2023 (6) TMI 1168 - AT - Income Tax

Revision u/s 263 by CIT - denial of claim of deduction u/s 80IC in respect of exchange rate fluctuation income, interest income and insurance claim - HELD THAT - As we find that the impugned order passed under section 263 of the Act by learned PCIT is dated 15.03.2017. Certainly, the giving effect order to section 263 of the Act should have been passed by learned Assessing Officer by this time. DR before us was not able to provide any details with regard to the fact as to what happened in the giving effect proceedings. The assessee also was not present to explain the status of giving effect proceedings. Hence, in absence of details of the giving effect proceedings before us, we deem it fit and appropriate, in the interest of justice and fair play to modify the revision order passed by learned PCIT by simply setting aside the assessment order dated 20.01.2015, instead of cancelling the same. Assessing Officer is directed only to examine afresh the eligibility of claim of deduction under section 80IC of the Act in respect of the aforesaid three receipts, uninfluenced by earlier decisions taken by him, if any. The order passed by learned PCIT under section 263 of the Act is modified. Decided partly in favour of assessee for statistical purposes.

Summary

Issues:
The appeal against the order passed by the Principal Commissioner of Income Tax under section 263 of the Income-tax Act, 1961 for the assessment year 2012-13.

Issue 1 - Revisional Jurisdiction under Section 263 of the Act:
The main issue in the appeal was whether the Principal Commissioner of Income Tax (PCIT) was justified in invoking revisional jurisdiction under section 263 of the Act to cancel the assessment order framed by the Assessing Officer and direct the denial of deduction under section 80IC of the Act for exchange rate fluctuation income, interest income, and insurance claim. The assessee, engaged in manufacturing auto components, claimed a 100% deduction under section 80IC of the Act for the second year. The PCIT found the earlier assessment order erroneous and prejudicial to the revenue's interest due to the grant of deductions for the mentioned incomes. The assessee provided explanations for each income category, asserting their eligibility for deduction under section 80IC.

Issue 2 - Modification of Revision Order:
The Tribunal noted that the PCIT's order was dated 15.03.2017, and the Assessing Officer should have passed a giving effect order by that time. However, details regarding the giving effect proceedings were not provided during the appeal hearing. In the absence of such details, the Tribunal modified the PCIT's revision order by setting aside the assessment order dated 20.01.2015 instead of canceling it. The Assessing Officer was directed to re-examine the eligibility of the deduction under section 80IC for the three mentioned receipts without being influenced by previous decisions.

In conclusion, the Tribunal partially allowed the appeal for statistical purposes, modifying the PCIT's order under section 263 of the Act. The Assessing Officer was directed to reassess the eligibility of the deduction under section 80IC without being influenced by prior decisions.