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TMI Blog2014 (7) TMI 806X X X X Extracts X X X X X X X X Extracts X X X X ..... it cannot be said that the assessment is also prejudicial to the interests of Revenue. Relying upon Malabar Industrial Co. Ltd. Versus Commissioner of Income-Tax [2000 (2) TMI 10 - SUPREME Court] - the pre-requisite to the exercise of jurisdiction by the Commissioner suo motu under it, is that the order of the AO is erroneous in so far as it is prejudicial to the interests of the Revenue - Commissioner having not arrived at the conclusion that the assessment was not only erroneous but also prejudicial to the interests of the Revenue, the order of the CIT cannot be sustained – Decided in favour of Assessee. - ITA No. 1690/Hyd/12 - - - Dated:- 16-7-2014 - Shri B. Ramakotaiah And Smt. Asha Vijayaraghavan,JJ. For the Appellant : Sh ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s erroneous and prejudicial to the interests of Revenue. He accordingly invoked the provisions of S.263. In response to the show cause notice issued in that behalf, and in the course of proceedings before the Commissioner of Income-tax, assessee submitted that the export oriented unit of the assessee company (called BPO Division) is registered with the Software Technology Park of India, vide Approval No.STPH /MSC/98-99/108- 6656 dated 11th March, 1999. The BPO unit, it was submitted derived profit out of its export oriented activity and such, profits are eligible for exemption under S.10A of the Income-tax Act. The company, however, wrongly submitted its claim under S.10B instead of under S.10A and the audit report obtained was in Form 56G ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... levant portion of the decision of the Tribunal in the case of Iinfotech Enterprises limited and the CBDT Instruction F.No.178/19/2008-ITA01 dated 9.3.2009. The Commissioner of Income-tax found no merit in the contention of the assessee that claim for deduction under S.10B was by inadvertence and without any willful intent, observing that even for the preceding assessment year i.e. assessment year 2006-07, assessee had made claim for exemption under S.10B of the Act. The Commissioner of Income-tax also did not accept the fresh claim of the assessee during the revisional proceedings before him, for claim under alternate provision i.e. S.10A, observing that an assessee cannot make such a claim other than by filing a revised return, as held by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ial to the interests of the Revenue. The Commissioner of Income-tax was not convinced with the pleas of the assessee, and passed the impugned order directing the Assessing Officer to withdraw the relief granted under S.10B of the Act. It is the case of the Commissioner that the provisions of S.10A and 10B operate in different fields and cannot be equated, and since assessee has claimed relief under S.10B in earlier year as well, the mistake claimed by the assessee cannot be accepted to be an inadvertent one, and the alternate claim or fresh claim cannot be entertained, since no revised return has been filed by the assessee. It is not the case of the Commissioner of Income-tax that the assessee is not eligible for relief under S.10A of the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s eligible for exemption under section 10B of the Act. It is to be noted that the validity of an order under section 263 of the Act has to be tested with regard to the position of law as it exists on the date on which an order is passed by the CIT. In the case under consideration, it is clear that on the date, when the CIT passed his order under section 263 of the Act, the view taken by the Assessing Officer was in consonance with the view taken by the Tribunal in the case of Sudharani (supra). It is settled law that when two views are possible on the date of the order passed by the Commissioner, the CIT should agree with the view taken by the Assessing Officer which was in consonance with view taken by this Tribunal, even if there has been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ar as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent if the order of the Income-tax Officer is erroneous but is not prejudicial to the Revenue or if it is not erroneous but is prejudicial to the Revenue recourse cannot be had to S. 263(1) of the Act. In the facts of the present case, the Commissioner having not arrived at the conclusion that the assessment was not only erroneous but also prejudicial to the interests of the Revenue, the impugned order of the Commissioner of Income-tax cannot be sustained. We accor ..... X X X X Extracts X X X X X X X X Extracts X X X X
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