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2012 (7) TMI 743 - AT - Income TaxAssumption of jurisdiction u/s 263 by CIT(A) - AO had not considered the fact that the assessee had paid lesser tax than it was obliged to do under MAT - Held that - Looking at the provisions of section 87 the rebate is to be granted from the amount of income tax chargeable on the total income of the assessee. The income tax is computed after arriving at the total income of the assessee and section 87 does not differentiate between the total income computed under the regular provisions of the Act or under section 115JB. Provision of sections 87 and 88A to 88E also apply after the total income is computed under section 115JB and since the assessee s total income includes the income from the taxable Securities Transactions, the assessee is entitled to a deduction of the amount equal to the STT paid by him in respect of the taxable Securities Transactions entered into in the course of business during the previous year - the tax liability as per MAT provisions was Rs.7,56,694 and rebate admissible under section 88E was Rs.26,98,260, therefore no prejudice was caused to the revenue by non-consideration of provisions of section 115JB by Assessing Officer - Once the assessment order is neither erroneous nor prejudicial to the interest of revenue, CIT has wrongly invoked the revision proceeding u/s. 263 - in favour of assessee.
Issues:
Appeal against order under section 263 of the Income Tax Act, 1961 for assessment year 2007-08. Analysis: The appeal was filed against the order of the Commissioner of Income Tax under section 263. The assessee raised grounds challenging the jurisdiction of the Commissioner in invoking powers under section 263. The issue revolved around the applicability of provisions of section 115JB of the Income Tax Act, 1961, and whether the assessment order was erroneous or prejudicial to the interest of revenue. The assessee argued that the order under section 263 was without jurisdiction, illegal, and void ab initio. The assessee's representative contended that the Assessing Officer had not considered the fact that the assessee had paid lesser tax than required under Minimum Alternate Tax (MAT). Reference was made to a decision by a coordinate Bench of the Tribunal in a similar case. It was argued that the issue regarding the rebate under section 88E was decided in favor of the assessee by the Karnataka High Court. The representative highlighted that the Commissioner did not demonstrate how the assessment order was erroneous or prejudicial to the interest of revenue. On the other hand, the Revenue representative supported the Commissioner's order under section 263. It was argued that as long as the issue of rebate under section 88E was sub judice, the Assessing Officer should have considered it in the assessment order. The Revenue contended that the Commissioner's order was passed because the assessment order was deemed erroneous and prejudicial to the interest of revenue. The Tribunal examined the facts and noted that the issue was identical to a previous case where the order under section 263 was quashed. The Tribunal referred to the decision of the coordinate Bench in the case of Ganeshyam Securities (Pvt.) Ltd. and held that the order passed by the Commissioner under section 263 was quashed. It was emphasized that since the rebate under section 88E was to be allowed, no prejudice was caused to the revenue by the non-consideration of provisions of section 115JB by the Assessing Officer. Consequently, the Tribunal allowed the appeal of the assessee, and the order under section 263 was quashed. In conclusion, the Tribunal allowed the appeal of the assessee, quashing the order passed under section 263. The decision was based on the precedent set by a coordinate Bench and the finding that no prejudice was caused to the revenue by the Assessing Officer's actions.
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