TaxTMI 
TaxTMI 
2008 (3) TMI 504
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.... Revenue. The CIT ought not to have withdrawn the set off granted for unabsorbed depreciation of Rs. 2,00,987 against business income. 3. The brief facts of the case are that the original assessment for the year under consideration was completed under section 143(3) read with section 147 on 10-2-2003. On perusal of record the CIT noticed that during the previous year relevant to 2000-01, the assessee had two units - one unit was eligible for deduction under section 80-IA and the other unit was not eligible for deduction under section 80-IA. The assessee computed its total income as under:- Rs. Rs. Business and Profession 80,88,094 Less: Deduction under Chapter VI-A &n....
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....ut as under :- Units 80-IA Unit Other Unit Total Total Income as determined by the Assessing Officer before set-off of unabsorbed depreciation 81,85,394 (admitted by you- 78,87,107 + net disallowance- 2,98,287) 2,00,987 83,86,381 Less: Unabsorbed depreciation 65,19,760 - 65,19,760 Gross Total Income 16,65,634 2,00,987 18,66,621 Deduction under section 80-IA 16,65,634 - 16,65,634 Deduction under section 80G - 5,009 5,009 Total Income Nil 1,95,978 1,95,978 5. The CIT accordingly noticed that the Assessing Officer has allowed deduction of Rs. 18,66,621 instead of correct deduction of Rs. 16,65,634 under section 80-IA. The CIT found that the order passed by t....
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....y proceeding under this Act, and if he considered that any order passed therein by the Assessing Officer is erroneous insofar as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary pass such order making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." 9. From plain reading of sub-section (1) of section 263, it is clear that the power of suo moto revision can be exercised by the Commissioner only if, on examin....
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....rroneous assessment" refers to an assessment that deviates from the law and is, therefore, invalid. "Erroneous judgment" means "one rendered according to course and practice of Court, but contrary to law, upon mistaken view of law, or upon erroneous application of legal principals". From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is in accordance with law. In an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written or is to be calculated in a different manner. This section does not visualize a case of substitution of the judgment of the Commis....
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.... cannot be exercised. Any and every erroneous order cannot be the subiecr-matter of revision because the second requirement also be fulfilled. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed and that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax that what was just has been imposed. 10. In the light of the above discussion if we consider the facts of the case under consideration we find that original completed assessment was reopened under section 147 on the reasons that the assessee-company did not adjust unabsorbed depreciation during the year, in view of the judgment of Hon'ble Bombay High Court in the case of CIT ....