TaxTMI 
TaxTMI 
2023 (4) TMI 229
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.... in passing the Order under Section 263 of the Income Tax Act, 1961 (the Act) setting aside the Assessment Order passed under Section 143(3) of the Act by wrongly holding the same to be erroneous in so far as it is prejudicial to the interest of the revenue without appreciating that the said assessment order was neither erroneous nor prejudicial to the interests of the revenue. Consequently, the order passed u/s 263 of the Act is without jurisdiction, bad in law and liable to be quashed. 2.] The Learned PCIT failed to appreciate that the provisions of Section 79 of the Act were not applicable to the case of the appellant. Further, the learned PCIT failed to appreciate that Sodexo SA, France being the ultimate holding company of the appellant controlled the voting power of the appellant both, prior to change in shareholding during the year and also after the change in shareholding & thus, the provisions of Section 79 of the Act were not applicable. Consequently, the order passed u/s 263 of the Act for invoking the provisions of Section 79 of the Act is bad in law and liable to be quashed. 3.] The learned PCIT failed to appreciate that no set off of loss had been claimed by /allo....
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....l return filed by the assessee declaring total loss at Rs.1,19,90,092/- was completed under section 143(3) of the Act at the total loss of Rs. 71,65,790/- by making addition of Rs.48,24,302/- on account of disallowance under section 36(1)(va) of the Act. 3. From the record, Ld.PCIT noticed that 75% and 25% of the shares of the assessee company were held by Sodexo Services Asia Pte Ltd and Sodexo S.A., France, respectively. However, on 31/02/2017 former share holder held no shares whereas the latter one held 99.99% shares of the assessee company. Noticing that there was a substantial change (more than 51%) in shareholding pattern when compared to the shares held on 31/03/2016, as per provisions contained under section 79 of the Act, the assessee company cannot set off its brought forward business loss of preceding assessment years to the tune of Rs.12,05,10,296/-, which made the assessment order passed under section 143(3) dated 06/12/2019 erroneous insofar as it is prejudicial to the interest of the Revenue. Declining the contentions raised by the assessee, Ld.PCIT set aside the assessment order passed under section 143(3) on the ground that the Assessing Officer has failed to con....
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....y had brought forwarded business loss of Rs.7,59,14,780/- for the assessment year (AY) 2014-15, Rs.2,35,00,110/- for the AY 2015-16 and Rs.2,10,95,397/ - for the A.Y.2016-17. 3. It can be seen that during the year under consideration, there was a substantial change in -Share holding pattern when compared to the share held on 31.03.2016. As such, it attracts provisions of section 79 of income Tax Act, 1961. Therefore, in view of the factual position and provision of the Act stated above, the assessee company cannot utilize its total brought forwarded business Toss of Rs12,05,10,296/-, which resulted in potential tax effect of Rs.3,61,53,089/-. 4. As such, the assessment order is erroneous as section 79 of income Tax Act, 1961 was applicable since there was a change in Share pattern. Hence, the order passed u/s. 143(3) on 06.12.2019 is erroneous and prejudice to the interest of revenue, within the meaning of Sec.263 of the Act. 5. In this connection, you are hereby given an opportunity of being heard and your case is fixed for hearing on 01.02.2022 at 12:30PM., On that day, you may file submission online through ITBA or you may attend before the undersigned, either in person or....
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....f the considered view that there is no error whatsoever in the impugned assessment order set aside by the Ld.PCIT. 9. Further more, the Ld.AR for the assessee drew our attention towards notice issued by the Assessing Officer during the assessment proceedings under section 142(1) of the Act requesting various details which is available at pages 74 - 82 of the paper book wherein a pertinent question has been put to the assessee that "There is substantial increase in share capital during the year, please furnish name and address of person who has invested in share capital". Similarly, in another notice issued under section 142(1) AO put a question as to the "substantial increase in share capital during the year under consideration" and in response thereto, the assessee has duly replied, which has also been extracted at pages 3 to 9 of the impugned order passed by Ld.PCIT. 10. When the issue flagged by the Ld.PCIT has already been enquired into and discussed as per details submitted by the assessee and has taken a plausible view particularly in the face of the fact that "no set off" of brought forward loss has been claimed by the assessee during the year under consideration, the asse....