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TaxTMI 
TaxTMI 
TaxTMI 
2019 (2) TMI 56
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....s are being extracted from ITA No.240 of 2016. 2. ITA No.240 of 2016 has been filed by the appellant-assessee under Section 260A of the Income Tax Act, 1961 (in short, "the Act") against the order dated 21.03.2016, Annexure A.3 passed by the Income Tax Appellate Tribunal, Chandigarh Bench (in short, "the Tribunal") in ITA No.9/Chd/2016, for the assessment year 2011-12. 3. The appeal was admitted on 15.09.2016 to consider the following substantial questions of law:- i) "Whether on the facts and in the circumstances of the case, the Income Tax Appellate Tribunal erred in law in upholding the proceedings under Section 263 of the Income Tax Act even though the original assessment order had been passed after due application of mind and after....
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..../-. The Assessing Officer passed the assessment order accepting the claim of deduction under Section 80IC of the Act by the assessee. Thereafter, the Principal Commissioner of Income Tax (CIT) issued a notice under Section 263 of the Act on 12.11.2015 to the assessee on the ground that the deduction claimed under Section 80IC of the Act was erroneous and prejudicial to the interests of the revenue and the proceedings under Section 263 of the Act were initiated against the assessee. The assessee filed reply on 01.12.2015 which was examined by the CIT. Relying on the Tribunal's decision in the case of M/s Hycron Electronics Baddi, the order passed by the Assessing Officer was revised in exercise of jurisdiction under Section 263 of the Act. T....
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....sts of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation.- xxxxxxxxx" 8. A bare perusal of Section 263 of the Act makes it clear that before the CIT passes any order, an opportunity of hearing is required to be provided to the assessee and thereafter, prima facie finding recorded that the order made by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue. Power under Section 263 of the Act can be ex....
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....vailable where the order of the Assessing Officer is erroneous and prejudicial to the interests of the revenue. There is no strait jacket formula for categorizing an order to be erroneous and prejudicial to the interests of the revenue but depends upon the facts of each case. 10. Section 263 of the Act had been matter of legal interpretation in numerous decisions. The Apex Court in Malabar Industrial Co. Limited vs. CIT, (2000) 243 ITR 83 observed as under:- "7. There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application....
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....ficer under Section 143(3) of the Act shows that the returned income of the assessee at Rs. 8,97,200/- was accepted. However, the CIT while exercising revisional jurisdiction under Section 263 of the Act expressly noted regarding the claim of the assessee @ 100% deduction under Section 80IC of the Act as under:- "3. From the perusal of the assessment record, it has been noticed that the initial year for claiming deduction under Section 80IC is assessment year 2006-07. Accordingly, you were eligible for claiming 100% deduction upto next five years i.e. till assessment year 2010-11 and thereafter deduction under Section 80IC was to be allowed @ 25% for next five assessment years. You have claimed 100% deduction in assessment year 2011-12 on....
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.... under:- "In view of the clear position of law the assessee was entitled for 25% and not 100% of the profit and gains of the unit for which initial year was assessment year 2006-07. This position of law has also been held by the Hon'ble ITAT, Chandigarh in its decision dated 27.5.2015 deciding twenty appeals through a composite order in the lead case of M/s Hycron Electronics Baddi, Solan vs. ITO, Ward 2, Baddi in ITA No.798/Chd/2012. However, in the instant case the AO did not apply the correct provision and allowed hundred percent of the profit and gains as deduction under Section 80IC making the order patently erroneous as well as prejudicial to the interest of revenue. This action of the Assessing Officer in allowing 100 per cent dedu....