M.M. Kumar, J. - (1.) THIS order shall dispose of I.T.R. Nos. 57 of 1995 and 97 of 1998 as common question of law is involved. However, the facts are being referred from I.T.R. No. 57 of 1995.
(2.) AT the instance of the Revenue the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (for brevity "the Tribunal"), while exercising jurisdiction under Section 256(1) of the Income Tax Act, 1961 (for brevity, "the Act"), has referred the following question of law, which is claimed to have arisen from the order dated April 12, 1994, passed in I.T.A. No. 527(ASR)/1993, in respect of the assessment year 1989 -90: Whether, on the facts and in the circumstances of the case, the Tribunal is right in cancelling the order under Section 263 passed by the Commissioner of Income Tax on March 10, 1993, ignoring the provisions of Section 143 of the Incorne -tax Act relating to the assessment procedure? The assessee is a private limited company deriving income from contract work. It had filed its return on October 4, 1990, declaring an income of Rs. 35,470. As per the statement of case, the assessment was completed by the Assessing Officer under Section 143(1)(a) of the Act on December 12, 1990. Subsequently, the Commissioner of Income Tax noticed that the assessee was not maintaining day -to -day record of consumption of raw material and work -in -progress, etc. He, therefore, observed that the provisions of Section 145(1) of the Act were attracted in the case of the assessee and the income was liable to be computed by applying the net profit rate of 10 per cent, on the total receipts without allowing further deduction on account of expenses or depreciation, etc. The Commissioner of Income Tax, Jalandhar, exercised his revisional jurisdiction under Section 263 of the Act and after affording opportunity of being heard to the assessee, vide order dated March 10, 1993, held that the assessment framed on December 12, 1990, under Section 143(1)(a) of the Act was erroneous and prejudicial to the interests of the Revenue. He accordingly cancelled the same directing the Assessing Officer to frame fresh assessment after applying the net profit rate of 10 per cent, on contract receipts without allowing further deduction on account of depreciation or other expenses.
(3.) THE assessee assailed the order dated March 10, 1993, of the Commissioner of Income Tax before the Tribunal in appeal. The Tribunal, vide order dated April 12, 1994, allowed the appeal filed by the assessee, holding that the order passed by the Commissioner of Income Tax was without jurisdiction and invalid. It has been observed by the Tribunal that the order passed by the Assessing Officer under Section 143(1) of the Act, being a statutory order, was required to be served upon the assessee to become effective and since it was not served, the Commissioner of Income Tax could not exercise jurisdiction under Section 263 of the Act in cancelling the alleged order passed under Section 143(1) on December 12, 1990. The Tribunal has also observed that if the order under Section 143(1) of the Act was not a statutory order but was only an intimation then the Commissioner of Income Tax could not exercise jurisdiction under Section 263 of the Act because, the jurisdiction under Section 263 of the Act can be exercised only in relation to an "order" passed by the Assessing Officer and not in relation to an "intimation".;