AI Drafter 
TaxTMI 
TaxTMI 
2022 (8) TMI 1271
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....t year 2014-15. 2.0 The brief facts of the case are that the assessee is into the business of manufacturing activities in Himachal Pradesh and the first year of the manufacturing activity was Assessment Year 2013-14, wherein deduction u/s 80IC of the Act had been claimed and allowed by the Assessing officer by way of order u/s 143(3) vide order dated 16.11.2015. 2.1 Subsequently, the Ld. PCIT issued a show cause notice in terms of section 263 of the Act dated 05.03.2019 alleging that the claim of deduction u/s 80IC of the Act had been allowed by the AO on a wrong appreciation of facts as the area in which the manufacturing unit was located did not fall in the area notified by the CBDT for the purpose of claiming deduction u/s 80IC of ....
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....rs, the deduction u/s 80IC stands allowed, the same could not have been subject matter of denial in the subsequent assessment years as per binding judgment of Hon'ble Punjab & Haryana High Court in the case of M/s Micro Instrument and other High Courts. 4. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 3.0 The Ld. AR submitted that during the course of assessment proceedings, the Assessing Officer had issued a questionnaire, dated 21.06. 2016 and as per Question No.17, the assessee was asked about the claim under chapter XVIA with the documentary evidences and to which a detailed reply was submitted before the Assessing Officer by the assessee. Our at....
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.... Mills [2008] 296 ITR 238 (P&H) and a further reference has also been made to the order of Chandigarh Bench of the ITAT in the case of Surinder Pal Singh reported in [2022] 94 ITR (Trib) 458 (Chd). 3.3 On the allegation of non-application of mind, it was submitted that in Assessment Year 2013-14 the claim u/s 80IC had been first made and referring to the Assessment Order passed u/s 143(3) of the Act for that year, our attention was drawn to the following observations of the AO: "During the relevant assessment year the assessee was engaged in the business of Manufacturing of MS Shuttering Plates, Scaffoldings, Fencing Poles and Water Tanks. The gross turnover from the business during the year of Rs. 1,31,53,937/- and books of acc....
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....sessment proceedings, the assessee has furnished certain details and documents in support of his claim of deduction u/s 80IC of the Income Tax Act, 1961. On verification of details and information furnished by the assessee, it is found that there is no change in manufacturing activities. After verification and examination of the case, it is found that the assessee fulfills, the conditions as prescribed u/s 80IC of the Income Tax Act, 1961." 3.5 Thus, it was submitted that the Assessing Officer has examined the past history of the case and also for the current year and that he has made requisite enquiries and has then come to the conclusion about allowance of deduction u/s 80IC and thus, the assumption of jurisdiction u/s 263 was not warr....
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....n' and, as such, this argument of the assessee is not tenable and, as such, there was no application of mind by the Assessing Officer, as well. 5.0 In rejoinder, it was argued by the Ld. AR that the Unit is not engaged in the manufacturing of article or thing as specified in XIIIth Schedule and that the Unit fulfills all the conditions for claim u/s 80IC and for the purpose of 263, there has to be independent opinion of the Ld. PCIT only and if there is no such independent opinion of the Ld. PCIT, then, the proceedings u/s 263 deserve to be quashed, as in the present case it is very much clear that there was an 'audit objection' which has led to the issuance of notice u/s 263. 6.0 We have given our utmost consideration to the rival co....
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....hether satisfaction of the Commissioner of Income-tax for exercising jurisdiction was called or has to be decided having regard to a given fact situation." 6.11 We, therefore, by respectfully following the ratio laid down by the Hon'ble jurisdictional High Court in the aforesaid referred to case as well, are of the view that the learned Principal Commissioner of Income-tax was not justified in exercising his power to invoke the provision of section 263 of the Act on the basis of audit objection raised by the Audit Wing of the Department. We also note that the above said judgment of the Hon'ble High Court has been followed by the Chandigarh Bench of the ITAT later on in the case of Kirti Anand v. CIT in ITA No. 540/Chd/2013, Paramji....