Powers of Commissioner (Appeals)

The Delhi High Court in the case of CIT v. Union Tyres (107TAX447) before it a case of a new assessee in whose case the assessing officer has estimated sales at enhanced figure and had applied a higher rate of gross profit in the absence of any books of account. The Commissioner (Appeals) however desired the assessing officer to further look into source of investment made in the purchases of goods. The assessee challenged the Commissioner’s jurisdiction to travel beyond the legitimate scope of his power u/s 251(1)  The Delhi High Court held that it is axiomatic that failure to prove the sources of investment will result in addition in the hands of the assessee under a different provision of law/head of income and will not have much relevance in the estimation of sales and gross profit rate adopted by the assessing officer. The Court in following the Supreme Court rulings in the cases of Cit v. Shapoorji Pallonji Mistry(44ITR891) and CIT v. Rai Bahadur Hardutroy Motilal Chamaria(66ITR443) held that there is a solitary but significant limitation to the power of revision, viz., that it is not open to the Commissioner to introduce in the assessment a new source of income and the assessment has to be confined to those items of income which were the subject matter of original assessment.  The Court further distinguished the cases relied by the revenue under which the courts have held that the Commissioner is vested with