2022 (9) TMI 1512 - HC - Income Tax

Revision u/s 263 - disallowance of claim of deduction u/s 80IA - tribunal granted relief to assessee - HELD THAT - Tribunal has noted the factual contend namely with regard to the purchases which were undertaken by the respondent/assessee as also the terms and conditions of the agreement entered into by the assessee with the concerned highways department and having been factually satisfied that the deduction claimed by the assessee is admissible, had granted relief. More importantly the Tribunal had taken note of the fact that for the previous assessment years 2010-11 the learned Tribunal had adjudicated the issue and had granted relief for assessee and for the subsequent years 2013-14 and 2014-15 no disallowance has been made u/s 80IA . That apart the Tribunal has also taken note of various decisions of the Hon ble Supreme Court which had laid down the legal principle as to what and under what circumstances the Commissioner of Income Tax can exercise power under Section 263 of the Act. The revenue has not disputed before us that no disallowance was made in the previous two assessment years as well as the subsequent two assessment years. Thus in the absence of any distinguished feature in the nature of contract the Rule of Consistency has to be applied - No substantial question of law.

Summary

Issues:
1. Jurisdiction under Section 263 of the Income Tax Act, 1961.

Detailed Analysis:
The High Court of Calcutta heard an appeal filed by the revenue against an order passed in ITA No. 427/Kol/2018 for the assessment year 2012-13. The main issues raised were whether the Income Tax Appellate Tribunal erred in quashing the reversionary order under section 263 and deleting the addition made on the basis of disallowance of claim of deduction u/s 80IA of the Act. Additionally, it was questioned whether the Assessing Officer applied correct assumption of fact and law on the deduction issue, making the assessment order erroneous. The Court considered the arguments presented by both sides and examined the order and reasons given by the Tribunal. The Tribunal had considered the factual contentions related to purchases made by the assessee and the terms of the agreement with the highways department, concluding that the deduction claimed was admissible based on previous decisions and legal principles set by the Supreme Court regarding the Commissioner's power under Section 263.

The Court noted that no disallowance had been made in the previous and subsequent assessment years, and in the absence of any distinguishing features in the contract, the Rule of Consistency had to be applied. Consequently, the Court found no substantial questions of law arising for consideration in the appeal. Therefore, the appeal was dismissed, and the order passed in favor of the respondent was upheld.