TMI Blog2019 (2) TMI 56X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings under Section 263 of the Act is unwarranted, does not come to his rescue in the present factual matrix as noticed hereinbefore. Claim of 100% deduction under Section 80IC for the assessment year 2011-12 when the industrial unit had been set up in the financial year 2005-06 relating to assessment year 2006-07, it could not be disputed that the matter is no longer res integra and is concluded by the decision of the Apex court in Classic Binding Industries case [2018 (8) TMI 1209 - SUPREME COURT OF INDIA] against the assessee and in favour of the revenue. - ITA No. 240 of 2016 - - - Dated:- 6-9-2018 - MR AJAY KUMAR MITTAL AND MR AVNEESH JHINGAN, JJ. For The Appellant : Ms. Radhika Suri, Sr. Advocate with Mr. Manpreet Singh Kanda, Advocate For The Respondent : Ms. Urvashi Dhugga, Sr. Standing Counsel ORDER Ajay Kumar Mittal, J. 1. This order shall dispose of ITA Nos. 240 of 2016 and 449 of 2015 as according to the learned counsel for the parties, the issue involved in both these appeals is identical. However, the facts are being extracted from ITA No.240 of 2016. 2. ITA No.240 of 2016 has been filed by the appellant-assessee unde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 63 of the Act on 12.11.2015 to the assessee on the ground that the deduction claimed under Section 80IC of the Act was erroneous and prejudicial to the interests of the revenue and the proceedings under Section 263 of the Act were initiated against the assessee. The assessee filed reply on 01.12.2015 which was examined by the CIT. Relying on the Tribunal s decision in the case of M/s Hycron Electronics Baddi , the order passed by the Assessing Officer was revised in exercise of jurisdiction under Section 263 of the Act. The CIT cancelled the order dated 31.01.2014 Annexure A.1, passed by the Assessing Officer and directed him to pass a fresh order in accordance with law. The assessee filed an appeal before the Tribunal. Vide order dated 21.03.2016, Annexure A.3, the Tribunal concluded that the Assessing Officer had allowed the deduction under Section 80IC of the Act without any inquiry. The Tribunal by following its own decision in the case of M/s Hycron Electronics (supra) upheld the order passed by the CIT. Hence the instant appeals by the appellant-assessee. 5. We have heard learned counsel for the parties. 6. Questions No. (i) (ii) as claimed by the assessee rela ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... prejudicial to the interests of the revenue - assumption of revisional jurisdiction under Section 263 of the Act would not be proper. 9. The object of the enactment of the aforesaid provision is to correct an order which is prejudicial to the interests of the revenue. The purpose behind incorporating this provision in the statute is to ensure that interests of the revenue is safeguarded by an erroneous order passed by the Assessing Officer as the Department has no right to file an appeal against the order of the Assessing Officer. It is not the power as a substitute for the power of the Assessing Officer to make assessment whereas the revisional power under Section 263 of the Act is certainly available where the order of the Assessing Officer is erroneous and prejudicial to the interests of the revenue. There is no strait jacket formula for categorizing an order to be erroneous and prejudicial to the interests of the revenue but depends upon the facts of each case. 10. Section 263 of the Act had been matter of legal interpretation in numerous decisions. The Apex Court in Malabar Industrial Co. Limited vs. CIT , (2000) 243 ITR 83 observed as under:- 7. There can ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thereafter deduction under Section 80IC was to be allowed @ 25% for next five assessment years. You have claimed 100% deduction in assessment year 2011-12 on the basis of substantial expansion undertaken in the firm M/s M A Industries during financial year 2010-11. The commercial activities in the firm M/s M A Industries were started in the financial year 2005- 06 and 100% deduction under Section 80IC of the Act is to be allowed only to those concerns which were in existence before coming in force the provisions of Section 80IC i.e. before 1.4.2004. The issue has not been taken up by the Assessing Officer while framing the assessment under Section 143(3) of the IT Act. Hence the issue remains unexplained on your part and unexamined on the part of the Assessing Officer. 5. In view of the facts stated above, it is held that the assessment framed under Section 143(3) on 31.1.2014 is erroneous in so far as prejudicial to the interest of the revenue. You are, therefore, requested to show cause as to why assessment framed vide assessment order dated 31.1.20124 under Section 143(3) of the Income Tax Act, 1961 should not be cancelled by invoking the provisions of section 263 of the I ..... X X X X Extracts X X X X X X X X Extracts X X X X
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