TaxTMI 
TaxTMI 
2012 (3) TMI 623
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....d may be prejudicial to the interest of the revenue. The Administrative Commissioner has not come to a definite conclusion that the assessing officer's order is erroneous and prejudicial to the interest of the revenue. Therefore, the exercise of power u/s 263 of the Act is not justified. The ld.representative further submitted that the Administrative Commissioner has not come to any conclusion that the exemption granted u/s 10B of the Act was not correct. The Administrative Commissioner without coming to any definite conclusion has simply set aside the order of the assessing officer for redoing the assessment. According to the ld.representative without coming to a definite conclusion about the exemption u/s 10B, the Administrative Commissio....
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.... (1968) 67 ITR 84 (SC); C.I.T. vs McMILLan & Co (1958) 33 ITR 182 (SC) and Malabar Industrial Co Ltd vs C.I.T. (2000) 243 ITR 83 (SC). 4. We have considered the rival submissions on either side and also perused the material available on record. We have also carefully gone through the order of the Administrative Commissioner u/s 263 of the Income-tax Act and the assessment order passed by the assessing officer. For the purpose of clarity we reproduce the order of assessment hereunder: " The assessee is a Private Limited company. The assessee filed its Return of income on 30/11/2006 disclosing a total income of Rs. 2542228/-. The return of income was processed under section 143(1). The case was selected for scrutiny and issued a n....
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....istrative Commissioner found that the order of the assessing officer is an error. This resulted prejudice to the interest of the revenue. A bare reading of the order of the Administrative Commissioner clearly shows that the Administrative Commissioner came to a definite conclusion that the order of the assessing officer is erroneous and prejudicial to the interest of the revenue. Nowhere the Administrative Commissioner has used the word "may". The Administrative Commissioner came to a definite conclusion that the failure of the assessing officer to conduct enquiry resulted in error and it is prejudicial to the interest of the revenue. Therefore, we are unable to appreciate the contention of the assessee that the Administrative Commissioner ....
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.... apply his mind to the facts of the case and expressly state his reasons for coming to the conclusion so as to enable the revisional / appellate authority to appreciate the issue decided in the assessment order. Otherwise, the entire system created under the Income-tax Act for appeal and revision would be defeated. 6. In this case, the assessing officer allowed the claim of the assessee without any reasoning. Therefore, the assesee may not be aggrieved. Let us assume a situation where the assessing officer disallowed the claim of the assessee without recording any reasons, then, the very same assessee might have come before this Tribunal and contended that the assessing officer passed a non speaking order without any application of mind.....
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.... judgment of the Delhi High Court may not be applicable to the facts of this case. In our opinion, the judgment of the Apex Court in Malabar Industrial Co Ltd vs Commissioner of Income-tax (supra) is applicable to the facts of the case. 8. In fact, the Apex Court in the case of Malabar Industrial Co Ltd vs Commissioner of Income-tax (supra) has examined the issue elaborately and observed as follows: " In the instant case, the commissioner noted that the Incometax Officer passed the order of nil assessment without application of mind. Indeed, the High Court recorded the finding that the Income-tax Officer failed to apply his mind to the case in all perspective and the order passed by him was erroneous. It appears that the resolut....