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2019 (8) TMI 1266 - AT - Income TaxRevision u/s 263 - appellant argued that the notice issued u/s 263(1) was beyond the period of limitation - disallowance of the appellant’s claim u/s 80IC - AO disallowed in intimation then allowed by passing order u/s 154 - HELD THAT:- We are therefore convinced that the proceedings u/s 263, if any, qua the issue of grant of deduction u/s 80-IC, could have been initiated only with the period of two years from the end of the FY 2010-11 being the year in which the order u/s 154/143(1) was passed. This proposition is squarely supported by the decision of the Hon’ble Apex Court in the case of CIT Vs Alagendran Finance Ltd [2007 (7) TMI 304 - SUPREME COURT] Section 246A enlists various orders against which a right of appeal is provided by the Legislature and u/s 246A(1)(a), an order u/s 143(1) is specifically made an appealable order. We therefore find that if the Legislature has provided right of appeal against an intimation u/s 143(1) then there is no reason to hold that such an order is not amenable to revision u/s 263 by the Commissioner. Hence, merely because in the present case the AO initiated reassessment proceeding u/s 147 with regard to some issue other than the grant of deduction u/s 80-IC, such fact by itself did not extend the limitation period with regard to such issue. Particularly, in view of the fact that this very issue regarding grant of deduction u/s 80IC was the subject matter of disallowance in the intimation u/s 143(1) which was subsequently deleted by the AO in his order u/s 154. If one goes by the ld. CIT’s proposition that the grant of deduction u/s 80-IC was erroneous; then it is evident from the facts of the present case that the deduction was consciously allowed by the AO by an order u/s 154/143(1) dated 09.04.2010 and therefore error, if any, had crept in the said order, and not in the latter order u/s 147/143(3) dated 09.02.2016. Respectfully following the ratio decidendi laid down by the Hon’ble Apex Court in the case of CIT Vs Alagendran Finance Ltd (supra), we therefore hold that the proceedings u/s 263 had become barred on 31.03.2013 and consequently therefore the impugned order dated 22.03.2018 is held to be bad in law and accordingly quashed. Revision based on order dropping proceeding u/s 147 - We also find merit in the alternate argument of the ld. AR that the ld. Pr.CIT could not have invoked her revisionary jurisdiction u/s 263 in the given facts of the appellant’s case. As noted the proceedings u/s 147 were initiated by the AO on the basis of certain information received from Investigating Wing at New Delhi with regard to appellant’s transaction with M/s Bhola Motors Pvt Ltd. With reference to these transactions alone the AO had recorded his satisfaction that in his opinion income chargeable to tax had escaped assessment. In the course of reassessment proceedings, after conducting independent enquiries from M/s Bhola Motors Pvt Ltd the AO was satisfied that no income had escaped assessment with reference to these transactions Once the AO found his reasons to believe, to be factually unsustainable, then the only course open for him was to close such proceedings and it was no more open for him to travel to other unconnected and unrelated issues. In the circumstances what the AO himself could not have done directly in the proceedings u/s 147, the ld. Pr. CIT could not achieve it by resorting to proceedings u/s 263. We hold that the order of the ld. Pr. CIT u/s 263 is legally unsustainable and accordingly the same is hereby cancelled. - Decided in favour of assessee.
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