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2014 (12) TMI 426 - AT - Income TaxRevision of order u/s 263 by CIT Grant of relief u/s 80P - Assessee company is Co-op Bank registered under Karnataka State Co-operative Society Act 1956 Held that:- The Commissioner has exercised his power u/s. 263 in respect of order passed by AO u/s. 143(3) The Commissioner was of the view that there was a lack of examination and lack of application of mind by the AO as per provisions of Section 80P(2)(d) in case of specified Co-operative Society - assessee is not entitled for exemption of dividend income u/s. 80P(2)(d) as the assessee is a Co-operative Bank -as per the provisions the assessee is not entitled for such exemption - The Commissioner of Income Tax in his jurisdiction u/s. 263 makes it clear that pre-requisite for exercise of jurisdiction by Commissioner Suo Motu under it, is that the order of Income Tax Officer is erroneous in so far as it is prejudicial to the interest of revenue - action U/s. 263 would be valid though he has not indicated the extent of understatement of income tax act in CIT vs. Assam Tee House [2012 (6) TMI 617 - Punjab and Haryana High Court] it has been held that the AO did not undertake verification of closing stock and purchase and did not check the books of accounts - where the assessee is following the mercantile system of accounting took the interest as liability, when there was no evidence that such liability has accrued during the year, but such liability had been allowed by the AO it is a case where the deduction has been wrongly allow the jurisdiction u/s. 263 was justified - the similar issue has been decided in Malabar Industrial Co. Ltd v. CIT [2000 (2) TMI 10 - SUPREME Court] - the AO has not made enquiry and he has not applied his mind - Section 22A is similarly to Section 263 of the Income Tax Act - on the ground that the AO has jurisdiction to include the turn over by revising the assessment or reopening the assessment order Decided against assessee.
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