TaxTMI Login
Just a moment...
Press 'Enter' to add multiple search terms. Rules for Better Search
Use comma for multiple locations.
---------------- For section wise search only -----------------
Accuracy Level ~ 90%
of 
Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
No Folders have been created
Are you sure you want to delete "My most important" ?
NOTE:
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
of Press 'Enter' after typing page number.
of Press 'Enter' after typing page number.
All Case Laws
Join Channel
Note
Bookmark
Share
Don't have an account? Register Here
of Press 'Enter' after typing page number.
Issues: (i) Whether, for deduction under Section 80-IA, the assessee had to satisfy the small-scale industrial undertaking condition only in the initial assessment year or in every subsequent year of the ten-year period; (ii) whether invocation of revisional jurisdiction under Section 263 was justified; (iii) whether reopening under Section 147 was sustainable where it followed the revision order.
Issue (i): Whether, for deduction under Section 80-IA, the assessee had to satisfy the small-scale industrial undertaking condition only in the initial assessment year or in every subsequent year of the ten-year period.
Analysis: The statutory scheme of Section 80-IA grants deduction for ten successive assessment years beginning with the initial assessment year. The definition of small-scale industrial undertaking in Section 80-IA(12)(f), read with the definition of initial assessment year in Section 80-IA(12)(c), links eligibility to the previous year relevant to the initial assessment year. The provision does not require a yearly re-testing of SSI status throughout the ten-year period. A contrary construction would make the provision unworkable and would defeat the object of granting incentives for industrial growth. The earlier decisions relied upon by the Revenue did not support the proposition that eligibility must be re-established in every subsequent year.
Conclusion: The assessee was required to satisfy the SSI condition only in the initial assessment year, and the deduction under Section 80-IA could not be denied merely because the undertaking later crossed the investment limit.
Issue (ii): Whether invocation of revisional jurisdiction under Section 263 was justified.
Analysis: Section 263 can be invoked only when the assessment order is both erroneous and prejudicial to the interests of the Revenue. Where the Assessing Officer adopts one of the possible views on a debatable issue, the order cannot be said to be erroneous in the relevant sense. Since the allowance of Section 80-IA deduction turned on a reasonable interpretation of the statute, the twin conditions for revision were not satisfied. The revisional order also ran contrary to consistency, because the deduction had been allowed in earlier years on the same reasoning.
Conclusion: The revisional order under Section 263 was not justified.
Issue (iii): Whether reopening under Section 147 was sustainable where it followed the revision order.
Analysis: The reopening was founded solely on the revisional action under Section 263. Once the revision itself was held unsustainable, the basis for reopening disappeared. In the absence of any independent justification, the reassessment action could not stand.
Conclusion: The reopening under Section 147 was invalid.
Final Conclusion: The Revenue's appeals failed on all substantial questions. The deduction under Section 80-IA was upheld, the revision under Section 263 was set aside, and the reassessment based on that revision was invalidated.
Ratio Decidendi: For Section 80-IA, SSI eligibility is tested with reference to the initial assessment year alone; a possible view adopted by the Assessing Officer on that question cannot be revised under Section 263 unless the order is both erroneous and prejudicial to the Revenue.
TaxTMI 
