TaxTMI 
TaxTMI 
TaxTMI 
2024 (1) TMI 370
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....lecommunication and related support services including virtual private network, global management network and internet services to various customers within and outside India filed return of income on 07.10.2010, declaring its total income as nil on the basis of deduction of Rs.20,01,05,275/- under Section 80IA of the Act and book profit of Rs.5,33,99,601/-. On 23.11.2011, the respondent/assessee filed its revised return of income declaring total income of Rs.5,57,99,062/-, which was duly processed under Section 143(1) of the Act. 2.2 The return of income filed by the respondent/assessee having been selected for scrutiny, notice dated 26.08.2011 under Section 143(2) of the Act was served upon it. On 25.07.2012, reference under Section 92CA(1) of the Act was made to the Transfer Pricing Officer (the TPO), Mumbai to determine Arm's Length Price since the respondent/assessee had entered into international transaction with associated enterprises for an amount exceeding Rs. 15,00,00,000/-. On 30.01.2014, the TPO made upward adjustment to the Arm's Length Price by Rs. 2,23,16,22,270/- in relation to the said international transaction for assessment year 2010-11 under Section 92CA(3) of t....
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....ssed by the PCIT was that the respondent/assessee was denied the deduction amounting to Rs.20,01,05,275/- claimed in the AY in issue under Section 80IA of the Act. 6. We may note that Mr Deepak Chopra, learned counsel, who appears on behalf of the respondent/assessee, has drawn our attention to the fact that the respondent/assessee had been allowed the deduction under Section 80IA in the three preceding AYs, i.e., AY 2007-08, AY 2008-09 and AY 2009-10. 7. Mr Chopra says that insofar as AY 2007-08 was concerned, the respondent/assessee's Return of Income (ROI) was processed under Section 143(1) of the Act, while the ROI for AY 2008-09 and AY 2009-10 was subjected to scrutiny and the assessment orders were framed under Section 143(3) of the Act. 8. In sum, the contention of Mr Chopra is that the PCIT need not have taken a position which resulted in the appellant/revenue taking a U-turn with regard to the respondent/assessee's eligibility to claim deduction under 80IA of the Act. It is emphasised by Mr Chopra that the respondent/assessee's case is covered under Section 80IA(4)(ii) of the Act. 9. According to Mr Chopra, the respondent/assessee's business will fall under the....
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....ee, the revenue admittedly having allowed deductions under Section 80IA of the Act to the respondent/assessee in three preceding assessment years, there was no justification to take U-turn in fourth year, invoking the revisional jurisdiction. 5. It would be apposite to briefly traverse through the legal position qua scope of revisional jurisdiction under Section 263 of the Act. 5.1 In the case of Commissioner of Income Tax (Central) Ludhiana vs Max India Ltd., (2007) 15 SCC 401, the Supreme Court referred to its earlier judgment in the case of Malabar Industrial Company Limited vs CIT, (2002) 2 SCC 718 and reiterated that every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of revenue within the meaning of Section 263 of the Act; and that where the Income Tax Officer adopts one of the courses permissible in law and the same results in loss of revenue or where two views are possible and the Income Tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue, unless the view taken by the Income Tax Officer is not....
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....sis is ours] 5.3 In the case of CIT vs New Delhi Television Ltd., (2014) 220 Taxman 43, a coordinate bench of this court examined the provision under consideration herein and observed thus: "In paragraph 6 of the order dated 29th March, 2007, the Commissioner uses the expression "erroneous and prejudicial to the interest of revenue" but does not cite any reason or ground for the said conclusion. Use of the words without elucidation indicates, that the said observations are presumptive or a suspicion and mere repetition of words, but this does not satisfy the requirements under Section 263 of the Act. Order under Section 263 must be clear and must set out logical ground and reason as to why the assessment is erroneous and prejudicial to the interest of the revenue." [Emphasis is ours] 6. So far as the second issue confronting us in this appeal is concerned, the respondent/assessee has placed on record a copy of CBDT Circular No. 1/2016 dated 15.02.2016, which categorically clarifies that the expression "initial assessment year" used in Section 80IA(5) of the Act means the first year opted by the assessee for claiming deduction under Section 80IA of the Act in the manner tha....