2018 (12) TMI 1562 - ITAT MUMBAI

Rectification order passed u/s 154 - Admissibility of deduction claimed u/s 80IB(10) - return of income filed beyond the due date prescribed u/s 139(1) claiming deduction u/s 80IB(10) - Held that:- Since the income has already been taxed, it is the contention of the assessee, that the same would result in double taxation, if the claim of application is rejected. Even though the Ld CIT(A) has expressed the view that this issue may fall outside the scope of sec.154 of the Act, he has not given any specific direction to the AO. The assessee, in the alternative contended that where an expenditure is disallowed, it will go to increase the profits eligible for deduction u/s 80IB(10) of the Act. - AO has not considered the binding decision of the jurisdicitonal High Court [2015 (9) TMI 806 - BOMBAY HIGH COURT] and the same constitutes mistake apparent from record. Accordingly we direct the AO to allow deduction u/s 80IB(10) of the Act on the disallowance of ₹ 9.00 crores made by him.

Validity of Cross Objection (CO) filed by the Revenue - Held that:- What cannot be achieved directly cannot be achieved indirectly. In the instant case, the revenue has fairly admitted that the time limit for reopening of assessment has already expired, meaning thereby, the AO could not disturb the assessment order already passed by him, even if any wrong is found therein. By filing this CO before the Tribunal, that too in an appeal proceeding challenging the rectification order passed u/s 154, the revenue is trying to achieve its objectives, which could not be achieved by it directly. The said objectives are sought to be achieved indirectly on the basis of allegation of fraud, since the AO could not take direct action due to expiry of limitation period.

A.R also submitted that the assessee has filed its return of income for AY 2012-13 also beyond the due date prescribed u/s 139(1) of the Act claiming deduction u/s 80IB(10) of the Act. It was submitted that the AO has allowed the said deduction in AY 2012-13. Accordingly, it was submitted by Ld A.R that there is no merit in the allegation of fraud, if any, committed by the assessee, as the AO himself has allowed deduction in the succeeding year on the basis of belated return of income.

In view of the foregoing discussions, we are convinced that the the CO filed by the revenue is not maintainable. Accordingly we reject the same.

Absence of approval of Principal Commissioner or Commissioner - Held that:- We have earlier noticed that the revenue has furnished sanction of Ld CIT only in respect of original grounds of appeal filed by it. The approval in respect of revised grounds of appeal was not placed before us. The provisions of sec.253(2) mandates that the AO should file appeal on the direction of the Principal Commissioner or Commissioner, as the case may be. We notice that the practice followed by the revenue is to furnish a copy of approval granted by Ld Pr. CIT or CIT to the grounds urged by the assessing officer. Accordingly, in the absence of approval of Principal Commissioner or Commissioner, the reframed grounds of the revenue are liable to be rejected on this ground also.