Section 80IA(9) restriction on double deductions upheld; revision under Section 263 sustained

Section 80IA(9) bars a taxpayer from again claiming Chapter VI-A deduction on profits already allowed under Section 80IA. An assessment that granted both Section 80IA and Section 80HHC deductions without reducing the covered profits was therefore erroneous and prejudicial to the interests of the revenue. The High Court held that the Commissioner was justified in invoking revisional jurisdiction under Section 263, because the assessment order did not reflect a sustainable possible view in the face of the statutory restriction. The Tribunal erred in treating the assessment as immune from revision, and the revisional order was restored.

---

---

Issues: Whether the Commissioner was justified in exercising revisional jurisdiction under Section 263 of the Income-tax Act, 1961 to revise the assessment order while computing deduction under Sections 80IA and 80HHC, and whether the Tribunal was right in holding that the assessment order reflected a possible view not amenable to revision.

Analysis: The assessment year fell within the regime where the interaction between Section 80IA(9) and deductions under Chapter VI-A had already been judicially settled. The restriction under Section 80IA(9) required that where deduction had been claimed and allowed under Section 80IA, the corresponding profits could not again be taken into account for deduction under another provision of Chapter VI-A such as Section 80HHC. The assessment order allowed both deductions without reducing the profits covered by Section 80IA, which rendered the order erroneous and prejudicial to the interests of the revenue. The record did not support the conclusion that the Assessing Officer had adopted a sustainable possible view contrary to the statutory restriction.

Conclusion: The Commissioner was entitled to invoke Section 263, and the Tribunal was in cancelling the revisional order.

Final Conclusion: The appeal succeeded, the Tribunal's order was set aside, and the Commissioner's revisional order was restored.

Ratio Decidendi: Where an assessment allows deductions in a manner contrary to the clear restriction in Section 80IA(9), the resulting order is erroneous and prejudicial to the interests of revenue and is liable to revision under Section 263, even if the Assessing Officer is said to have taken one of the possible views.

---