- (1.) Heard Mr. D.D. Chopra, learned counsel for the appellant. The instant Income Tax Appeal is directed against the judgment and order dated 19.8.2011 passed by the Income Tax Appellate Tribunal, Lucknow Bench A, Lucknow in ITA No. 230/LKW/2011 for the Assessment Year 2007 -08, whereby the Tribunal has set aside the order passed by the learned CIT inter alia on the ground that the CIT while exercising revisional powers under section 263 of the Income -tax Act can call for and examine the record of any proceeding, if he considers that any order is erroneous and prejudicial to the interests of revenue. Therefore, it is only the Commissioner of Income -tax, who has to apply his mind after examining the record of any proceeding and his satisfaction is must, whereas in the instant case, a finding has been recorded by the Tribunal that the CIT has nowhere recorded his satisfaction, but it was the satisfaction of Income -tax Officer (Technical), who is not competent to revise order under section 263 of the Act. The said order is impugned in the instant appeal. Brief facts of the present case are that the assessee is a civil Contractor, who filed his return for the Assessment Year 2007 -08 declaring an income of Rs. 3,22,980. The said return was processed under section 143(1) of the Act. Later on, the case was selected for scrutiny and the assessment under section 143(3) of the Act was framed. Subsequently, proceedings were initiated under section 263 of the Act and while setting aside the assessment order passed by the Assessing Officer, the CIT directed the Assessing Officer to pass a fresh order. Thereafter, the Assessing Officer passed an order dated 14.2.2011. Being not satisfied, the assessee has filed an appeal whereby the Tribunal set aside the order, which is impugned in the instant appeal.
(2.) LEARNED Counsel for the appellant submits that in view of the provisions of Section 292(bb), it is not open for the assessee to raise an objection with regard to the proceedings initiated under section 263 of the Income Tax Act by the Commissioner of insofar as he had participated in the proceedings and tendered his reply. Therefore, the impugned order suffers from illegality. He has relied upon the cases of CIT v. Electro House : (1971) 82 ITR 824(SC) and Gita Devi Aggarwal v. CIT : (1970) 76 ITR 496(SC). The instant appeal has been filed under section 260A of the Income -tax Act by the Income -tax Act and during the course of hearing, submissions have been advanced only with regard to the question framed at (iv), which reads as under: - (iv) Whether in the facts and circumstances of the case and in law the Income Tax Appellate Tribunal was in error in not appreciating that assessee had not objected to the notice but had participated in the revision proceedings and could not thus raise the issue of proceedings being void on the ground of improper notice for first time at the appellate stage.
(3.) CONSIDERED the submissions made by the learned Counsel for the appellant and perused the impugned judgment and order. To adjudicate the matter, it is imperative to have a look into the provisions of Section 299BB and 263(1) of the Act, which read as under: - 299 BB Notice deemed to be valid in certain circumstances - -Where an assessee has appeared in any proceeding or co -operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any provision of this Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of this Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under the Act that the notice was - - (a) not served upon him; or (b) not served upon him in time; or (c) served upon him in an improper manner; Provided that nothing contained in this section shall apply where the assessee has raised such objection before the completion of such assessment or reassessment. 263(1) Revision of orders prejudicial to revenue - - The CIT may call for and examine the record of any proceeding under this Act, and if he considers that any order passed by the AO is erroneous insofar as it is prejudicial to the interests of Revenue he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment.;