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TMI Blog2025 (3) TMI 141X X X X Extracts X X X X X X X X Extracts X X X X ..... d had decided. 2. That, under the facts and circumstances, various observations made by the Ld.. Commissioner of Income Tax (Appeals), Meerut in appeal order are unwanted & needs to be expunged. 3. That the Appellant reserves its right to add, amend, modify the grounds of Appeal at the time of hearing of the appeal with the kind permission of the Ld. Income Tax Appellate Tribunal (ITAT), New Delhi. ITA No.7618/Del/2017 "1. That the Ld. Commissioner of Income Tax, Meerut has erred in Law and facts of the case by passing an erroneous order on the Duty Draw Back Issue which is fully discussed by the Ld. Assessing Officer with the Assessee firm. 2. That the Ld. Commissioner of Income Tax, Meerut has erred in Law and facts of the case in not considering the various details, pleadings and written submissions made from time to time by the Assessee firm on the Duty Draw Back Issue. 3. That the several observation as made and inference as drawn by the Authorities below is untenable, incorrect, unwarranted and uncalled for. 4. That the appellant may take any other Ground or Grounds at the time of hearing of Appeal with the kind permission of the Income Tax Appellate Tribunal, N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ced this fact that this issue was before the Ld. AO. So, it is beyond the fact that the duty draw back issue was not raised in the assessment proceedings before the Ld. AO and was not considered or examined. It was also submitted that the Ld. AO vide order sheet dated 21.11.2016, Shri Prakash Gupta, appeared and submitted the reply and documents were being examined and on that day the Ld. AO examined. 7. The Ld. AR also submitted that the principles laid down in the judgment, by the Hon'ble Supreme Court of India in the case of Liberty India vs. Commissioner of Income Tax (2009) 183 Taxman 349 (SC), not applicable in this case because said judgment only upon section 80I, 80IA and 80IB and not on 801C and Section 80IC was not existing in statute that time because the judgment passed in the case of Liberty India (supra) is for A.Y. 2001-02 and 80IC inserted thereafter by Finance Act, 2003 with effect from 01.04.2004. It is also submitted that sec. 80IA- regarding deductions in respect of profits and gains from industrial undertakings or enterprises engaged in infrastructure development, etc and sec. 80IB- regarding deduction in respect of profits and gains from certain industrial un ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... held that if the AO has not provided detailed reasons with respect to each and every item of deduction etc. in the assessment order, that by itself would not reflect a non-application of mind by the AO. It was further held that merely inadequacy of enquiry would not confer the power of revision under Section 263 of the Act of the Act on the Commissioner. The relevant paragraph of the said decision reads as under:- "17. We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the Commissioner of Income-tax under section 263 of the Income-tax Act. As noted above, the submission of learned counsel for the Revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied his m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view that the fact that a query was raised during the course of scrutiny which was satisfactorily answered by the assessee but did not get reflected in the assessment order, would not by itself lead to a conclusion that there was no enquiry with respect to transactions carried out by the assessee. 25. Further, the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd., enunciates the meaning and intont-of the phrase "prejudicial to the interests of the Revenue", in the following words:- "8. The phrase "prejudicial to the interests of the Revenue" is not an expression of art and is not defined in the Act. Understood in its ordinary meaning it is of wide import and is not confined to loss 2024 (3) TMI 157-HC-Pr. Commissioner Of Income Tax-2 Delhi Versus Mis Clex Finance India of tax. The High Court of Calcutta in Dawjee Dadabhoy & Co. v. S.P. Jain ((1957) 31 ITR 87 (Cal)), the High Court of Karnataka in CII v. T. Narayana Pai (1975) 98 ITR 422 (Kant)), the 3/21/24, 6:32 PM High Court of Bombay in CIT v. Gabriel India Ltd. (1993) 203 ITR 108(Bom)) and the High Court of Gujarat in CIT v. Minalben S. Parikh ((1995) 215 ITR 81 (Guj)) treated loss of tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of twofold conditions for the purpose of invoking jurisdiction under Section 263 of the Act. The relevant paragraph of the said decision reads as under:- "27. Learned counsel appearing on behalf of the assessee has heavily relied upon the decision of this Court in the case of Malabar Industrial Co. Ltd. (supra). It is true that in the said decision and on interpretation of Section 263 of the Income Tax Act, it is observed and held that in order to exercise the jurisdiction under Section 263(1) of the Income-tax Act, 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. It is further observed that if one of them is absent, recourse cannot be had to Section 263(1) of the Act. 27. Considering the aforesaid judicial pronouncements, it can be safely concluded that inadequacy 28 2024 (3) TMI 157-HC-Pr Commissioner Of Income Tax-2 Delhi Versus M/s Clix Finance India enquiry by the AO with respect to certain claims would not in itself be a reason to invoke the powers enshrined in Section 263 of the Act. The Revenue in the instant case has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fter detailed enquiry and after affording reasonable opportunity of being heard to the assessee. After examination and enquiries he will take appropriate action in the light of relevant provisions and rules and shall pass an assessment order de novo as per law." 11. Bare perusal of the material available on record, with regard and also in the light of the aforesaid well established principle of law, lead us to draw inference that the issue which was before the Ld. AO regarding duty draw back was properly examined by the Ld. AO and decided in favour of the assessee and Ld. PCT has not taken any enquiry as required by law or site any plausible or cogent reason to reach conclusion that the impugned assessment order was erroneous and prejudice to interest of Revenue and instead of enquiry himself, the Ld. PCIT observe that it was incumbent to the officer to investigate the matter stated in the return and only on this basis the Ld. PCIT directed to examine the issue and send back to the Ld. AO. Explanation 2 to Section 263 of the Act, does not give unfettered power to Ld. PCIT to revise each and every order to examine the issue which is already been properly examined by the Ld. AO. So, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nst the income assessed at Rs. 33,94,47,685/-vide order of assessment which is in appeal before me. 4.2 From the above facts, it is quite evident that the impugned assessment order dtd.30.12.16 which is in appeal before me does not survive at all as on date on account of the same being set aside by Pr. CIT vide her order u/s. 263 dtd.24.10.17. Thereafter, fresh assessment order has also been framed vide order dtd.28.03.18. In view of this factual matrix, the cause of action and adjudication at my end do not survive. Hence this appeal becomes in fructuous and stands disposed off accordingly. During appeal proceedings, the appellant inform me that against order u/s. 263 dtd.24.10.17, an appeal before Hon'ble ITAT 'G' Bench has been filed on 19.12.17 bearing ITA No 7618 Del/2017 which is still to be fixed up for hearing. In view of this, in case the order u/s. 263 stands quashed/set aside so as to that the subsequent assessment order dtd.28.03.18 will not survive as a result of order of Hon'ble ITAT, then in the interest of revenue, this appeal shall stand revived and will be re-fixed for hearing as per law. Moreover it is also informed that the Assessee firm has f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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