2013 (5) TMI 584 - AT - Income Tax

Jurisdiction power u/s 263 by CIT(A)- initiating the impugned revision proceedings - Re opening of assessment - disallowance of claim of deduction u/s 80IB as the assessee is not engaged in manufacture or production of articles or things while it is only engaged in processing of milk - Held that - There may not be any dispute that the revision proceeding shall not lie on the issues on which the AO has taken a plausible view after examining and applying his mind on it. In the instant case, notice that AO has re-opened the impugned assessments for the purpose of examining the eligibility of the assessee to claim deduction under section 80IB to which assessee has given a detailed reply demonstrating its eligibility and it has also drawn support from the decision of Sumaraj Seafoods Pvt. Ltd. (2007 (6) TMI 302 - ITAT MUMBAI). As AO has passed a speaking order by duly extracting the reasons recorded for re- opening, the reply given by the assessee, the relevant observations made by the Mumbai bench of the Tribunal in the case referred supra there is proper application of mind on the part of the AO and further the view taken by him is one of the possible views, since it is in accordance with the decision rendered by the Tribunal. It is now well settled proposition of law that merely because the CIT is having a different view, the same would not entitle him to initiate revision proceedings, if the view taken by the assessing officer is one of the possible views. Thus CIT was not right in initiating the impugned revision proceedings. In favour of assessee.

Summary

Issues:
Challenging orders passed by CIT u/s 263 of the Income-tax Act regarding deduction u/s 80IB for chilling plant operations.

Analysis:
The appeals were filed by assessees challenging the orders passed by CIT u/s 263 of the Income-tax Act regarding deduction u/s 80IB for chilling plant operations. The appeals were heard together and disposed of by a common order. The assessees claimed deduction u/s 80IB for income related to the chilling plant, considering it as a cold storage. The assessing officer reopened the assessments to examine the eligibility of the assessees for the deduction. The assessees argued that they were entitled to the deduction as a small-scale industrial undertaking operating a cold storage plant. The assessing officer accepted their eligibility after detailed examination and considering relevant case law. The assessees had been claiming the deduction since 1994-95, and the CIT initiated proceedings only from 2003-04 onwards. The assessees contended that the CIT was not correct in directing the assessing officer to withdraw the deduction for specific assessment years when it had been allowed in earlier years.

The Departmental Representative argued that the chilling plant was part of the business activity, whereas the statute required the operation of a cold storage to be a distinct and independent unit. The ITAT discussed the legal position of revision proceedings under section 263 of the Act, citing the scope and interpretation by the Hon'ble Bombay High Court. The ITAT emphasized that revision proceedings should not be initiated if the assessing officer had taken a plausible view after proper examination. In this case, the assessing officer had reopened assessments to examine the deduction eligibility, and after considering the assessees' arguments and relevant case law, he allowed the deduction. The ITAT concluded that the CIT was not justified in initiating the revision proceedings as the assessing officer's view was one of the possible views and in accordance with the Tribunal's decision.

The ITAT held that the CIT's different view did not warrant the initiation of revision proceedings, and therefore, set aside the orders passed by the CIT. Consequently, all the appeals of the assessees were allowed, pronouncing the decision on 13.05.2013.