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TMI Blog2011 (12) TMI 102X X X X Extracts X X X X X X X X Extracts X X X X ..... 63 of the Income Tax Act. 2. After hearing counsel for the parties the following substantial question of law is framed:- "Whether the Income Tax Appellate Tribunal was right in law in quashing the order under Section 263 of the Income Tax Act, 1961?" 3. With the consent of the counsels, the appeal is taken up for hearing and disposal. 4. The respondent is a company and for the assessment year in question had filed its return of income on 25.10.2005 declaring income of Rs. 4,42,56,640/-. The case was taken up for scrutiny and vide regular assessment order under Section 143(3) dated 27.11.2008 income was determined at Rs.4,42,66,940/-. Addition of Rs.10,300/- was made on the ground that the fee paid to the Registrar of Companies for incre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Investment Ltd. v. CIT, New Delhi in ITA No.687/2009 dated 18.11.2011. However, in the said decision it has been observed that direct and indirect expenses have to be disallowed under Section 14A, when an assessee earns exempt income. In the present case no disallowance was made under Section 14A. In these circumstances, the CIT was justified in invoking supervisory jurisdiction under Section 263 of the Act. The said jurisdiction can be invoked when two conditions are satisfied. If the order by the Assessing Officer is erroneous and prejudicial to the interests of the revenue. An order is erroneous, when the Assessing Officer does not correctly apply a provision or does not make enquiries which are required. When the order passed is contrar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hese circumstances, counsel for the respondent-assessee states that the Assessing Officer should pass a fresh order in terms of the directions given by this Court and as this Court has set aside the order of the Tribunal. Learned counsel for the revenue in view of the facts stated by the respondent-assessee states that he has no objection in case the Assessing Officer is directed to pass a fresh order. In view of the statements, which are taken on record, it is directed that the Assessing Officer will pass a fresh order.
11. Accordingly the question of law is answered in negative and against the Assessee and in favour of the Revenue but subject to the directions/observations made above. The appeal is disposed of. X X X X Extracts X X X X X X X X Extracts X X X X
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