AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2020 (7) TMI 369
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.... February 22,2017 ('Assessment Order') on the alleged ground that the order was erroneous and prejudicial to the interest of the revenue. 2. The appellant prays that it be held that the order passed by the AO is neither erroneous nor prejudicial to the interest of revenue and accordingly, the action of CIT invoking the revision proceedings and revising the order of the AO be set-aside. Without prejudice to ground no.1 Ground No.2- Allowability of provision of interest u/s. 234D under provisions of MAT: 1. On facts and circumstances of the case and in law, the CIT erred in concluding that provision of interest on income-tax amounting to Rs. 14.44 crores provided for withdrawal of excess refund is income-tax charged under the provisions of the Act and therefore, ought to have been added while computing the book profits under section 115JB of the Act. 2. The appellant prays that it be held that provision for withdrawal of excess refund is not income-tax charged under the provisions of the Act and therefore addition made by the CIT be deleted and the order of the AO be restored. 2. Brief facts of the case are that the assessee is a compan....
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.... on income under section 234D is not covered by the Explanation-1 of section 115JB. The assessee further submitted that in the impugned notice, it is mentioned that no addition is made on account of interest including under section 234D amounting to Rs. 14.40 crore, however, the AO has specifically made disallowance on this item in his order. The assessee prayed that the revision proceeding, initiated vide notice dated 15.03.2019, deserves to be dropped. 4. The ld. CIT not accepted the reply of assessee and held that the interest charged under section 234D towards withdrawal of excess refund is nothing but income tax and same is levied and accounted as such in the account of department, it is covered by Explanation 1(a) of section 115JB(2) and is required to be added with book profit and directed the assessing officer (AO) to pass the order by adding the interest under section 234D of Rs. 14.44 crore to the book profit. Thus, aggrieved by the order of ld. CIT, the assessee has filed the present appeal before the Tribunal. 5. We have heard the submission of ld. Authorized Representative (AR) of the assessee and ld. Departmental Representative (DR) for the revenue and perused t....
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.... the assessee relied upon the following decisions: • CIT vs. Kwality Steel Suppliers Complex [Civil Appeal No. 815 of 2007 (SC)]. • CIT vs. Gabrel India Ltd. [203 ITR 108 (Bom)], • ITA No. 532/Mum/2014 Everest Industries Ltd. vs. CIT dated 21.08.2019 • Panyam Cements & Minerals Industry Ltd. vs. Addl. CIT (ITA No. 706/Hyd/2013 dated 25.03.2015. • Paharpur Cooling Towers Ltd. vs. PCIT (ITA No. 1096/Kol/2017) dated 11.12.2019. • CIT vs. K. Sera. Sera Productions Ltd. [374 ITR 503 (Bom)] • Amazia Developers Pvt. Ltd. vs. DCIT (ITA No. 2499/Mum/2017 dated 08.05.2019. • Bibhuti B. Dasgupta (HUF) vs. CIT (ITA No. 5129/Mum/2012 dated 05.02.2018. 7. On the other hand, the ld. DR for the revenue supported the order of ld. CIT. The ld. DR for the revenue submits that no order has been passed by the ld CIT(A) on the issue, which is revised by ld CIT. Unless the order is passed by ld CIT(A), it cannot be said that the assessment order is merged with the appellate order of ld CIT(A). In support of his submission, relied upon the decision of Mumbai Tribunal in Sunjoy Dairy Farm vs. Secon....
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....e, the assessee objected to the proposed revision and its reply explained that the same amount has already been examined and disallowed by the AO while passing the assessment. 10. The Hon'ble Jurisdictional High Court in case of CIT Ss Gabriel India Ltd 203 ITR 108 (Bom), held that the power of suo moto revision under subsection (1) of section 263 of the Act is in the nature of supervisory direction and can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the CIT to exercise the power of revision under this sub section viz (i) the order should be erroneous and (ii) by virtue of the order being erroneous prejudice must have been caused to the interest of the revenue. And order cannot be termed as erroneous unless it is not in accordance with law. If ITO Act in accordance with law makes certain assessment; the same cannot be branded as erroneous by the CIT simply because according to him, the order should have been written more celebratory. This section does not visualise a case of substitution of the judgement of the CIT for that of the ITO, who passed the order, unless the decision is held to be erroneous. This is may be visu....
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....e issues raised by the Commissioner with regard to the treatment of excise duty and sales tax incentives was indeed dealt with in the course of assessment proceedings by the Assessing Officer. It is also clearly emerging that the stand of the assessee was not accepted by the Assessing Officer and the matter has travelled to the CIT(A) for consideration. In this context, the implications of clause (c) of Explanation 1 to Section 263 of the Act, which read as under is quite relevant. "(c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal [filed on or before or after the 1st day of June, 1988], the powers of theCommissioner under this sub-section shall extend [and shall bedeemed always to have extended] to such matters as had not beenconsidered and decided in such appeal.]" It is evident from the above that the Commissioner is not empowered to exercise his jurisdiction on an issue which is subject matter of appeal before the CIT(A). In the present case, it is undisputed that the matter on the two issues in question is pending before the CIT(A). Thus, we find that the Commiss....
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....ng before the ld. CIT(A), however, the ld DR made stressed that the order of ld. CIT(A) has not yet received/passed. Thus, the assessee cannot claim the immunity of clause -(c) of Explanation-1 of section 263(1) of the Act. The contention of the ld DR for the revenue is not acceptable to us as in the present case the AO has already analysed one aspect of the matter which was pending before the CIT(A), the matter cannot be again relooked by the ld. CIT, on any other aspect as the order of the AO would merged with the order of CIT(A) in view of the decision of the Hon'ble Bombay High Court in CIT Vs K. Sera Sera Production Ltd (supra). Thus, the Commissioner had no power to touch upon the issues of disallowance of provision of Income tax in the impugned proceedings under Section 263 of the Act. It is evident from the above that the Commissioner is not empowered to exercise his jurisdiction on an issue which is subject matter of appeal before the CIT(A). In the present case, it is undisputed that the matter on the issues in question is pending before the CIT(A). Thus, we find that the Commissioner has no jurisdiction to consider these issues in revisionary proceedings under Section 26....