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The Delhi High Court in CIT v. Sardari Lal & Co. (2002) 120TAX595 held that the Commissioner (A) has no power to deal with an altogether new source of income or issue, which had not been considered by the assessing officer. The High Court suggested that in such a case the remedy lie either u/s 147/148 or section 263.

Further in Mohammad Ahsan Wani Vs. Commissioner of Income-tax (106ITR84) the J& K High Court held that under section 251 of the Income-tax Act, 1961, in disposing of an appeal, while the Appellate Assistant Commissioner was legally competent to set aside the order of assessment and direct the Income-tax Officer to make a fresh assessment with regard to income from sources which had been considered by the Income-tax Officer, he was not legally competent to direct the Income-tax Officer to make assessment in respect of income from other sources which were not considered by the Income-tax Officer nor on the basis of material which had not been considered by the Income-tax Officer. Thus the powers of enhancement are only with reference to items of income dealt by the order of assessment.

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