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TMI Blog2018 (4) TMI 1282X X X X Extracts X X X X X X X X Extracts X X X X ..... e no error in the order of the AO on this score. This apart, once these facts were brought to the notice of Pr.CIT, the Pr.CIT ought to have appreciated the case of the assessee objectively in perspective and could not shrink his sacrosanct obligations and resort to simply set aside a completed assessment on non-existent ground. Thus, the prerequisites of section 263 are not satisfied. We also do not visualize any merit in the plea on behalf of the Revenue about the lack of enquiry on the factual aspects. In the absence of any change in the beneficial ownership, we are unable to comprehend the nature of enquiry sought by the Pr.CITin this regard. Hence, we are disposed to hold that the action of the Pr.CIT is devoid of sanction of law. - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... evenue. The contents of show-cause notice is reproduced hereunder. In this case, Assessee was allowed to carry forward the business losses and unabsorbed depreciation allowance for set off against the future income. During the year, the Assessee Company transferred its holding of shares, in favour of GPEC Ltd., a fellow subsidiary of ultimate holding company CLP Holding Ltd., Hong Kong on 31-3-2011. As per the provisions of Section 79 of the Act, where a change in shareholding of more than 51 percent of the voting power on the last day of the year or years in which the loss was incurred has taken place in a previous year, no loss incurred in any year prior to the previous year shall be carried forward and set off against the income o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt year attracting the embargo placed in section 79 of the Act whereby loss incurred in any year prior to previous year shall not be allowed to be carried forward for set off in subsequent assessment year(s). The Pr.CIT alleged that the AO has failed to apply the correct position of law enjoined by section 79 of the Act and has overlooked and failed to make proper verification and enquiry in this regard. The Pr.CIT accordingly cancelled the assessment framed under s.143(3) of the Act and set aside the above issue to the file of the AO for de novo adjudication. 5. Aggrieved by the action of the Pr.CIT, the assessee is in appeal before the Tribunal agitating the jurisdiction usurped by the Pr.CIT under s.263 of the Act. 6. The Ld.AR f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e with law and there is scope for any enquiry in this regard. 7. The Ld.DR, on the other hand, relied upon the order of the Pr.CIT in question and contended that despite the change in share hold pattern, the AO has omitted to examine the issue in the backdrop of section 79 of the Act which rendered its order to be both erroneous as well as prejudicial to the interests of the revenue. The Ld.DR referred to the decision of Hon ble Supreme Court in the case of Daniel Merchants Pvt.Ltd. Another vs. ITO in SLP No.23976/2017 order dated 29/11/2017 to submit that setting aside the order of the AO by the designated authority for the purposes of conducting proper enquiry into vital issue by invoking section 263 of the Act cannot be interfered. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee-company so held by the ultimate holding company was transferred to another company (CLP India Pvt.Ltd.) which is again a subsidiary of GEPC. Thus, in effect, even after the transfer of shares by the ultimate holding company to another subsidiary, the beneficial ownership of the assessee-company continues to vest with the same holding company. Thus, the ultimate holding company continues to enjoy complete control over the assessee-company as before. 9.1. In the light of these facts, we have perused section 79 of the Act and notice that the aforesaid provision envisages not less than 51% of the voting power were beneficially held by persons who beneficially held shares of the company carrying not less than 51% of the voting pow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rt, once these facts were brought to the notice of Pr.CIT, the Pr.CIT ought to have appreciated the case of the assessee objectively in perspective and could not shrink his sacrosanct obligations and resort to simply set aside a completed assessment on non-existent ground. Thus, the prerequisites of section 263 are not satisfied. 11. We also do not visualize any merit in the plea on behalf of the Revenue about the lack of enquiry on the factual aspects. In the absence of any change in the beneficial ownership, we are unable to comprehend the nature of enquiry sought by the Pr.CITin this regard. Hence, we are disposed to hold that the action of the Pr.CIT is devoid of sanction of law. Consequently, the order passed under s.263 of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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