TaxTMI 
TaxTMI 
2014 (6) TMI 281
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....ation of the assessment record, took the view that the impugned assessment order is erroneous and prejudicial to the interests of revenue on the reasoning that the assessing officer has allowed the deduction claimed u/s 80IB of the Act without examining following aspects viz., (a) The AO has failed to note that the assessee has completed the housing project beyond 4 years from the date of granting approval by the Local Authority. (b) The AO has failed to note that the assessee has constructed commercial space exceeding 2000 Sq. ft., which is in violation of the conditions prescribed u/s 80IB of the Act. Hence the Ld CIT initiated the revision proceedings by issuing notice u/s 263 of the Act. 3. The Ld A.R invited our attention to the provisions of sub-clauses (i) and (ii) of clause (a) to sec. 80IB(10) and submitted that the limitation period of 4 years is applicable only in those cases where the approval was granted by the Local Authority on or after 1st day of April, 2004. He submitted that the approval in the case of the assessee was granted prior to 1st April, 2004, hence the limitation period of 4 years is not applicable to the assessee. He further submitted that, ....
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.... the assessing officer, in the instant case, has passed a cryptic order without making any discussion about the claim made by the assessee u/s 80IB of the Act. She further submitted that the assessing officer did not discuss any of the issues pointed out by Ld CIT in the assessment order. Hence it is not clear as to whether the assessing officer did apply his mind and has taken a possible view in this matter. She further submitted that it is a well settled proposition that the assessment order would be rendered erroneous and prejudicial to the interests of revenue, if there is lack of application of mind on the part of the assessing officer. 8. In the rejoinder, the Ld A.R submitted that the assessee has furnished all the details and documents before the assessing officer and from those records only; the Ld CIT has drawn adverse inferences against the assessee. Accordingly, the Ld A.R submitted that the assessing officer has duly considered all the documents / details relating to the deduction claimed u/s 80IB of the Act, even though he did not discuss about them in the assessment order. Accordingly, he submitted that the assessing officer has applied his mind on the impugned is....
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....to the interest of the Revenue is explained in the judgment of the Supreme Court (headnote) : "The phrase 'prejudicial to the interests of the Revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer, cannot be treated as prejudicial to the interests of the Revenue, for example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue, or where two views are possible and the Incometax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue unless the view taken by the Income-tax Officer is unsustainable in law." The principle which has been laid down in Malabar Industrial Co. Ltd. [2000] 243 ITR 83 (SC) has been followed and explained in a subsequent judgment of the Supreme Court in CIT v. Max India Ltd. [2007] 295 ITR 282." 10. In the instant case, it is an admitted fact that the assessment order is a cryptic one and it does not contain any discussion about the deduction claimed by the assessee u/s 80IB(10) ....
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....and reasons for coming to the conclusion based on those facts and law. 11. It is pertinent to note that the Hon'ble Punjab and Haryana High Court has also expressed identical view in the case of Commissioner of Income-tax vs Sunil Kumar Goel (2005) 274 ITR 53 (P&H) by duly considering the decision rendered by the Hon'ble Apex Court in Mukherjee (S.N.) vs UOI (1990) AIR 1990 SC 1984. 12. In the instant case, there is no dispute that the assessment order was cryptic one and it did not contain any discussion about the deduction allowed to the assessee u/s 80IB of the Act. Though the Ld A.R contends that the assessee has placed all the details / documents before the assessing officer, nothing was brought on record to show that the assessing officer did apply his mind on those materials before allowing the deduction u/s 80IB of the Act. The Hon'ble jurisdictional High Court, in the case of Grasim Industries Ltd (supra) has held that the assessment order passed without application of mind on the details / documents furnished by the assessee would be rendered erroneous. The question whether the deduction is allowable to the assessee or not has got tax implications. 13. Though the....