TMI Blog2012 (9) TMI 830X X X X Extracts X X X X X X X X Extracts X X X X ..... is because section 143(1) does not permit an Assessing Officer to make any addition or dis-allowance, and thus cannot be a basis for examining whether the final assessment order passed by the AO is erroneous or prejudicial to the interests of the Revenue. Moreover any proceeding of an authority under the Income-tax Act is amenable to the revisional jurisdiction of the Commissioner of Income-tax. Therefore, assessment order passed by the AO u/s 143(3), r.w.s.147, by itself is independently amenable to the revisional jurisdiction of the CIT - Ground of assessee rejected On merits it is held that Section 14A, read with Rule 8D, is not applicable to the impugned AY 2002-03. In view of aforesaid, revision order is not sustainable in law. More ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... making an addition of Rs. 3 crores under section 2(22)(e) of the Act. The above reassessment is challenged by the assessee before the Commissioner of Income-tax(Appeals). It is pending before that authority. 3. Meanwhile, the Commissioner of Income-tax perused the records of the case. He observed that the assessee had received dividend to the tune of Rs. 2,56,12,828/-, which is exempt from taxation under section 10(33) of the Income-tax Act, 1961. The Commissioner of Income-tax further observed that as per the provisions of section 14A, no deduction is available in respect of expenditure incurred in relation to income which does not form part of the total income. The assessee has not offered any disallowance of expenditure in relation to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ed on 18.11.2009 would not extend the period of limitation. The contrary view taken by the Commissioner of Income Tax, is illegal and unsustainable as per the decision of the Hon'ble Supreme Court in the case of CIT v. Alagendran Finance Ltd., reported in 293 ITR 1. 5. The appellant, therefore, humbly submits that the impugned order is illegal and unsustainable in law. 6. Without prejudice, it is further submitted that on the merits of the case also, there is no jurisdiction to invoke sec.263 in as much as the Assessment Orders u/s 143(1) dated 28.02.2003 and the order u/s 143(3) dated 18.11.2009, cannot be considered as erroneous in law and prejudicial to the interest of the Revenue. 7. In this connection, it is respectfully submitte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he ay 2002-2003. It is submitted that a notional disallowance of expenditure is not contemplated." 5. We heard Shri T.M. Sreedharan, the learned counsel appearing for the assessee and Shri Anirudh Rai, the learned Commissioner of Income-tax appearing for the Revenue. 6. The contention of the assessee that the limitation for the purpose of the impugned revision order should be reckoned with the earlier order passed under section 143(1), is not sustainable in law. This is because section 143(1) does not permit an Assessing Officer to make any addition or disallowance. Proceeding under section 143(1) is only an arithmetical processing so as to examine the correctness of computation of tax liability. The authority conferred on the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e functional operation of section 14A is not applicable to the impugned assessment year 2002-03. Therefore, if we confine the scope of the enquiry made by the Commissioner of Income-tax to section 14A as such, we find that the revision order is not sustainable in law. 8. Even in the absence of section 14A it is within the authority of the Assessing Officer to disallow such expenditure by virtue of the enabling provisions already available to him under the statute. But, in order to invoke such inherent authority, it is necessary to discern from the record that the assessee has incurred some expenditure in earning the tax-free income and that expenditure has been claimed as a deduction in computing the taxable income. While passing the orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that the reassessment order passed by the assessing authority is erroneous. Therefore, in the circumstances, we find that the impugned revision order passed by the Commissioner of Income-tax is not sustainable on facts also. 9. In the facts and circumstances of the case we set aside the revision order passed by the Commissioner of Income-tax. 10. In the miscellaneous petition the assessee prays for the recall of the ex-parte order dated 1st June, 2012 passed by the Tribunal in the stay petition filed by the assessee in this appeal. Now, as the appeal itself stands decided, the miscellaneous petition filed by the assessee has become infructuous. The same is, therefore, dismissed as such. 11. In result, the appeal filed by the assessee ..... X X X X Extracts X X X X X X X X Extracts X X X X
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