TMI Blog2019 (10) TMI 1171X X X X Extracts X X X X X X X X Extracts X X X X ..... refore, jurisdiction u/s 263 was bad in law. Upon perusal of submission dated 09/02/2016, we find that beside furnishing party-wise list of provision for doubtful debts along with ageing thereof, no other information / documents were supplied by the assessee with respect to any of the issues as pointed out by Ld. Pr.CIT. Upon perusal of impugned order, we find that Ld. Pr.CIT has invoked jurisdiction u/s 263 since, in his opinion, Ld. AO, inter-alia, failed to consider disallowance u/s 14A, Excise Duty Exemption, Retention money for the purpose of Section 115JB. Upon perusal of quantum assessment order, it is noted that Ld. AO has even failed to compute assessee s Book Profits u/s 115JB and no discussion, whatsoever, on the stated issues, emanates either from quantum assessment order or from the submissions made by the assessee during assessment proceedings. The failure to compute assessee s income u/s 115JB, in our considered opinion, would certainly make the order liable for exercise of revisional jurisdiction u/s 263. There was a certain omission on the part of Ld. AO in not considering the computation of Book Profits u/s 115JB and therefore, the jurisdiction u/s 263 was ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ltd. V/s CIT [243 ITR 83 10/02/2000] noted by Hon ble Delhi High Court in CIT V/s Vikas Polymers [194 Taxman 57 16/08/2010]. The Hon ble Supreme Court in Malabar Industrial Co. Ltd. V/s CIT (supra) has held that the phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. 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. The said principal has been reiterated by Hon ble Court in its subsequent judgement titled as CIT V/s Max India Ltd. (295 ITR 282). Similar principal has been followed by jurisdictional High Court in Grasim Industries Ltd. V/s CIT (321 ITR 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... where the Commissioner on examining the records comes to the conclusion that the earlier finding of the Income-tax Officer was erroneous and prejudicial to the interest of the revenue and that fresh determination of the case is warranted. There must be material to justify the Commissioner's finding that the order of the assessment was erroneous insofar as it was prejudicial to the interest of the revenue. 1.4 The Hon ble Delhi Court, in the cited decision, further observed that there is a fine though subtle distinction between lack of inquiry and inadequate inquiry . It is only in cases of lack of inquiry that the Commissioner is empowered to exercise his revisional powers by calling for and examining the records of any proceedings under the Act and passing orders thereon. In Gabriel India Ltd. (supra), it was expressly observed: - The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reacti ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . The different shades of power conferred on different authorities under the Act has to be exercised within the areas specifically delineated by the Act and the exercise of power under one provision cannot trench upon the powers available under another provision of the Act. In this regard, it must be specifically noticed that against an order of assessment, so far as the revenue is concerned, the power conferred under the Act is to reopen the concluded assessment under section 147 and/or to revise the assessment order under section 263. The scope of the power/jurisdiction under the different provisions of the Act would naturally be different. The power and jurisdiction of the revenue to deal with a concluded assessment, therefore, must be understood in the context of the provisions of the relevant sections. While doing so, it must also be borne in mind that the legislature had not vested in the revenue any specific power to question an order of assessment by means of an appeal. Regarding applicability of Section 263, what has to be seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudicial to the interest of the rev ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .0 That on the facts and in the circumstances of the case, the impugned order passed u/s 263 is grossly arbitrary and bad in law in relation to the issues raised and adjudicated therein and needs to be summarily deleted. 1.1 That on the facts and in the circumstances of the case, the Learned Principal Commissioner of Income Tax - I, Mumbai (here-in-after referred to as 'Ld. Pr. CIT) was not justified and grossly erred in initiating proceedings u/s 263 of the Income Tax Act, 1961 (here-in-after referred to as the 'Act'} without appreciating the fact that the order passed by the Assessing Officer (here-in-after referred to as 'Ld. A.O/) was neither erroneous nor prejudicial to interests of the Revenue and therefore the proceedings are bad in law. 1.2 That on the facts and in the circumstances of the case, the assessment u/s 143(3) having been made in accordance with law and after due consideration of the relevant facts through proper application of mind in relation to the issues mentioned in the order u/s 263, the proceedings are void ab initio and the order is to be set aside in full. 1.3 That on the facts and in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in the circumstances of the case and without prejudice to Ground No. 1.0 to 1.3 , Ground 2.0, 2.1 and 2.3 taken here-in-above, the Ld. Pr. CIT was not justified and grossly erred in directing that disallowance u/s 14A r.w.r 8D made under normal provisions by Ld. A.O. in the order u/s 143(3) should also be made while computing Book profit u/s 115JB without appreciating the fact that said disallowance is erroneous as the same has been computed by including investment which have not generated exempt income during the previous year. 3.0 That on the facts and in the circumstances of the case and without prejudice to Ground No. 1.0 to 1.3 taken here-in-above, the Ld. Pr. CIT was not justified and grossly erred in holding that claim of education cess debited to Profit Loss A/c is not an allowable business expense in computing total income under the provisions of the Act other than Sec. 115JB of the Act. 4.0 That on the facts and in the circumstances of the case and without prejudice to Ground No. 1.0 to 1.3 taken here-in-above, the Ld. Pr. CIT was not justified and grossly erred in denying the claim for deduction of provision for doubtful debts amount ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Similarly, assessee excluded amount of ₹ 30.56 Crores representing retention money u/s 115JB which has erroneously been allowed by Ld. AO. 2.4 Accordingly, the assessee was show-caused that the assessment order was erroneous as well as prejudicial to the interest of the revenue due to aforesaid errors and omissions on the part of Ld. AO. 2.5 In response, the assessee submitted that the assessee computed disallowance u/s 14A read with Rule 8D for ₹ 56.03 Lacs while computing the income under normal provisions. Since, the disallowance u/r 8D was computed as per artificial formulae, the same could not be imported as an adjustment in terms of Clause (f) to Explanation-1 to Sec. 115JB. Regarding education cess, it was submitted that cess is levied on the amount of tax and the same do not fall within the ambit of Sec. 40(a)(ii). Reliance was placed on certain judicial pronouncements to fortify the same. Regarding provision for doubtful debts, it was submitted that the assessee fulfilled the requirements of Sec. 36(1)(vii) and therefore, the same was an allowable deduction. Regarding excise duty exemption, it was contended that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 was bad in law. However, upon perusal of submission dated 09/02/2016, we find that beside furnishing party-wise list of provision for doubtful debts along with ageing thereof, no other information / documents were supplied by the assessee with respect to any of the issues as pointed out by Ld. Pr.CIT. Upon perusal of impugned order, we find that Ld. Pr.CIT has invoked jurisdiction u/s 263 since, in his opinion, Ld. AO, inter-alia, failed to consider disallowance u/s 14A, Excise Duty Exemption, Retention money for the purpose of Section 115JB. Upon perusal of quantum assessment order, it is noted that Ld. AO has even failed to compute assessee s Book Profits u/s 115JB and no discussion, whatsoever, on the stated issues, emanates either from quantum assessment order or from the submissions made by the assessee during assessment proceedings. The failure to compute assessee s income u/s 115JB, in our considered opinion, would certainly make the order liable for exercise of revisional jurisdiction u/s 263. There was a certain omission on the part of Ld. AO in not considering the computation of Book Profits u/s 115JB and therefore, the jurisdiction u/s 263 was rightly invoked by Ld. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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