Decided on May 20,1994



T.V.K. Natarajachandran, Vice-President - (1.) THIS is an appeal by the assessee, which is directed against the revisional order of the Commissioner of Income-tax under Section 263 of the Income-tax Act, 1961 dated 20-3-1989.
(2.) The assessee has raised a specific ground vide ground No. 1 challenging the jurisdiction of the Commissioner of Income-tax and three other specific grounds challenging the merits of the revisional order of the Commissioner. The assessee is a resident company. The assessment year involved is 1984-85 for which the accounting year ended on 30-6-1983. Against a loss of Rs. 74,631 returned by the assessee, the Assessing Officer determined the loss at Rs. 7,52,029. While completing the assessment, the Assessing Officer is said to have not properly enquired into the expenditure of Rs. 1,04,139 on conveyance and commission and brokerage paid at Rs. 6,81,186 on sales promotion. Further, the assessee has paid bonus at the rate of 20% though on account of loss sustained only the minimum bonus of 8.33% was payable under the Payment of Bonus Act under Section 36(1)(ii). As these claims were not properly enquired into by the Assessing Officer, the Commissioner of Income-tax concluded that the assessment order under Section 143(3) made on 30-3-1987 was erroneous and prejudicial to the interests of the Revenue. After observing the due process of law and taking into account the submissions made on behalf of the assessee, the Commissioner of Income-tax held that the question whether hiring of private taxis only would be covered by the provisions of Section 37(3B) or even engaging public taxis would also be covered by the aforesaid section requires to be investigated and verified. Even the payment of commission and brokerage is required to be considered with reference to the relevant scheme under which such expenditure was incurred and the terms and conditions under which the commission and brokerage was paid. As regards bonus, the existence of allocable surplus was required to be verified so as to justify the payment of bonus exceeding 8.33%. Failure on the part of the Assessing Officer to make the relevant enquiries and apply the law on these points rendered the assessment erroneous and prejudicial to the interests of Revenue. Therefore, the Commissioner of Income-tax set aside the assessment order and restored the matter to the file of the Assessing Officer for passing fresh order in accordance with law, after giving the assessee reasonable opportunity of being heard.
(3.) AT the time of hearing, none appeared on behalf of the assessee nor any petition was filed for adjournment. Therefore, the appeal is decided ex parte on the basis of the record and submissions of the learned D.R.;

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