S. 263 vis-a-vis S. 154

Court :
SUPREME COURT

Brief :
The scope and ambit of a proceeding for rectification of an order under section 154 and a proceeding for revision under section 263 are distinct and different. Order of rectification can be passed on certain contingencies. It does not confer a power of review. If an order of assessment is rectified by the Assessing Officer in terms of section 154, the same itself may be a subject-matter of a proceeding under section 263. The power of revision under section 263 is exercised by a higher authority. It is a special provision. The revisional jurisdiction is vested in the Commissioner. An order thereunder can be passed if it is found that the order of assessment is prejudicial to the revenue. In such a proceeding, he may not only pass an appropriate order in exercise of the said jurisdiction; but in order to enable him to do it, he may make such inquiry as he deems necessary in this behalf. [Para 7] Initiation of a proceeding under section 263 cannot be held to have become bad in law only because an order of rectification was passed. No such hard and fast rule can be laid down. Each case is required to be considered on its own facts. In a given situation, the High Court may be held to be entitled to set aside both orders and remit the matter for consideration of the matter afresh. But it would not be correct to contend that only because a proceeding for rectification was initiated subsequently, the revisional jurisdiction could not have been invoked under any circumstances whatsoever. If such a proceeding was initiated the contesting parties could bring the same to the notice of the Commissioner so as to enable him to take into consideration the subsequent events also. It goes without saying that if and when the Commissioner takes up for consideration a subsequent event, the assessee would be entitled to make its submission also in regard thereto. [Para 12]

Citation :
Commissioner of Income-tax, Bhopal* v. Ralson Industries Ltd. APPEAL (CIVIL) NO. 10 OF 2007 DECIDED ON 4-1- 2007