2018 (12) TMI 185 - AT - Income Tax

Revision u/s 263 - as per CIT-A AO had failed to take into account the conditions to be fulfilled by assessee before granting deduction u/s 80IB(11C) - Held that - Tribunal in assessee s own case in assessment year 2010-11 had taken note of the provisions of section 80IB(11C) of the Act and claim made by assessee as to whether it had fulfilled the conditions and it was held that the AO during assessment proceedings had verified the claim of assessee and had found that all the conditions were satisfied by the assessee, hence the order allowing deduction claimed by assessee under the said sub-section does not make the order prejudicial to the interest of Revenue. The Tribunal further held that exercise of revisionary powers by the Commissioner under section 263 of the Act was not warranted in the facts of case. The issue arising in the present appeal before us is also against exercise of revisionary powers by the Commissioner under section 263 on the same grounds as raised in assessment year 2010-11. Since the issue has been decided in favour of assessee and the order of Commissioner passed under section 263 of the Act in assessment year 2010-11 has been held to be both invalid and bad in law, following the same parity of reasoning, we hold that exercise of revisionary powers by the Commissioner under section 263 in assessment year 2012-13 do not survive. - Decided in favour of assessee.

Summary

Issues involved:
Appeal against order under section 263 of the Income-tax Act, 1961 for assessment year 2012-13.

Detailed Analysis:

1. Grounds of Appeal:
The appellant challenged the order under section 263, claiming it was not erroneous or prejudicial to revenue. The appellant argued that the AO properly verified the deduction claim under section 80IB(11C), and the PCIT erred in setting aside the assessment order without sufficient material.

2. Validity of PCIT's Actions:
The PCIT set aside the assessment order for assessment year 2010-11, finding errors in allowing the deduction under section 80IB(11C). The PCIT argued that the AO failed to verify eligibility conditions properly. The PCIT then applied the same reasoning to the assessment order for 2012-13, leading to the present appeal.

3. Tribunal's Decision:
The Tribunal reviewed the case and previous decisions related to the deduction claim under section 80IB(11C). In a prior case for assessment year 2010-11, the Tribunal found that the AO had correctly verified and allowed the deduction claim, leading to the order not being prejudicial to revenue. The Tribunal concluded that the PCIT's revisionary powers were not warranted in that case.

4. Decision on Appeal:
Following the precedent set in the assessment year 2010-11 case, where the PCIT's order under section 263 was deemed invalid, the Tribunal ruled in favor of the appellant for the assessment year 2012-13. The Tribunal held that the PCIT's exercise of revisionary powers was not valid, and the grounds of appeal raised by the appellant were allowed.

In conclusion, the Tribunal allowed the appeal, declaring the PCIT's order under section 263 for the assessment year 2012-13 as invalid and bad in law, following the decision made in a similar case for the assessment year 2010-11.