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TMI Blog2012 (11) TMI 332X X X X Extracts X X X X X X X X Extracts X X X X ..... 1 setting aside the assessment order u/s 143(3) dated 29.12.2008 for making it afresh. 2. That on the facts and in the circumstances of the case, the assessment order u/s 143(3) dated 29.12.2008 was neither erroneous nor prejudicial to the interest of revenue and hence, the order of the CIT u/s 263 is bad in law and deserves to be quashed. 3. That the Ld. CIT while passing the order u/s 263 has grossly erred in stating that the assessment order is erroneous and prejudicial to the interest of revenue on the issue of allowability of rebate u/s 88E, tax payable u/s 115JB and disallowance u/s 14A of the Income-tax Act, 1961. 3. The appellant craves leave to add, to alter, or amend any grounds of the appeal raised above at the time of hearing ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... en made in accordance with the provisions of Rule 8D of the Income-tax Rules, 1962. The learned AR submitted that the rebate u/s 80E of the Income-tax Act was never a debatable issue. The return of income prescribed by the Rules which has force of law provides in Part B-TTI for computation of tax liability on total income. As per this, the rebate under section 80E is allowable. Balance tax payable has to be worked out only after reducing the rebate u/s 88E of the Income-tax Act. Therefore, the order of Assessing Officer was neither erroneous nor prejudicial to the interest of revenue on this count. Various Benches of ITAT had accepted this in its decisions. The other issue on which the CIT invoked the provisions of section 263 of Income-ta ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his point of view on the sustainable possible view taken by Assessing Officer by invoking and passing an order u/s 263 of the Act. The Assessing Officer's view is not unsustainable view in law. Learned AR also relied on the decision of Hon'ble Supreme Court in the case of Malabar Industries Co. Ltd. vs. CIT - 243 ITR 83. 4. Learned DR relied on the order of the CIT and pleaded to sustain the same. 5. We have heard both the sides on the issue. The CIT initiated the proceedings u/s 263 on three counts - (i) relief to the rebate u/s 88E which was claimed and allowed; (ii) tax payable u/s 115JB not charged separately without giving rebate under section 88E; and (iii) not making disallowance as per the provisions Rule 8D of the IT Rules r.w.s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... his return provides about the computation of tax liability on total income. It also provides for tax payable on the deemed income u/s 115JB. The computation of tax liability column as provided in the return of income are as under :- Part B - TTI Computation of tax liability on total income Computation of tax liability 1 Tax Payable on deemed total income under section 115JB (7 of Schedule MAT) 1 0 2 Tax payable on total income a Tax at normal rates 2a 0 b Tax at special rates (11 of Schedule - SI) 2b 0 c Tax payable on Total Income (2a + 2b) 2c 0 3 Gross tax payable (higher of 2c and 1) 3 0 4 Credit under section 115JAA of tax paid in e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ax payable on the deemed total income u/s 115JB after providing rebate u/s 88E. Therefore, the view taken by the Assessing Officer was a possible view sustainable in law. Thus, in our considered view, the order passed by Assessing Officer was neither erroneous nor prejudicial to the interest of revenue on this count. 6. The other issue on which the CIT invoked the provisions of section 263 is not disallowing u/s 14A read with Rule 8D. The assessee himself has disallowed expenses of Rs.3,000/- of peons, conveyance, postage, etc. The Assessing Officer accepted the quantum of disallowance. CIT takes a view that the disallowances should be as per Rule 8D. Various Courts had held that the provisions of Rule 8D cannot be invoked retrospectively ..... X X X X Extracts X X X X X X X X Extracts X X X X
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