TaxTMI 
TaxTMI 
2017 (4) TMI 1102
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.... income at Rs. 13. 66 crores. under the normal provisions and at Rs. 20. 42crore under MAT provisions. 2. Effective ground of appeal is about revisionary order passed by the CIT. After going through the assessment records for the year under appeal the CIT observed that during the competition of book profit the assessee had incorrectly reduced deduction u/s. 80IB(10)of Rs. 20. 42 crore that the AO had accepted the same during the scrutiny assessment that after disallowing the claim of deduction u/s. 80IB(10) from the book profit the tax payable under MAT provisions would be more. Accordingly he issued a show cause notice on 17/03/2016 to the assessee asking it as to why the original assessment order should not be treated as erroneous and ....
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....ing the course of hearing before us the Authorised Representative (AR) contended that where two views were possible and the AO had taken one view with which the CIT did not agree it could not be treated as an erroneous order. There were certain cases that favoured the view taken by the assessee. He referred to the case of Coromandel Stamping and Stones Ltd. (49 taxmann. com 70) Saluja Fabrics Ltd. (181 Taxman132) and Indian Petrochemicals Corporation Ltd. (74 taxmann. com 163). He further argued that order of the AO was neither erroneous nor education to the interest of revenue that as per subsection 5 all the provisions of the act would be applicable to the computation governed by section 115 JB that if any income was not taxable because o....
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.... i. Profit as per profit and loss account - Rs. 34. 09 crore ii. Less: deduction u/s. 80IB(10) -Rs. 20. 42 crore iii. Book profit -Rs. 13. 67 crore. The CIT held that during the computation of book profit the assessee had incorrectly reduced deduction u/s. 80IB(10) amounting to Rs. 20 42 47 985/- that the claim of the assessee was accepted by the AO without applying the provisions of section 115JB correctly that after disallowing the claim of deduction u/s. 80IB(10) from the book profit the tax payable under the MAT provisions was more and hence the same was leviable accordingly. In short the CIT held that the order passed by the AO was not only erroneous but also prejudicial to the interest of revenue. 4. 1. It is s....
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....ing tax lawfully payable by a person it will certainly be prejudicial to the interests of the Revenue. There is difference between incomplete or inadequate verification and no verification whatsoever by the AO. The order cannot be treated as an erroneous order or prejudicial to the interests of the Revenue unless the view taken by the AO is unsustainable in law. The order of the CIT must be clear and must set out logical ground and reason as to why the assessment should be revised. There is a distinction between an order being erroneous and a mistake or error committed by the AO. Incorrect assumption of facts or improper application of law that would satisfy the requirement of the order being erroneous. An order cannot be branded as erroneo....
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....nnot control the provisions of section 115JB of the Act. Principles of primary estoppel will not have any role to play when MAT provisions are to be applied. The assessee can claim its due deduction. But in the name of liberal interpretation or legitimate expectation deduction u/s. 80IB(10) cannot be brought within the fold of the section 115JB. It is a non obstante clause and provisions of section 80IB(10) cannot dilute the rigor encompassing it. As the AO had not given full effect to the provisions of section 115JB so his order would fall in the category of erroneous order. Computation made by him was not as per clear mandate of the law. The assessee itself had in the subsequent two years followed the method as suggested by the CIT in her....