2011 (1) TMI 1392 - AT - Income Tax

Summary

Issues involved: Validity of initiation of revision proceedings u/s 263 of the Income Tax Act regarding exemption u/s 10(10C) and the bar of limitation.

Validity of initiation of revision proceedings u/s 263:
The appeal was filed by the assessee against the CIT's order questioning the initiation of revision proceedings u/s 263 of the Income Tax Act, specifically related to the allowance of claim u/s 10(10C). The assessee contended that the revision proceedings were time-barred as the issue had attained finality on the date of intimation u/s 143(1) of the Income Tax Act.

Judgment: The Tribunal referred to a similar case where the CIT's order was set aside under identical circumstances, emphasizing the need for the CIT's order to be considered "erroneous in so far as it is prejudicial to the interests of the Revenue." It was highlighted that the Assessing Officer's view must be plausible and sustainable in law, and in this case, the Assessing Officer had compared the facts with a relevant case and allowed the claim of the assessee. Therefore, the Tribunal concluded that the initiation of proceedings u/s 263 was not justified and set aside the CIT's order.

Bar of limitation:
The assessee challenged the initiation of revision proceedings on the ground of being time-barred, asserting that the issue had already attained finality on the date of intimation u/s 143(1) of the Income Tax Act.

Judgment: The Tribunal, after careful consideration, found that the initiation of revision proceedings was not warranted as the Assessing Officer had taken a plausible view based on existing facts and legal provisions. The Tribunal emphasized that the subsequent letter issued by CBDT could not be the basis for terming the assessment orders as erroneous and prejudicial to the revenue. Therefore, the Tribunal allowed the appeal of the assessee, setting aside the CIT's order u/s 263 of the Act.

In conclusion, the Tribunal ruled in favor of the assessee, setting aside the CIT's order u/s 263 of the Income Tax Act based on the grounds that the initiation of revision proceedings was not justified and the bar of limitation was not applicable in this case.