Tribunal overturns tax revision, citing change of opinion not meeting criteria. The Tribunal allowed the appeal of the assessee against the Principal Commissioner's order u/s.263 of the Income Tax Act, 1961, for the assessment year ...
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Tribunal overturns tax revision, citing change of opinion not meeting criteria.
The Tribunal allowed the appeal of the assessee against the Principal Commissioner's order u/s.263 of the Income Tax Act, 1961, for the assessment year 2009-10. The Tribunal found that the revision was impermissible as it was solely based on a change of opinion, which did not meet the criteria of being both erroneous and prejudicial to the Revenue. Therefore, the Tribunal quashed the order passed by the Principal Commissioner, ruling in favor of the assessee.
Issues: Appeal against Order u/s.263 of the Income Tax Act, 1961 for the assessment year 2009-10.
Analysis: The appeal was filed by the assessee against the Order passed u/s.263 of the Income Tax Act, 1961, by the Principal Commissioner of Income-tax-3, Chennai. The assessee, a partnership firm engaged in Real Estate and Construction, had filed its return of income for the assessment year 2009-10 claiming deduction u/s.80-IB of the Act. The original assessment u/s.143(3) was completed on 29.12.2011, subject to a revision u/s.263 in 2014 directing a fresh assessment. Another revision was initiated in 2016, questioning the deduction u/s.80-IB. The assessee contended that the issues had been considered in previous assessments and the revision was based on a change of opinion, which was impermissible. The Commissioner directed a fresh re-assessment, disregarding the assessee's submissions.
The Revenue supported the Principal Commissioner's order, arguing that it was within the powers to revise any order u/s.263 if found erroneous and prejudicial to the Revenue's interests. The Tribunal analyzed the submissions and highlighted that for an order to be revised, it must be both erroneous and prejudicial to the Revenue. The Tribunal disagreed with the Revenue's view that any order granting deduction to an assessee was prejudicial. It emphasized that the error in the order needed to be specifically pointed out. In this case, the revision was solely based on a change of opinion, which was impermissible under section 263. The Tribunal found that the order passed by the Principal Commissioner of Income Tax u/s.263 was based purely on a change of opinion and quashed the order.
In conclusion, the Tribunal allowed the appeal of the assessee. The order was pronounced on 8th October 2018 in Chennai.
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