Tax Tribunal overturns Income Tax Commissioner's orders for 2010-2011 & 2011-2012 assessments, directs fresh assessments.

The Tribunal upheld the Commissioner of Income Tax's revision orders for assessment years 2010-2011 and 2011-2012, finding the Assessing Officer's orders erroneous and prejudicial to revenue. The Tribunal dismissed the assessee's appeals, affirming the cancellation of the assessment orders and directing fresh assessments. The decision was rendered on 28th January, 2016, in Chennai.

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Issues involved:
Appeal against orders of Commissioner of Income Tax, assessment years 2010-2011 and 2011-2012, u/s.263 of the Income Tax Act, 1961.

Detailed Analysis:

1. Assessment Year 2010-2011:
The assessee challenged the order of u/sec.263 of the Act and additional grounds. The Assessing Officer disallowed depreciation on Air and Water pollution control devices, added excess claim of depreciation, disallowed 2% of dividend income, and treated a subsidiary as revenue instead of capital. The Commissioner of Income Tax issued a revision notice based on various issues including non-payment of Dividend Distribution Tax, ROC fees not capitalized, and disallowance u/s.14A not in accordance with Rule 8D. The assessee provided evidence for each issue, but the Commissioner found the assessment erroneous and prejudicial to revenue, cancelling the assessment order and directing a fresh assessment.

2. Assessment Year 2011-2012:
Similar issues arose for this year, with excess depreciation disallowed, disallowance under 14A, and treatment of capital subsidiary as revenue. The Commissioner issued a revision notice, and the assessee provided evidence for each issue. The Commissioner cancelled the assessment order and directed a fresh assessment. The assessee appealed against these orders before the Tribunal.

3. Tribunal Proceedings:
The assessee raised grounds on lack of jurisdiction of CIT under section 263, cancellation of Assessing Officer's order, and additional grounds on disallowance under 14A. The Tribunal considered arguments from both parties. The Commissioner's power to revise orders was discussed, focusing on the non-application of Rule 8D for the assessment years. The Tribunal upheld the order of the CIT, dismissing the grounds of the assessee and stating that the Assessing Officer's order was erroneous and prejudicial to revenue.

In conclusion, the Tribunal dismissed the appeals of the assessee for both assessment years, upholding the Commissioner's revision orders. The Tribunal's decision was pronounced on 28th January, 2016, in Chennai.

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