2020 (1) TMI 1573 - HC - Income Tax

Revision u/s 263 by CIT - claim of deduction under Section 80IA - HELD THAT - It is evident from the records that though the appellant has raised the issue of jurisdiction of the Commissioner, under Section 263 to initiate suo motu revision especially when an appeal against Assessment Order has been filed and heard and order has been passed by the Appellate Commissioner and though the Tribunal went into the merits of the case, it has not decided about the jurisdiction. The jurisdiction point is an important point to decide the matter and therefore, the order passed by the Tribunal is set aside and the matter is remanded to the Tribunal to decide about the jurisdiction. The above substantial questions of law are answered accordingly.

Summary

Issues Involved:
1. Jurisdiction of the Principal Commissioner of Income Tax under Section 263 of the Income Tax Act, 1961.
2. Violation of the 'doctrine of merger' by the Principal Commissioner of Income Tax.
3. Excess deduction allowed under Section 80IA of the Act.

Analysis:

Issue 1: Jurisdiction of the Principal Commissioner of Income Tax under Section 263
The Appellant company, engaged in providing and maintaining industrial complexes, declared total income for the Assessment years 2013-14. The assessment order was set aside with a direction to redo the assessment. The Appellate Tribunal dismissed the Appeal, challenging the assessment. The High Court admitted the Appeal on substantial questions of law regarding the jurisdiction of the Principal Commissioner of Income Tax under Section 263. The Court noted that the Tribunal did not decide on the jurisdiction issue, which is crucial. Consequently, the Court set aside the Tribunal's order and remanded the matter for a decision on jurisdiction. The Appeal was allowed with this direction.

Issue 2: Violation of the 'Doctrine of Merger'
The substantial question of law raised whether the Principal Commissioner of Income Tax exceeded jurisdiction by revising the Assessing Officer's order, which was already subject to appeal before the Commissioner of Income Tax (Appeals). The Court observed that the Tribunal did not address this issue. The Court emphasized the importance of determining jurisdiction and remanded the matter to the Tribunal for a decision on this crucial point.

Issue 3: Excess Deduction under Section 80IA of the Act
The Appellate Tribunal was questioned for holding that the Assessing Officer erroneously allowed excess deduction under Section 80IA of the Act. However, the Court's focus was on the jurisdictional aspect, and the matter was remanded for a decision on jurisdiction, without delving into the specifics of the deduction issue.

In conclusion, the High Court's judgment primarily revolves around the jurisdictional aspect concerning the Principal Commissioner of Income Tax under Section 263 of the Income Tax Act. The Court emphasized the need for a decision on jurisdiction, setting aside the Tribunal's order and remanding the matter for further consideration.