TaxTMI 
TaxTMI 
2021 (1) TMI 87
X X X X Extracts X X X X
X X X X Extracts X X X X
....013-14. 2. The assessee has raised the following grounds of appeal:- 1. The order of the Principal Commissioner of Income Tax - 1 issued u/s 263 is opposed to law, facts and circumstances of the case' 2) The Principal commissioner of Income Tax has erred in passing order under section 263 for revision of assessment order u/s 143(3) for the A.Y 2013-14 to recompute the disallowance under Section 144 r.w.r 8D(2). a.. The Appellant had preferred an appeal before CIT(A) on 29.03.2016 against the disallowance under section 144 as per the assessment order under section 143(3) and the appeal was decided in favour of the revenue. Further the appellant preferred an appeal before honorable ITAT on 01.06.2017 and it is pending....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 374 ITR 503 (Bombay). e. Reliance has also been placed on the following judicial pronouncements: I. Commissioner of Income Tax vs Farida Prime Tannery (259 ITR 342), where it has been held that the issues on which the appellate authority had already deliberated, the matter could not be reopened by way of revision. II. The same view has been held in the case of Fortaleza developers vs. commissioner of lncome-Tax-15 (ITA No.2648/MUM/2012), and III. Ranga Jewellers vs Additional commissioner of Income Tax (328 ITR 148) f. Further, the appellant had replied to the notice under section 263 mentioning of the details of the appeal pending before the ITAT regarding the disallowance under section 14A but....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nce of expenditure incurred in relation of exempt income u/s.14A of the Act and was of the opinion that although the AO has disallowed expenditure in relation to exempt income u/s.14A r.w.rule 8D(2)(iii), however failed to consider disallowance of interest expenditure under Rule 8D2(ii) although the assessee has incurred huge financial cost for the relevant year which rendered the assessment order is erroneous in so far as it is prejudicial to the interest of the Revenue. In response to show cause notice, the assessee submitted that the assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue in so far as the issue of disallowance of expenditure u/s.14A r.w.rule 8D(ii) because the AO has consider....
X X X X Extracts X X X X
X X X X Extracts X X X X
....R for the assessee submitted that the ld.PCIT has erred in invoking revisional jurisdiction u/s.263 of the Act, even though the order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue. The ld.AR further submitted that the issue of disallowance of expenditure u/s.14A of the Act was subject matter of consideration from the AO during the assessment proceedings and the assessee has challenged the findings of the AO before the ld.CIT(A) against the disallowance u/s.14A of the Act and the appeal was decided in favour of the Revenue. Further, the assessee preferred second appeal before ITAT on 01.06.2017, which is pending for disposal. It is further submitted that as per clause 'c' to Explanation 1 of Section 263....
X X X X Extracts X X X X
X X X X Extracts X X X X
....h the parties, perused the materials available on record and gone through the orders of the authorities below along with case law cited by the ld.counsel for the assessee. The facts borne out from the records clearly indicate that the AO has considered disallowance of expenditure u/s.14A of the Act and has computed total disallowance of Rs. 29,37,148/- under Rule 8D(2)(iii) at the rate of 0.5% on average investments. It is also an admitted fact that the assessee has challenged the additions made by the AO towards disallowance of expenditure u/s.14A of the Act before the first appellate authority and was unsuccessful because the ld.CIT(A) has upheld the disallowance computed by the ld.AO. The assessee has preferred further appeal befor....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssue, then the PCIT cannot have parallel jurisdiction to examine the same issue u/s. 263 proceedings, because if we allow the PCIT to have jurisdiction on said issue then it leads to multiple proceedings which is not the intention of the Legislature. This view is fortified by the decision of the Hon'ble High Court of Bombay in the case of CIT vs. Sera Sera Productions Limited, supra, where the High Court clearly held that once the issue that has been considered for order u/s.263 as had already been dealt with by the appellate authority then the appellate order gets merged with the order of the Assessing Officer and consequently the Administrative Commissioner cannot invoke the revisional jurisdiction u/s.263 of the Act. 8. In this view o....