SUHAS CHANRDA SEN, J. - (1.) THE Tribunal has referred the following question of law to this Court under s. 256 (2) of the IT Act, 1961 : "Whether, on the facts and in the circumstances of the case, the Tribunal is justified in holding that the CIT is not entitled to exercise the jurisdiction under s. 33 (B) of the Indian IT Act, 1922 ?"
(2.) THE assessment year involved in this Reference is the asst. yr. 1960-61. The ITO had not charged interest at the time of passing the order of assessment. Subsequently, the ITO was of the view that the non-charging of interest under s. 18A (8) was a mistake apparent from the record and sought to rectify the same. Rectification order was duly passed by the ITO under s. 18A (8). On Appeal, the AAC se aside the order or rectification because he was of the view that this was not a rectifiable error. No further appeal was taken to the Tribunal thereafter. The CIT took the view that the assessment order passed by the ITO in which interest had not been charged under s. 18A (8) was erroneous and prejudicial to the interest of the Revenue he passed an order under s. 33B of the Act, directing the ITO to revise the order of assessment. The question before the Tribunal was whether the CIT was competent to direct the ITO to modify the order of assessment under s. 18A (8) of the Indian IT Act, 1922. The order of the ITO originally passed stood rectified by the rectification order in appeal, passed by the AAC. That part of the order for charging interest has merged with the order of the AAC. Only operative order on the point of charge of interest was the order of the AAC. At that, stage, the CIT could not intervene and modify the assessment order. CIT cannot pass an order under s. 35B, revising the order passed by the ITO when the order of the ITO about the point in dispute had completely merged in the appellate order and was not in existence in the eye of law.
(3.) UNDER these circumstances, the question is answered in the affirmative and in favour of the assessee. There will be no order as to costs. bhagabati prosad banerjee,j.: I agree.;