TaxTMI 
TaxTMI 
2023 (9) TMI 1080
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.... the learned PCIT has erred in invoking jurisdiction u/s 263 of the Income Tax Act, 1961 by holding that the order of the Learned Assessing Officer u/s 143(3) read with section 144B of the Income-tax dated 25.10.2021 is erroneous and prejudicial to the interest of revenue. The notice dated 17.03.2022 u/s 263 of the Act has been issued without complying with the provision of the Act and deserves to be quashed in toto. 3. On appreciation of the facts and circumstances of the case and interpretation of law the learned PCIT has erred in setting aside the order of the Learned Assessing Officer u/s 143(3) r.w.s. 144B dated 25.10.2021 and in directing the Learned Assessing Officer to frame the assessment order afresh. The order of the Learned PCIT u/s 263 of the Act is contrary to facts of the case and law and deserves to be deleted in toto. 4. On appreciation of facts and circumstances of the case the Learned PCIT has erred in dealing with issues that were not forming part of the notice dated 17.03.2022 issued u/s 263 of the Act. The order of the Learned PCIT u/s 263 of the Act is contrary to facts of the case and law and deserves to be deleted in toto. 5. The ....
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....206-17, & 2017-18, the deduction under section 80IA was disallowed on the basis of report of TPO on the view that boiler division cannot exist independently without manufacturing division, the Boiler division was not created for generating power but to supply steam to the manufacturing units and the asset acquired for so called unit of Boiler divisions are primarily meant for production of ink. The assessing officer proposed disallowance of deduction under section 80IA in the draft assessment order in his show cause notice. In response to show cause notice on the proposed additions in the draft assessment order, the assessee filed its reply dated 24.09.2021. In the reply the assessee stated that observation of TPO in earlier year were self-contradictory. The assessee stated that observation of assessing officer that boiler unit is not separate and independent unit but part of manufacturing unit is incorrect. The reply of assessee was not accepted and held that similar disallowances were made in assessment years 2015-16, 2016-17 and 2017-18 on account of sale of steam by Boiler undertaking to other division of assessees manufacturing units. The assessee disputed the disallowances in....
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....ue. 5. The Ld. CIT(A) recorded that he has gone through the reply submitted by assessee and international transaction and specified domestic transaction reported in Form No.3CEB. The assessee besides international transaction, reported specified domestic transaction of Rs. 47.78 crores. And as per Central Board of Direct Taxes (CBDT for short) Instruction No.3/2016 dated 10.03.2016, the Assessing Officer was duty bound to refer the matter international as well as specified domestic transaction to TPO. The CBDT instruction is binding on the assessing officer and he was bound to refer such issue to TPO. The Assessing Officer has not referred the specified domestic transaction to any scrutiny or examination by TPO, the assessment order passed by him is erroneous in nature. The CBDT's instruction is binding to Assessing Officer and plethora judgment is available on such position. The specified domestic transaction has a direct bearing that computation of income as specified domestic transaction has not been subject-matter of scrutiny. The Assessing Officer has disallowed the deduction under section 80IA of the Act without verifying it, which has a direct bearing of computation of in....
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....ine of business of assessee is to manufacture Ink and when steam was produced for manufacturing Ink steam was not a new product. Thus no undertaking is established and on the basis of such ALP was computed as nil. The Assessing Officer disallowed the entire deduction under section 80IA of the Act arising out of transfer steam of boiler division to manufacturer division and such decision was arrived by Assessing Officer on the basis of all material and consideration thereto, therefore the assessment order is not erroneous and in so far as prejudicial to the interest of Revenue. The Ld. AR for the assessee further submits that when two views are possible, on issue and the Assessing Officer adopted one of the possible views, exercising of revisional power on such view under section 263 of the Act is not justified. The Assessing Officer consciously took the decision that there was no SDT and he took a possible view and no reference was made. 8. The Ld. AR for the assessee further submits that reference of TPO is made with the approval of Ld. PCIT. The Ld. PCIT agreed with the proposal of Assessing Officer to make the reference with regard to TPO only with regard to International Tra....
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....ribed for completing the assessment expired without a valid reference having made to TPO, the Assessing Officer to make conscious decision and thereafter is not empowered to make a reference to the TPO as per the provision of section 153(1) r.w.s first proviso thereto the assessment should have been completed within a period of eighteen months from the end of relevant assessment year. Further, section 153(4) prescribed that where a reference under sub-section (1) of section 92CA is made during the course of assessment proceedings, the period available for completion of assessment under sub-clause (1), (2)(3) shall be extended by twelve months only. Therefore, to avail the extended period of completion the reference to TPO shall be made within a time of completion of assessment on or before 30.09.2020. The time limit available to the Assessing Officer for making reference of SDT to TPO under section 92CA for assessment year 2018-19 has already been expired on 30.09.2020. Thus, the revisional power under section 263 cannot be invoked to extend the period of such limitation. To support such submission, Ld. AR for the assessee relied upon the decision of Hon'ble Madras High Court i....
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....rder, and the submission of Ld. AR for the assessee is that Assessing Officer disallowed entire deduction under section 80IA of the Act. The Ld. CIT-DR for the Revenue submits that Assessing Officer was not supposed to take a decision on the technical issue and determined the ALP for International Transaction, which is beyond his jurisdictional power. Thus, the assessment order is erroneous and so far as prejudicial to the interest of revenue. The assessee reported SDT of more than Rs. 47.00 crore and the assessing office disallowed deduction to the limit of claim under section 80IA. Admittedly there is no discussion about other / remaining domestic transaction of more than Rs. 24.00 Crore, which clearly established that the assessment order is prejudicial to the interest of revenue. The ld CIT-DR for the revenue prayed for upholding the order of ld PCIT. To support his submission, the ld CIT-DR for the revenue relied on the following decisions; • Adani Agro (P) Limited (2013) 32 taxmann.com 356 (Guj), • Malabar Industries Co Ltd. Vs CIT 243 ITR 83 SC/109 Taxman 66 SC, • Add CIT Vs Mukur Corporation (1978) 111 ITR 312 (Guj), • Den....