Section 263 revision barred after section 153D approval; debatable disallowance issues and block depreciation claim defeated revisional action.

Assessments completed under section 153A read with section 143(3) after approval under section 153D were treated as not ordinarily amenable to revision under section 263 on the same issues, so the revisional jurisdiction was found unsustainable. The Tribunal also held that revision was not justified on the merits: the section 14A disallowance issue for earlier years was debatable and had already been restricted in the assessee's own case, while depreciation on the Hyderabad unit could not be denied merely because the unit was non-functional where block-of-assets depreciation remained allowable and no contrary material was shown. The revisional order was set aside and the appeals were allowed.

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Issues: (i) Whether revision under section 263 of the Income-tax Act, 1961 was valid where the assessments were completed under section 153A read with section 143(3) after prior approval under section 153D; (ii) whether the Commissioner was justified in revising the assessments on the grounds of non-disallowance under section 14A for the earlier assessment years and non-disallowance of depreciation on the Hyderabad unit for the later assessment years.

Issue (i): Whether revision under section 263 of the Income-tax Act, 1961 was valid where the assessments were completed under section 153A read with section 143(3) after prior approval under section 153D.

Analysis: The assessments had been framed after approval by the Additional Commissioner under section 153D. The Tribunal relied on earlier coordinate bench decisions and the jurisdictional view that an assessment order so approved cannot be interfered with in revision under section 263 merely because the Commissioner takes a different view. Once the assessment had been scrutinised and approved in the statutory scheme of section 153D, the revisional jurisdiction was not available on the same matter.

Conclusion: The revision under section 263 was not sustainable and this issue was decided in favour of the assessee.

Issue (ii): Whether the Commissioner was justified in revising the assessments on the grounds of non-disallowance under section 14A for the earlier assessment years and non-disallowance of depreciation on the Hyderabad unit for the later assessment years.

Analysis: On the section 14A issue, the Tribunal noted that the relevant years were prior to the applicability of Rule 8D and that only an ad hoc disallowance of nominal expenditure had been sustained in the assessee's own case, making the matter debatable and not fit for revision. On depreciation, the Tribunal followed its earlier decision in the assessee's own case holding that depreciation is allowable on the block of assets even if an individual unit is non-functional, in the absence of contrary material. On both counts, the Commissioner's assumption of revisional jurisdiction lacked justification.

Conclusion: The revision on the merits was also unjustified and this issue was decided in favour of the assessee.

Final Conclusion: The revisional order was set aside in entirety and all the appeals were allowed.

Ratio Decidendi: An assessment order completed after statutory approval under section 153D cannot ordinarily be revised under section 263 on the same issues, and revision is also impermissible where the proposed additions rest on debatable issues already decided in favour of the assessee or on an allowable block-of-assets depreciation claim.

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