TaxTMI 
TaxTMI 
2011 (11) TMI 390
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.... of Income Tax under Section 263 of the Act dated 31.12.2009?" 2. For the assessment year 2005-06, the respondent-assessee filed a return declaring loss of Rs. 47,83,774/- on 29.10.2005. Vide assessment order dated 26.12.2007, the Assessing Officer calculated the book profits under Section 115JB of the Act and assessed the gross total income at Rs. 17,82,47,622/-. From the aforesaid amount, deduction of Rs. 17,82,47,622/- was allowed under Section 80IA of the Act. Some more amounts were added and the book profits were ultimately computed at Rs. 19,25,37,634/-. 3. Later on the Commissioner of Income Tax (CIT, for short) issued notice under Section 263 of the Act as he was of the opinion that deduction under Section 80IA had been wrongl....
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....te consideration as per law. At the same time it is also a matter of record that there is a lack of enquiry/investigation on the part of the Assessing Officer. To that extent it can certainly be held that the order of the AO is both erroneous as well as prejudicial to the interest of revenue. Therefore, the provision of section 263 of the Act and the order of the Assessing Officer is set aside to be redone afresh. The assessee shall be given reasonable opportunities of being heard." 6. The findings recorded by the CIT are clear that there was lack of enquiry and investigation and thus the order passed by Assessing Officer was erroneous and prejudicial to the interest of the Revenue. He did not examine the merits, bifurcation and justific....
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....rder erroneous. [Duggal & Co. v. CIT [1994] 77 Taxman 331/[1996] 220 ITR 456 (Delhi)]. 9. The term "prejudicial to the interest of the Revenue" are of wide import and if the Assessing Officer fails to apply his mind to the case in the right perspective, there is prejudice to the interest of the Revenue. Loss of revenue may not be the sole criteria. 10. It has been held that when two views are possible and the Assessing Officer has taken one view with which the CIT does not agree, power under Section 263 cannot be exercised. This, however, is subject to the condition that view taken by Assessing Officer is permissible and not erroneous. [Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83/109 Taxman 66 (SC)]. If the view taken by Asse....
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....ee and examined it on merits and decided whether or not a particular income qualifies for deduction under Section 80IA. In the said exercise, the tribunal has relied upon submissions made by the assessee and accepted, the bifurcation and nature and character of interest income and then decided whether it qualifies for deduction or not. We do not know on what basis the said bifurcation in respect of the two units and the nature and character of income were accepted. This aspect had not been examined by the CIT, who had given only a tentative opinion that some element of interest income may be eligible. The right and proper course in the present case was to ask the CIT to examine the said factual aspect rather than the tribunal giving their o....