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of <h1>Tribunal quashes Income Tax revision order due to procedural flaws</h1> <h3>VESUVIUS INDIA LIMITED Versus COMMISSIONER OF INCOME TAX</h3> VESUVIUS INDIA LIMITED Versus COMMISSIONER OF INCOME TAX - [2012] 54 SOT 172 Issues Involved:1. Validity of the order passed under Section 263 of the Income Tax Act, 1961.2. Justification of initiating proceedings under Section 263.3. Adjudication on merits of the issues involved in the proceedings under Section 263.4. Limitation period for passing the revision order under Section 263.Issue-wise Detailed Analysis:1. Validity of the order passed under Section 263 of the Income Tax Act, 1961:The assessee challenged the correctness of the Commissioner's order dated 29th January 2010, passed under Section 263 read with Section 143(3) for the assessment year 2002-03. The Tribunal found that the revision order was not sustainable in law because the grounds for revision were different from the grounds on which the revision proceedings were initiated. The show-cause notice indicated that the order was erroneous and prejudicial to the revenue because the Assessing Officer did not assess specific amounts, but the final revision order merely directed the Assessing Officer to verify certain aspects. This shift in the Commissioner's stand rendered the revision order unsustainable.2. Justification of initiating proceedings under Section 263:The Tribunal noted that the Commissioner's show-cause notice and the final revision order were based on different grounds. The initial notice stated that the income from repairs and services was not assessed, while the final order directed verification of these incomes. The Tribunal cited the decision in Max Investments Limited vs. ACIT and other relevant case laws, emphasizing that if a ground of revision is not mentioned in the show-cause notice, it cannot be the basis for the final order. The Tribunal concluded that the Commissioner's change in stance and failure to provide adequate opportunity to the assessee to address the new grounds invalidated the proceedings.3. Adjudication on merits of the issues involved in the proceedings under Section 263:The Tribunal observed that the Commissioner did not fault the explanation provided by the assessee and merely remitted the matter for verification. This approach was deemed unsustainable in law, as highlighted in the case of CIT vs. Gabriel India Limited. The Tribunal stated that further inquiry or fresh determination could only be directed after concluding that the original finding was erroneous and prejudicial to the revenue. Since the Commissioner did not establish such errors, the invocation of Section 263 powers was unjustified.4. Limitation period for passing the revision order under Section 263:The assessee raised an additional ground that the revision order was barred by the period of limitation under sub-section (2) of Section 263. However, the Tribunal did not address this contention as it upheld the assessee's plea on the technical ground that the revision order was based on different grounds than those stated in the show-cause notice.Conclusion:The Tribunal quashed the impugned revision order, emphasizing that the Commissioner's shift in grounds and failure to point out specific errors in the Assessing Officer's order invalidated the proceedings. The appeal filed by the assessee was allowed on these terms.
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