Invocation of Section 263 on mere DCIT Suggestion invalid

CA Suraj R. Agrawal

Brief of the Case:-

For invoking revisionary powers the Commissioner of Income Tax has to exercise his own discretion and judgment. Here the Commissioner of Income Tax has invoked the provisions of section 263 at the mere suggestion of the Dy. Commissioner of Income Tax, without exercising his own discretion and judgment. In view of the fact that the Commissioner of Income Tax has invoked the provisions of section 263 without applying his own independent judgment and merely at the behest of proposal forwarded by the Dy. Commissioner of Income Tax is against the spirit of Act. Thus, the impugned order is liable to be set aside.

Case Summary:-

Facts of the case:

1. The assessee is a company and is engaged in the business of trading, indenting agent and export of goods.
2. The assessee filed its return of income for the assessment year 2008-09 on 26-09-2008 declaring income of Rs.4,39,86,108/-.
3. During the course of scrutiny assessment, the Assessing Officer made certain additions/disallowances and assessed the total income of the assessee at Rs.4,84,82,800/- vide order dated 30-12-2010.
4. The Commissioner of Income Tax passed the impugned order setting aside the assessment order dated 30-12-2010 and directed the Assessing Officer to pass fresh assessment order.
5. Aggrieved by the order of Commissioner of Income Tax passed u/s. 263, the assessee is in appeal before the Tribunal.

Contentions of Appellant: