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TMI Blog2016 (4) TMI 961X X X X Extracts X X X X X X X X Extracts X X X X ..... tracted from ITA No.475 of 2015. 2. ITA No.475 of 2015 has been preferred by the appellant-assessee under Section 260A of the Income Tax Act, 1961 (in short, the Act ) against the order dated 3.8.2015, Annexure A.3 passed by the Income Tax Appellate Tribunal, Division Bench, Chandigarh (in short, the Tribunal ) in ITA No.679/CHD/2013, for the assessment year 2009-10, claiming following substantial questions of law:- A. Whether the requirement of sub section (2) of section 263 that no order shall be made under sub section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed simply mean passing of the order and keeping it in the file ? B. Whether the requirement of passing/making the order within the period of limitation means effectively passing/making the order so as to be beyond the control of the authority, for any possible change or modification therein ? C. Whether on the facts and circumstances of the case and in law, the Tribunal was right in law in holding that order under section 263 was passed on 20.3.2013 though the same was dispatched on 4.4.2013 i.e. after the limitation which expi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sh book as on 25.7.2008 and thereafter utilised in the business of manufacturing and on the income thereof, deduction under section 80IB of the Act was claimed as per the provisions of law. Return of income for the assessment year in question was filed declaring income of ₹ 7,02,02,910/-. Notice for scrutiny of assessment was issued to the appellant. The appellant appeared and its accounts were checked. Addition of ₹ 80,529/- was made under section 80IB of the Act on account of DEPB receipts of ₹ 2,68,430/- after scrutiny. The assessment was completed by the Assessing Officer under section 143 (3) of the Act on 29.10.2010, Annexure A.1. On 14.11.2012, notice was issued by the Commissioner of Income Tax, Ludhiana (CIT) under section 263 of the Act wherein it was observed that the assessee had been allowed deduction under section 80IB of the Act on various items. The appellant filed objections vide reply dated nil Annexure A.5 stating that the judgment in the case of M/s Friends Castings was not applicable to it since the assessment was made on 29.10.2010 when the impugned judgment was not available. On the basis of subsequent judgment, the assessment could not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... under Section 263 of the Act. Relying upon judgment of the Apex Court in Malabar Industrial Co. Limited vs. Commissioner of Income Tax , (2000) 243 ITR 83, initiation of proceedings under section 263 of the Act were assailed. 6. On perusal of the findings recorded by the Tribunal and after hearing learned counsel for the appellant, we find that the order under section 263 of the Act was required to be passed within two years from the end of the financial year in which the order sought to be revised was passed. It has been categorically recorded by the Tribunal that the order under section 263 of the Act in the case of the assessee was passed on 20.3.2013 which was required to be passed upto 31.3.2013. Thus, the order was within the period of limitation. There was no requirement to dispatch the order within the period of limitation itself. The relevant findings recorded by the Tribunal read thus:- 8. The learned counsel for the assessee submitted that assessment order was passed on 29.10.2010 and the order under section 263 has been passed on 20.3.2013. However, the impugned order was dispatched on 4.4.2013 and received by assessee on 6.4.2013. He has therefore submitted ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Cochin Plantations Limited's case (supra) would not come to the rescue of the appellant in view of the judgment of the Apex Court in R.K.Upadayaya's case (supra). 8. With regard to the second issue regarding claim under section 80IB of the Act, it was recorded by the Tribunal that the Assessing Officer had passed the assessment order without making any enquiry and investigation and allowed claim under section 80IB of the Act. Thus, the order was held to be erroneous and prejudicial to the interest of the revenue. The CIT was held to be justified in setting aside the assessment order and directing the Assessing Officer to pass the assessment order afresh by giving opportunity of hearing to the assessee. The conclusion of the Tribunal is quoted below:- 11. The learned counsel for the assessee submitted that assessee is eligible for deduction under section 80IB on surrendered income as well as on job work and Assessing Officer after making proper enquiry granted relief to the assessee at assessment stage. The learned counsel for the assessee has, however, not been able to place on record any query letter issued by the Assessing Officer with regard to deduct ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... survey and during the course of survey, incriminating material was found against the assessee. The Assessing Officer has not discussed anything in the assessment order if he has conducted any enquiry or investigation with regard to material found against the assessee during the course of survey. The Assessing Officer has also failed to make any enquiry or investigation with regard to claim of deduction under section 80IB made by assessee on surrendered income and income on job charges at the assessment stage. The learned counsel for the assessee has shown his inability to produce any query letter issued by the Assessing Officer at assessment stage for investigating or conducting any enquiry with regard to claim of deduction under section 80IB on surrendered income of ₹ 6 crore or on job charges. The learned counsel for the assessee has also shown inability to produce any reply filed before Assessing Officer of making claim of deduction under section 80IB on the surrendered income as well as on job charges by fulfilling conditions of Section 80IB. It would therefore reveal that Assessing Officer did not make any enquiry or investigation at assessment stage so as to qualify ded ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng Officer has passed the assessment order without conducting enquiry and investigation on the above issues and has allowed the claim of assessee under section 80IB of the Act without making any enquiry and investigation. Therefore, the order was correctly treated as erroneous and prejudicial to the interest of revenue. The learned CIT was, therefore, justified in setting aside the assessment order and directing the Assessing Officer to pass the assessment order afresh de novo by giving opportunity of being heard to the assessee. In this view of the matter, no further directions are required to the learned Commissioner of Income Tax in the matter as is argued by learned counsel for the assessee. The appeal of the assessee has thus no merit. The same is accordingly, dismissed. 9. The proposition enunciated in Malabar Industrial Co. Limited's case (supra) is well settled that 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. Each case has to be considered on its own facts. The factual position in the present case is different as ..... 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