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2018 (10) TMI 716 - AT - Income TaxRevision u/s 263 - AO denied exemption under Section 10(20) - total income was determined at Nil by observing that the loss could not be carried forward for set off against the income of the later years on the premise that the loss return filed by the assessee was not within the time prescribed under Section 139(1) - Held that:- In the original assessment, the AO determined total income at Nil and did not allow carry forward of loss computed at ₹ 382.09 crore. It is a matter of record that pursuant to the revisionary order, the Assessing Officer again took up the assessment under Section 143(3)/147 read with section 263 of the Act and passed a fresh assessment order on 27.12.2017 determining the total income at Rs. Nil and did not allow carry forward of loss of ₹ 455.99 crore. This shows that the income originally determined by the Assessing Officer at Nil remained the same even after giving effect to the order passed in revision. Thus, we are confronted with a situation in which the original assessment as well as the assessment giving effect to the impugned order, remain at Nil income, and in both the situations, there is no carry forward of loss. In other words, the shortcomings noticed by the ld. CIT in assessment order, which in his opinion made the order erroneous, are tax neutral. In the circumstances as are instantly obtaining, variation in the amount of loss, without allowing any carry forward to subsequent year(s) for set off, is in no way prejudicial to the interest of the Revenue. Since the original assessment order in the instant case satisfies, at the most, the first condition under Section 263 of the Act, being erroneous from the stand point of the ld. CIT, it fails to satisfy the second condition of being, prejudicial to the interest of the Revenue. The exercise of revisionary power gets vitiated because of cumulative non-fulfilment of the statutory conditions stipulated in the provision - decided in favour of assessee.
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