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2020 (5) TMI 645 - AT - Income TaxRevision u/s 263 - validity of the revision order on the plea that they have been passed against the draft assessment orders - HELD THAT:- One gets the impression that the assessee knowingly and deliberately desisted from objecting to the initiation of proceedings against the draft assessment order in course of revision proceedings to take advantage of such mistake in future. From the aforesaid facts, it is very much clear that the assessee has not approached the Tribunal with clean hands on this issue. Therefore, no relief can be granted to the assessee. The decisions relied upon by the assessee would also be of no help as they would not apply to facts of these appeals. The grounds raised by the assessee challenging the validity of the revision order on the plea that they have been passed against the draft assessment orders are devoid of merit, hence, cannot be entertained. In any case of the matter, the mistake in the revision orders with reference to the mentioning of the draft assessment order stands rectified by issuance of corrigendum by Commissioner. For the present, assessee’s challenge regarding the validity of the revision orders no longer survives. As regards assessee’s contention that Commissioner does not have the power to issue corrigendum, we are unable to accept the same. Accordingly, ground no.1 along with additional grounds no.(IV) and (V) 4 and 5 are dismissed. Validity of exercise of power u/s 263 - Excise Duty exemption received by the assessee, whether revenue or capital - HELD THAT:- Facts and materials on record clearly demonstrate that the Assessing Officer has failed to conduct proper enquiry or has made perfunctory enquiry with regard to assessee’s claim of excise duty incentive as capital receipt. Whether the excise duty incentive is capital or revenue depends upon various factors, including, the scheme formulated by the Government allowing incentive/subsidy. AO is required to examine the issue factually and only thereafter apply the ratio laid down in the judicial precedents. AO has not even undertaken the exercise required to be undertaken by him in the first step to factually examine the nature of incentive. Allowance of assessee’s claim in respect of excise duty incentive while computing the income under the normal provisions without necessary inquiry has certainly made the assessment order erroneous and prejudicial to the interest of Revenue. Conditions of section 263 are fulfilled so as to enable the Commissioner to revise the assessment orders u/s 263 - exercise of power u/s 263 in the facts of the present case is valid. Though, we respectfully agree with the ratio laid down in the decisions cited before us by learned Counsel for the assessee, however, they would not be of any help to the assessee as we have factually found that before allowing assessee’s claim in respect of excise duty incentive, the Assessing Officer has not conducted any inquiry. We do not approve the decision of learned Commissioner in directing the Assessing Officer to disallow the excise duty incentive and add it to the income of the assessee. In our considered opinion, the issue whether the excise duty incentive is capital or revenue has to be examined by the Assessing Officer as he has not enquired into or examined it in the course of assessment proceedings. Therefore, he has to examine the issue and take a final decision on it without any fetters being put by the higher appellate authorities. Therefore, the direction of learned Commissioner insofar as it relates to addition of excise duty incentive is set aside/modified. AO is directed to examine the issue in proper perspective and take an independent view after considering all relevant facts and materials on record, submissions made by the assessee, the relevant incentive schemes/notifications, ratio laid down in the decisions to be cited as well as the orders passed by the Appellate Authorities on the issue in assessee’s own case in other assessment years. We make it clear, while deciding the issue the AO should not be influenced by any of the observations of learned Commissioner on merits. Needless to mention, the assessee must be provided adequate and proper opportunity of being heard in the matter. Ground no.2 is partly allowed for statistical purposes.
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