TaxTMI 
TaxTMI 
2013 (1) TMI 90
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....80 IA, was not deducted from the profits and gains of the business before computing relief under Section 80 HHC of the IT Act. The respondent-assessee was, thus, served with a show cause notice dated 18/20.02.2009 under Section 263 of IT Act. 3. After hearing the respondent-assessee by the Revisional Authority in its order dated 18.03.2009 (Annexure A-2) observed as under:- "3.1.1 For the sake of coherence second arguments put forth by the assessee company is discussed at first place. Sub Section 9 of Section 80IA is reproduced as under:- "(9) Where any amount of profits and gains of an (undertaking) or of an enterprise in the case of an assessee is claimed and allowed under this section for any assessment year, deduction to the extent of such profits and gains shall not be allowed under any other provisions of this Chapter under the heading "C. - Deductions in respect of certain incomes", and shall in no case exceed the profits and gains of such eligible business of (undertaking) or enterprise, as the case may be. 3.1.2 Very plain reading of sub Section makes it amply clear that where any amount of profits and ga....
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....his appeal filed by CIT against the above order of the ITAT, following substantial question of law has been proposed:- "Whether, on the facts and circumstances of the case, the Hon'ble ITAT has erred in law in cancelling the order dated 18.03.2009 of CIT-I, Ludhiana passed u/s 263 by holding that it does not contain any firm decision that the order of the Assessing Officer passed under Section 143(3) of the Act was erroneous in the eyes of law when the CIT in his order u/s 263 has clearly brought out that plain reading of the subsection 9 of Section 80IA of the I.T. Act makes it amply clear that where any amount of profits and gains in the case of an assessee is claimed and allowed u/s 80IA deduction to the extent of such profits and gains shall not be allowed under this Chapter i.e. Chapter VI-A. Section 80HHC also falls in Chapter VI-A, therefore, deduction u/s 80HHC is not be computed on profits and gains of an industrial undertaking on which deduction u/s 80IA has been allowed? It is stated that the tax effect involved in this case is Rs. 96,92,017/-. 7. We have heard learned counsel for the parties and have given our thoughtful consideration to the ....
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....rcise his powers under Section 263 to differ with the view of the AO even if there has been a loss of revenue. Of course, if the AO takes a view which is patently unsustainable in law, the CIT can exercise his powers under Section 263 where a loss of revenue results as a consequence of the view adopted by the AO. It is also clear that while passing an order under Section 263, the CIT has to examine not only the assessment order, but the entire record of the profits. Since the assessee has no control over the way an assessment order is drafted and since, generally, the issues which are accepted by the Assessing Officer do not find mention in the assessment order and only those points are taken note of on which the assessee's explanations are rejected and additions / disallowances are made, the mere absence of the discussion of the provisions of Section 80IB(13) read with Section 80IA (9) would not mean that the AO had not applied his mind to the said provisions. As pointed out in Kelvinator of India's case (supra) [CIT Vs. Kelvinator of India Ltd. (2002) 256 ITR 1 (Del) (FB), when a regular assessment is made under Section 143(3), a presumption can be raised that the order has been ....
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....tion 263 of IT Act on 20.02.2006. There might be a conflict of view on the interpretation of relevant provisions by various Benches of Tribunal at the relevant time but the present is a case in which the assessment order is dated 28.12.2006 and CIT passed the order on 18.03.2009, when the proposition of law had been well settled by the Special Bench (Chennai) of the Tribunal on 27.04.2007 in the case of Asstt. CIT Vs. Rogni Garments & Ors, (2007) 294 ITR 15 (Chennai), as also noticed by the Delhi High Court in Honda Siel Power Products Ltd.'s (supra). The Special Bench (Chennai) in Rogini Garments' case (supra) held as under:- "42.......Section 80HHC is part of Chapter VI-A. Hon'ble jurisdictional High Court in the case of CIT v. Sharon Vancers P. Ltd. T.C. (A) No. 62 of 2004 dt. 26.02.207, has made it clear that it is not correct to say that Section 80HHC of the Act is a self contained provision. The deduction cannot be allowed ignoring the restrictive clause contained in Section 80-IA(9). The restrictive clause in Section 80-IA makes it abundantly clear that wherever deduction under any other section of Chapter VI-A(C) is claimed, the computation will be sub....
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.... provision. That case, however, did not involve the interpretation of sub Section (9) of Section 80IA of the Act. 15. Should we not adopt a uniform interpretation to the plain meaning of the section instead of leaving it to the absolute and arbitrary discretion of AO to accept one of the two possible views in preference to the other? 16. The respondent-assessee, in the present case, had in its return of income tax, claimed deduction under Section 80IA at Rs. 12.01 crores and Section 80HHC of the IT Act at Rs. 5.75 crores and declared the total income of Rs. 82.47 lacs. The AO allowed the deduction under Section 80IA to the tune of Rs. 14.04 crores and deduction under Section 80HHC to the tune of Rs. 2.42 crores. The CIT on perusal of the assessment order found the assessment order to be both erroneous and prejudicial to the interest of Revenue and rightly so as deduction under Section 80HHC was allowed on eligible profits of business without reducing the profits of business on which deduction under Section 80IA had been allowed. There was, thus, contravention of Section 80IA(9), which clearly indicates the extent of restriction to which the deduction under other provision of ....