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2019 (1) TMI 95 - AT - Income TaxRevision u/s 263 - allowability of deduction u/s. 80IA - Held that - No occasion for the ld. CIT to exercise jurisdiction u/s. 263. See CONTAINER CORPORATION OF INDIA LTD. VERSUS ASSISTANT COMMISSIONER OF INCOME-TAX 2012 (5) TMI 260 - DELHI HIGH COURT . The communication issued on behalf of the Ministry of Commerce and Industry confirming that the ICDs are Inland Ports, fortifies the claim of the respondent herein. Though both the Notification and communication are not binding on CBDT to decide whether ICDs can be termed as Inland Ports within the meaning of Section 80-IA, the appellant herein is unable to put forward any reasonable explanation as to why these notifications and communication should not be relied to hold ICDs as Inland Ports. Unless shown otherwise, it cannot be held that the term Inland Ports is used differently under Section 80-IA. All these facts taken together clear the position beyond any doubt that the ICDs are Inland Ports and subject to the provisions of the Section and deduction can be claimed for the income earned out of these Depots. However, the actual computation is to be made in accordance with the different Notifications issued by the Customs department with regard to different ICDs located at different places. The issue on merits is now squarely covered in favour of the assessee in 2018 (5) TMI 359 - SUPREME COURT OF INDIA . Accordingly, in view of the aforesaid precedent, we quash this order passed u/s. 263 by the ld. CIT. Assessee s appeal stands allowed.
Issues Involved:
1. Jurisdiction under Section 263 of the Income Tax Act. 2. Disallowance of deduction under Section 80IA. 3. Levy of penal interest. Detailed Analysis: 1. Jurisdiction under Section 263 of the Income Tax Act: The appellant contended that the Principal Commissioner of Income Tax (Pr.CIT) erred in assuming jurisdiction under Section 263. The original order under Section 143(3) was passed by the Assessing Officer (A.O.) with due application of mind, and it was neither erroneous nor prejudicial to the interest of the Revenue. The appellant argued that the jurisdiction under Section 263 cannot be acquired merely on the basis of a change of opinion or on two views. The appellant had furnished all particulars pertaining to its justified claim under Section 80IA during the original scrutiny assessment proceedings, and the A.O. had taken a view after the application of mind. Therefore, the order under Section 263 should be vacated. The Tribunal noted that there was a delay of 214 days in filing the appeal, which was attributed to the wrong advice given by the appellant’s consultant. The Tribunal condoned the delay in the substantial interest of justice, citing that the appellant should not suffer due to the consultant’s incorrect advice. The Tribunal found that the issue involved was squarely covered in the appellant’s favor by the decision of the Special Bench of the Tribunal and the Hon’ble jurisdictional High Court. Hence, there was no occasion for the Pr.CIT to exercise jurisdiction under Section 263. 2. Disallowance of Deduction under Section 80IA: The Pr.CIT directed the A.O. to disallow the deduction under Section 80IA amounting to ?3,60,15,452/- without appreciating that the appellant had complied with the eligible norms for its claim, which was also settled by judicial rulings. The Tribunal noted that the A.O. had allowed the deduction towards receipts from the operation of Container Freight Station (CFS) without verifying the allowability of such deduction. The Pr.CIT found this error to be prejudicial to the interest of the revenue and noted that the A.O. had accepted the claim in a casual manner without due verification. The Pr.CIT also highlighted that the department had issued a clarification stating that ICDs and CFSs are not ports for the purpose of Section 80IA and that the decisions relied upon by the appellant were not accepted, with appeals pending. The Tribunal referred to the Hon’ble Apex Court's decision in the case of CIT vs. Container Corporation of India Ltd., which clarified that ICDs could be considered as inland ports for the purpose of Section 80IA. The Tribunal found that the issue on merits was squarely covered in favor of the appellant, and thus, the order passed under Section 263 by the Pr.CIT was quashed. 3. Levy of Penal Interest: The appellant denied its liability to penal interest on merits. However, the Tribunal did not delve into the details of this issue, as the primary focus was on the jurisdiction under Section 263 and the disallowance of deduction under Section 80IA. Conclusion: The Tribunal allowed the appellant’s appeal, quashing the order passed under Section 263 by the Pr.CIT. The Tribunal found that the issue on merits was covered in favor of the appellant by the decision of the Hon’ble Apex Court, and there was no occasion for the Pr.CIT to exercise jurisdiction under Section 263. The delay in filing the appeal was condoned in the interest of justice.
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