TaxTMI 
TaxTMI 
2022 (7) TMI 844
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....med refund of Rs.2,13,71,035/- and had claimed deduction of Rs.5,87,89,770/- u/s 80IC of the Act. The assessment was completed u/s 143(3) of the Act at an income of Rs.4,76,40,025/- after making an addition of Rs.2,12,00,265/- on account of share of the assessee company in the industrial property bearing No.70, Industrial Area, Phase-I, Chandigarh by making the calculation of the share of the assessee company at 20%. 2.1 Subsequently, notice u/s 148 of the Act was issued on 10.03.2017 by recording reason that the assessee had started its manufacturing activities in financial year 200405 relevant to assessment year 2005-06 and had claimed 100% deduction for assessment years 2005-06, 2006-07 and 2007-08 u/s 80IC of the Act. It was further recorded by the AO that as per the provisions of the Act, the assessee was eligible for 100% deduction for assessment years 2008-09 and 2009-10 also and the assessee was eligible for 30% deduction from assessment years 2010-11 to 2014-15. It was further recorded by the AO that the assessee had undertaken substantial expansion during financial year 2008-09 relevant to assessment year 2009-10 and had again started claiming 100% deduction from asses....
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.... Act, was erroneous in so far as it was prejudicial to the interest of the Revenue. The Ld. Pr.CIT proceeded to set aside the assessment order on the ground of the AO taking assessment year 2009-10 as the year of completion of substantial expansion of Baddi unit and consequent allowance of deduction u/s 80IC of the Act. The AO was directed to modify the assessment order dated 27.11.2017 in accordance with the directions of the Ld. Pr.CIT. 2.5 Now the assessee has approached this Tribunal challenging the order of the Ld. Pr.CIT by raising the following grounds of appeal: "1. That the Ld. Principal Commissioner of Income Tax has wrongly assumed jurisdiction under section 263 of the Act to set-aside the assessment order dated 27.11.2017 passed by the Assessing Officer in as much as the order is neither erroneous nor prejudicial to the interest of Revenue and as such the assumption of jurisdiction under section 263 of the Act is illegal, arbitrary and unjustified. 2. That the Ld. Principal Commissioner of Income Tax has passed the order u/s 263 only on the basis of an audit objection which is not permissible and as such the order passed is illegal, arbitrary and un....
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....er passed by the ITAT for the same assessment year i.e. 2013-14, the order of the AO as well as of the Ld.CIT(A) got merged with the order of the ITAT which had attained finality and, therefore, the Ld. Pr.CIT had no power to pass order u/s 263 of the Act on 30.03.3021 when the Tribunal had already passed the order on 14.06.2019. 3.1 The Ld. AR submitted that the issue raised in the 263 order is identical to the issue on which the re-assessment notice had been issued u/s 148 of the Act i.e. whether the assessee was eligible for 100% deduction u/s 80IC of the Act or not and, therefore, since the issue already stood decided by the ITAT in favour of the assessee in view of the ITAT quashing the re-assessment proceedings completed u/s 147 of the Act, the Ld. Pr.CIT could not have again raked up this issue by passing an order u/s 263 of the Act. He also placed reliance on the numerous judicial precedents wherein it has been held that where an order passed by the AO is subject to an appeal that has been filed, the power of the Ld. Commissioner to invoke his revisional jurisdiction u/s 263 of the Act can only extend to such matters which have not been considered and decided in the appe....
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....ied out proper verification while passing the order u/s 147 of the Act and restricting the assessee's claim to 30% of the eligible profits. 5.0 We have heard the rival submissions and have also perused the material available on record. The main thrust of the assessee's arguments before us is that since the Coordinate Bench of the ITAT, vide order dated 14.06.2019, has in combined orders for assessment years 2010-11 and 2013-14 in ITA Nos.122 & 123/Chd/2019 held that the assessee was eligible for deduction u/s 80IC of the Act @ 100% in view of substantial expansion, an identical issue again could not have been raised by the Ld. Pr.CIT by invoking his powers u/s 263 of the Act as the order of the AO as well as the Ld.CIT(A) in 147 proceedings in subsequent appeal got merged with the order of the ITAT through its order dated 14.06.2019 and, thus, after this merger, since no new issue has been raised by the Ld. Pr.CIT, the revisionary jurisdiction could not have been invoked and the impugned order could not have been passed on 30.03.2021. The Ld. AR has placed on record various orders of the Tribunal in assessee's own case for assessment years 2010-11, 2011-12 and 2013-14 and the co....
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....ee filed an appeal against the disallowance. The Commissioner (Appeals) allowed the appeal. Subsequently the Commissioner, in exercise of powers under Section 263 of the Act, disallowed the claim under Section 80I of the Act on the ground that the assets used by the assessee in new industrial undertaking had formed part of old plant and machinery and the new industrial undertaking was formed by reconstruction or restructuring or splitting up of the old business. In such background, the Court held that the requirement of fulfillment of the conditions stipulated under subsection (2) of Section 80I of the Act were very much subject matter of the appeal in relation to the income which was disallowed by the Assessing Officer. On the ground of merger, the Court held that the Commissioner could not have exercised the revisional powers. The Hon'ble Gujarat High Court further held as under: "17. Thus, the Commissioner of Income-tax is entitled to revise an assessment order in so far as the order is erroneous and prejudicial to the interest of the Revenue, but Explanation (c) places an embargo on the Commissioner of Income-tax in case of subject-matter of any appeal which has be....