TaxTMI 
TaxTMI 
2022 (4) TMI 1596
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....he present case, ld. AO has passed the reasoned assessment order after analyzing all details and therefore there was no error in the impugned assessment order so as to justify action u/s.263 of the Act. Under the circumstances, the very assumption of power u/s.263 of the Act is unjustified and bad in law and therefore, order u/s.263 of the Act deserved to be quashed. 3. The subject order u/s. 263 passed by Id. PCIT is illegal and bad in law in absence of any finding of Id. PCIT how the alleged error of AO has resulted in to loss of revenue particularly when deduction u/s. 10AA of the Act is otherwise allowable in substance, filing of wrong form is merely a technical error and Form 56F has also since been filed. 4. The ld. PCIT has further erred in law in not coming to any concrete conclusion and without conducting any inquiry or investigating the issue, merely directed the AO to frame the assessment order afresh. Without there being any positive finding about order being erroneous and prejudicial to the interest of the revenue, the action of ld. PCIT is without jurisdiction and illegal and hence deserves to be deleted. 5. Ld. PCIT has erred in not considering various facts....
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....nstead of form 56F was a bonafide inadvertent mistake on part of the chartered accountant of the assessee. However, the same should not be construed as an action prejudicial to the interest of the Revenue. The conditions behind the claim of deduction u/s. 10AA of the Act have been duly fulfilled by the assessee company. The assessee should not be deprived of benefit u/s. 10AA of the Act owing to procedural lapse of filing incorrect form 56G instead of 56F at the time of the assessment proceedings. 5. The ld. Pr. CIT however rejected the submissions of the assessee by holding as under:- "6. The submission of the assessee has been perused. It is an admitted position that the assessee was required to file Form No. 56F along with Audit report in order to claim deduction under section 10AA of the Act for A.Y. 2013-14. The assessee submitted form no. 56G at the time of assessment proceedings. The AO failed to take notice of the above procedural lapse and allowed the claim in flagrant violation of the stipulated condition. AO should have called for the correct declaration and should have verified the same at the time of assessment proceedings. The assessing officer did not verify the e....
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.... original assessment, the ld. A.O. called upon the assessee to furnish details in respect of claim of exemption u/s. 10AA of the Act. The assessee furnished details in relation to claim u/s. 10AA along with form 56G vide letter dated 05-08-2015 and gave further explanation in relation to claim u/s. 10AA vide letter dated 15-12-2016. The ld. A.O. after considering the details filed by the assessee chose not to disturb the claim of exemption u/s. 10AA of the Act while framing assessment u/s. 143(3) vide order dated 30-11-2016. The ld. counsel for the assessee submitted that filing of form 56F at the "revision stage" is sufficient compliance of the procedural aspect and hence exemption u/s. 10AA of the Act cannot be disturbed. He submitted that filing of form 56B instead of form 56F was a procedural lapse which was duly corrected during the course of proceeding u/s. 263 before Pr. CIT. The ld. Pr. CIT in the instant case failed to appreciate that for the purpose of invoking revisionary jurisdiction, it is essential that both the conditions u/s. 263 of the Act viz. that the A.O's order must be erroneous and prejudicial to the interest of the Revenue, must be satisfied. The issue of cla....
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....empted. Consequently, for the reasons given by us, we agree with the conclusions reached by the impugned judgments of the Division Bench and the Full Bench." 7.2 In IPCA Laboratory Ltd. v. Dy. CIT [2004] 12 SCC 7421 the Supreme Court in the said judgment observed that section 80HHC has been incorporated with a view to provide incentive to export houses and this section must receive liberal interpretation. In Bajaj Tempo Ltd. v. CIT [1992] 3 SCC 78, the Supreme Court while interpreting section 15C of the Income-tax Act, 1922 observed that the section, read as a whole, was a provision, directed towards encouraging industrialization by permitting an assessee setting up a new undertaking to claim benefit of not paying tax to certain extent on the capital employed. Though in the case of Ramnath & Co v. CIT [2020] 116 Taxmann.com 885/272 Taxman 275 (SC), the Supreme Court held that the 'Beneficial Provision' ought to be interpreted strictly and that the burden of proving the applicability rests on the assessee, and in case of ambiguity the benefits cannot be claimed by the assessee, rather it would be interpreted in favour of the Revenue, however, in our view in the instant cas....
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....t. In the case of ITO v. Accentia Technologies 52 taxmann.com 89 (Mum), the Mumbai Tribunal held that deduction under section 10A cannot be denied merely because at time of filing of return, claim had mistakenly been made under section 10B of the Act. The Gujarat High Court in the case of Zenith Processing Mills v CIT 219 ITR 721 (Guj) held that provision of section 80J(6A) to extent it requires furnishing of auditor's report in prescribed form along with return, is directory in nature and not mandatory. Further, assessee can be permitted to produce such report at later stage when question of disallowance arises during course of assessment proceedings. In the instant case, the ld. Pr. CIT has not disputed that the issue for claiming deduction u/s. 10AA of the Act has been discussed with the assessee during the course of assessment proceeding. The ld. Pr. CIT has also not disputed the fact that this is the second year for claiming deduction u/s. 10AA of the Act by the assessee and that the Pr. CIT has not challenged that the assessee has not fulfilled the conditions eligible for claiming deduction. The ld. Pr. CIT has initiated 263 proceeding only on account of an inadvertent er....