Latest - TMI e-Newsletter
New User/ Regiser
2022 (9) TMI 499 - Income Tax
Revision u/s 263 - Doctrine of merger - As per CIT assessment order passed u/s. 143(3) r.w.s. 254 as erroneous and prejudicial to the interest of the Revenue - HELD THAT:- Hon’ble Bombay High Court in case of Ballarpur Industries Ltd. [2017 (8) TMI 530 - BOMBAY HIGH COURT] and in case of Vedant Ltd.[2020 (12) TMI 89 - BOMBAY HIGH COURT] held that when the assessment was completed without proper enquiry the Commissioner was competent to invoke the jurisdiction and direct fresh assessment under section 263 of the Act.
Identical issue has also been decided in case of Shri Arbuda Mills Ltd. [1996 (1) TMI 11 - SUPREME COURT] as discussed when Ld. PCIT exercises his power under section 263 of the Act in respect of claim relating to 3 items which was decided by the ITO in favour of the assessee and were not subject matter of the appeal by the assessee there is no question that order of ITO merged with that of Commissioner(Appeals) so as to exclude jurisdiction under section 263 because under the amended provisions contained under section 263 of the Act power of Commissioner under section 263 would extend and would be deemed to have been extended to three items because the same had not been considered and decided in appeal filed by the assessee.
In the instant case also the issue flagged by Ld. CIT(A) as to not ascertaining and examining the correct book profit on transfer of 9033701 shares of Adani Enterprises at the rate of Rs.201 per share which comes to Rs.189.71 crore and not at the rate of Rs.864 per share which comes to Rs.780.51 crore, which the AO has accepted without ascertaining and examining the correct facts and without making necessary enquiries/verifications which made the assessment order erroneous so far as prejudicial to the interest of the Revenue, was never agitated or decided by CIT(A) or Tribunal in original assessment or assessment framed under section 143(3) read with section 254 of the Act. So in these circumstances the PCIT has the power under section 263 of the Act. So we are further of the view that in the case laws relied upon by the assessee referred are not applicable to the facts and circumstances of the case.
When the issue flagged by Ld. PCIT has never been ascertained/examined to compute the correct book profit qua the transfer of these shares there is no question of merger of the order. Moreover, when the assessment order is apparently erroneous so far as prejudicial to the interest of the Revenue having been decided by the AO in favour of the assessee without ascertaining or examining the same order passed by Ld. PCIT does not call for any interference by the Tribunal. Consequently, appeal filed by the assessee is hereby dismissed.