2022 (10) TMI 938 - AT - Income Tax

Revision u/s 263 by CIT - HELD THAT - It is known fact that the assessee preferred appeal against the consequential order passed by the AO u/s 143(3) r.w.s. 263 before CIT(A) and the CIT(A) after considering the submissions of the assessee has rightly allowed the appeal of the assessee on merit and legal grounds relying on the decision of the Tribunal in assessee s own case 2022 (6) TMI 350 - ITAT VISAKHAPATNAM Thus hold that the Ld.CIT(A) has rightly followed the decision of the Tribunal as the consequential order passed by the AO has no locus standi and allowed the appeal of the assessee. Therefore we are not inclined to interfere with the order passed by the Ld.CIT(A) and dismiss the appeal of the revenue.

Summary

Issues:
- Appeal against order of Commissioner of Income Tax
- Assessment under Section 143(3) of the Income Tax Act, 1961
- Reassessment under Section 263 of the Act
- Allowance of deduction under Section 80IB(11A)
- Appeal before the Tribunal against order of Principal Commissioner
- Consequential order passed by Assessing Officer under Section 143(3) r.w.s. 263
- Appeal before CIT(A) against consequential order
- Applicability of export entitlements and duty drawback under head "profits or gains from business or profession"
- Grounds of appeal raised by the revenue before the Tribunal
- Arguments presented by both parties before the Tribunal

Analysis:
The appeal before the Appellate Tribunal ITAT Visakhapatnam was filed by the revenue against the order of the Commissioner of Income Tax for the Assessment Year 2017-18. The case involved a domestic public company engaged in the export business of frozen shrimp products. The assessment under Section 143(3) of the Income Tax Act, 1961 was completed, but subsequently, a reassessment under Section 263 was initiated by the Principal Commissioner. The issue revolved around the deduction claimed under Section 80IB(11A) by the assessee, specifically concerning whether the income on which the deduction was claimed was derived from the business of an industrial undertaking. The Tribunal, in a previous order, relied on the decision of the Honorable Supreme Court in a similar case and held that export entitlements and duty drawback fall under the head "profits or gains from business or profession."

The revenue raised several grounds of appeal before the Tribunal, challenging the decision of the Commissioner of Income Tax (Appeals) and the reliance on the Tribunal's previous decision. The arguments put forth by the revenue emphasized the interpretation of relevant legal provisions and the applicability of the Supreme Court's decisions in similar cases. On the other hand, the assessee contended that the Tribunal correctly quashed the order of the Principal Commissioner and allowed the appeal in their favor. The assessee argued that the consequential order passed by the Assessing Officer was not valid in light of the Tribunal's decision.

After hearing both parties and examining the orders and submissions, the Tribunal upheld the decision of the Commissioner of Income Tax (Appeals) in favor of the assessee. The Tribunal found merit in the assessee's arguments and concluded that the Commissioner of Income Tax (Appeals) had rightly followed the Tribunal's decision, rendering the consequential order passed by the Assessing Officer irrelevant. Consequently, the appeal of the revenue was dismissed, and the order was pronounced in open court on 20th October 2022.