2021 (9) TMI 511 - AT - Income Tax

Revision u/s 263 - grant of deduction u/s 80IA(4) of the Act has not been made in accordance with the provisions of the Act - Whether order is erroneous and prejudicial to the interest of revenue? - HELD THAT:- Hon’ble Supreme Court in Malabar Industrial Company Ltd. [2000 (2) TMI 10 - SUPREME COURT] has held that the Commissioner has to satisfy himself of both the conditions i.e. the order is erroneous and prejudicial to the interest of revenue.

Assessing Officer has raised only a query before completion of assessment u/s 143 (3) relating to claim of 80IA(4). However, the Assessing Officer has not given any cogent finding. Thus, the observation of the Principal Commissioner of Income Tax that the assessment order is erroneous and prejudicial to the interest of the Revenue does have footing.

DR’s contention that the activities for which claim u/s 80IA (4) was claimed does not come under the purview of infrastructure project specifically Clause (b) is also correct proposition. Although the assessee has given the details relating to infrastructure projects, these are included in the definition of infrastructure project u/s 80IA of the Act, amended position which come into effect from 01/04/2015. The A.O has not applied the proper interpretation of Section 80IA(4) in consonance with evidence. Thus, the Principal Commissioner of Income Tax has rightly invoked Section 263 - Decided against assessee.