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TMI Blog2006 (11) TMI 164X X X X Extracts X X X X X X X X Extracts X X X X ..... unal was right in holding that the order under section 263 is ambivalent as to whether the order is erroneous and prejudicial or not merely because the Commissioner of Income-tax sent back the matter to the Assessing Officer to pass fresh orders after giving opportunity to the assessee ? 2. Whether, on the facts and circumstances of the case, an order of revision under section 263 should come to a final conclusion and should not remit the matter to the Assessing Officer ?" 2. The brief facts of the case, as stated, are as follows : 3. The relevant assessment year with which we are concerned is 1999- 2000. The assessee-company filed its return of income admitting the income of Rs. 39,36,400. The return was processed under section 143(1)( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see before restricting the claim of the assessee under section 80-IA by relying upon the decisions of the hon'ble Supreme Court and the High Court in CIT v. Kotagiri Industrial Co- operative Tea Factory Ltd. [1997] 224 ITR 604 and CIT v. Sundaravel Match Industries P. Ltd. [2000] 245 ITR 605 (Mad) and he should also duly weigh the averments of the assessee in the matter. The Assessing Officer should pass fresh assessment order with regard to the issue of disallowing the excess claim of the deduction under section 80-IA which works out to Rs. 35,81,202." 6. Exasperated by the said order of the Commissioner of Income-tax, the assessee preferred an appeal before the Appellate Tribunal, which, by order dated November 25, 2005, following th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... missioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A ; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorised by the Board in this behalf under section 120 ; (b) ' record' shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner ; (c) where any order referred to in this sub-section and passed by the Assessing Officer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ite for the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous ; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent-if the order of the Income-tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue-recourse cannot be had to section 263(1) of the Act. The provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en by the Income-tax Officer is unsustainable in law." (emphasis supplied) 9. As held by the apex court in Malabar Industrial Co. Ltd.' s case [2000] 243 ITR 83, every loss of revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law. 10. In the instant case, the Co ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. [2000] 245 ITR 605 (Mad) In this case, this court held that losses should be set off against the profits of the industrial undertaking before granting the deduction under section 80HH of the Income-tax Act, 1961, in view of the specific provision found in section 80AB of the Act. (ii) in favour of the assessee : (c) CIT v. Canara Workshops P. Ltd. [1986] 161 ITR 320 (SC) In this case, the apex court held that in the application of section 80E of the Income-tax Act, 1961, the profits and gains earned by one priority industry (mentioned in that section) cannot be reduced by the loss suffered by any other industry or industries owned by the assessee. 12. Therefore, on the facts of the case, when there are two views are possible a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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