, paragraph after paragraph, was with regard to the cattle feed and green vegetable business, viz. its sales, sale bills, absence of addresses of the purchasers of bhusa, truck expenses and freight outward expenses, salary of the staff, all related to the cattle feed and green vegetable business.
ii) There was nothing in the order of the Commissioner suggesting that the entire assessment order was being set aside. The Assessing Officer was not justified in coming to the conclusion that he was also required to pass a fresh assessment order for the mentha business.
iii) To this extent, the order cannot be allowed to stand and was liable to be set aside.”
