TaxTMI 
TaxTMI 
TaxTMI 
2019 (1) TMI 98
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....essment year under dispute the assessee had filed its return of income on 30th November 2011, declaring loss of Rs. 340,47,10,171. Since, in the relevant previous year, the assessee had entered into international transactions with its overseas Associated Enterprises (A.E), the Assessing Officer made a reference to the Transfer Pricing Officer for determining the arm's length price of the international transaction. On the basis of the order passed by the Transfer Pricing Officer under section 93CA(3) of the Act, the Assessing Officer framed a draft assessment order on 27th March 2015. Against the draft assessment order so passed, the assessee raised objections before the Dispute Resolution Panel (DRP). On the basis of directions issued by the DRP, vide order dated 29th December 2015, the Assessing Officer passed the final assessment order under section 143(3) r/w section 144C(13) of the Act on 29th February 2016.When the matter stood thus, learned PCIT, under purported exercise of power under section 263 of the Act called for and examined the assessment records of the assessee pertaining to the impugned assessment year. After examining the assessment record, he observed that the....
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....the assessee has filed a Writ Application in the Hon'ble Bombay High Court. 5. The learned Sr. Counsel for the assessee submitted, the primary conditions required to be satisfied before invoking jurisdiction under section 263 of the Act are, the order sought to be revised must be erroneous and it must be prejudicial to the interests of Revenue. He submitted, keeping the aforesaid legal position in view, it has to be seen whether exercise power under section 263 of the Act is valid or not. He submitted, the Assessing Officer has passed the impugned assessment order by implementing the directions of DRP after due application of mind. He submitted, the assessee in fact has computed its income under section 44 r/w rule-2 of First Schedule of the Act. Referring to the draft assessment order passed by the Assessing Officer, a copy of which is at Page-44 of the paper book, the learned Sr. Counsel submitted, the Assessing Officer, in fact, has started with the deficit shown in Form-I as per the First Schedule. Drawing our attention to the order passed by the DRP for the impugned assessment year, the learned Sr. Counsel submitted, the DRP has not given any direction to the Assessing Office....
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....regard to the working of brought forward loss of assessment year 2009-10 he could not have held the assessment order passed to be erroneous and prejudicial to the interests of Revenue for not implementing the directions of the DRP qua the set-off of brought forward loss of assessment year 2009-10. He submitted, the very fact that learned Commissioner (Appeals) admits that he has not received any clarification from the DRP on the issue makes it clear that the DRP never intended to give any directions to the Assessing Officer to revise the brought forward loss of assessment year 2009-10. Thus, he submitted, when learned PCIT himself was uncertain about the directions of the DRP, he could not have held the assessment order to be erroneous. That is why, he submitted, learned PCIT has not given any clear directions to the Assessing Officer in the order passed under section 263 of the Act and has advised him to keep in view the clarification to be issued by the DRP. Thus, he submitted, in these circumstances the assessment order cannot be held to be erroneous and prejudicial to the interests of Revenue. In support of his contention, the learned Sr. Counsel relied upon the following decis....
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....w facing two separate and parallel proceedings for the same cause of action and despite stay being granted by the Hon'ble Jurisdictional High Court the Assessing Officer has been directed to re-compute the losses for the earlier assessment years thereby indirectly circumventing the order of the Hon'ble Jurisdictional High Court. In support of such contention, the learned Sr. Counsel relied upon the following decisions:- i) State of Tamil Nadu v/s K. Shyam Sunder, AIR 2011 SC 3470; ii) K.C. Gajapati Narayana Deo &Anr., v/s State of Orissa, AIR 1953 SC 375; and iii) CIT v/s Shri Paul John, 200 Taxman 154 (Ker.). 8. Finally, the learned Sr. Counsel submitted, the proceeding under section 263 of the Act has been initiated solely on the basis of Revenue audit objection and without any independent application of mind by learned PCIT. Thus, he submitted, for this reason also the revision order passed is legally unsustainable. For such proposition, he relied upon the following decisions:- i) CIT v/s SohanaWoolen Mills, 207 CTR 178; ii) Bongaigaon Refinery & Petrochemicals Ltd. v/s UOI, 287 ITR 120; iii) Vinay Pratap Thacker v/s CIT, ITA no.2939 of 2011; iv) Aditi Dev....
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.... has to be worked out at Rs. (-) 107,61,32,231, and this amount can be carried forward and will be available for set-off against the total income computed for the impugned assessment year. Thus, according to learned PCIT, after set-off of re-adjusted brought forward loss of assessment year 2009-10 amounting to Rs. 107,61,32,231, against the total income computed for the impugned assessment year of Rs. 280,02,18,160, there should be a positive income of Rs. 172,40,85,929. 13. In view of the aforesaid factual position, the basic issues which arise for consideration are, firstly, whether in the given facts and circumstances of the case the impugned assessment order passed by the Assessing Officer can be considered to be erroneous and prejudicial to the interests of Revenue and secondly, while exercising revisional jurisdiction under section 263 of the Act for the impugned assessment year i.e., A.Y. 2011-12, learned PCIT is competent to revise the loss determined in the assessment order passed under section 143(3) of the Act for the assessment year 2009-10. So far as the first issue relating to the correctness of the assessment order passed by the Assessing Officer is concerned, undis....
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....eding under section 263 of the Act nor it has been varied/disturbed by any other mode or manner. Though, the Assessing Officer has initiated action under section 147 of the Act for the purpose of revising the income / loss determined in the said assessment order, however, it is a fact on record that such re-assessment proceeding has been stayed by the Hon'ble Jurisdictional High Court. Thus, as on date, the assessment order passed under section 143(3) of the Act for Assessment Year 2009-10 remains valid and so also the loss determined therein. 15. It is equally true that at this stage learned PCIT could not have exercised jurisdiction under section 263 of the Act, to revise the assessment order passed for the assessment year 2009-10 insofar as it relates to computation of income / loss. Therefore, learned PCIT having no authority in law to initiate any action to rectify an error, if at all there is any, in the assessment order passed for assessment year 2009-10, has attempted to do so by invoking his revisional jurisdiction for assessment year 2011-12. One cannot lose sight of the fact that only for the purpose of revising the loss determined in the assessment order passed for....
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....h prior to the initiation of proceeding under section 263 of the Act for the impugned assessment year. Thus, the learned PCIT being aware of the fact that re-assessment proceedings on identical issue for assessment years 2009-10 and 2010-11 are pending and are also subjudice before the Hon'ble Jurisdictional High Court has still proceeded to pass the impugned order with a direction to the Assessing Officer to revise the loss determined for assessment year 2009-10. Thus, in a way, learned PCIT has attempted to sit in judgment over a matter which is already subjudice before the Hon'ble Jurisdictional High Court. When the Assessing Officer has already initiated re-assessment proceedings for assessment year 2009-10 and 2010-11 on the issue of determination of loss, learned PCIT could not have initiated proceeding under section 263 of the Act, since, two parallel proceedings on the same issue and at the same time cannot continue. Once the assessee brought to the notice of learned Principal Commissioner that proceedings under section 147 of the Act have already been initiated on the very same issue and the matter is subjudice before the Hon'ble Jurisdictional High Court, the ....