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TMI Blog2021 (12) TMI 767X X X X Extracts X X X X X X X X Extracts X X X X ..... ake of provisions of Section 263(1)(c) ?" 2. The facts giving rise to the present proceedings are that the respondent-assessee is engaged in the business of manufacturing and trading of iron and steel items. Search and seizure operations under Section 132 of the said Act were carried out at the residential as well as business premises of the assessee on 25/08/2004. Pursuant thereto a notice under Section 142(1) of the said Act was issued to the assessee and in response thereof the assessee filed return of income on 04/12/2006. On the same day notice under Section 143(2) of the said Act was issued followed by a detailed questionnaire. After grant of opportunity to the assessee the Assessment Officer disallowed deduction sought under Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... appeal before the Income Tax Appellate Tribunal. This appeal along with various other appeals filed by another assessee were heard and decided together on 06/03/2009. It was held that the Commissioner of Income Tax was not justified in invoking his revisional jurisdiction under Section 263 of the said Act with regard to disallowance under Section 80-IB of the said Act. Consequently the penalty levied under Section 271(1)(c) of the said Act was also cancelled. Being aggrieved the Revenue has preferred ITL No.37/2009 challenging the order passed by the Tribunal in IT(SS)A No.13/Nag/2008 for the Assessment Year 2005-06 and ITL No.39/2009 challenging the order passed by the Tribunal in ITA No.380/ Nag/2008 for the same Assessment Year 2005-06. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d by the Tribunal. He submitted that since the order passed by the Assessing Officer had merged in the order passed by the appellate Authority, there was no power with the Commissioner to invoke the provisions of Section 263 of the said Act. Inviting attention to the Assessment Order it was submitted that disallowance was made for certain amounts under provisions of Section 80-IA and 80-IB of the said Act. Ultimately deduction was permitted to the extent of Rs. 8,58,547/- under Section 80-IA of the said Act. In the appeal preferred before the Commissioner of Income Tax (Appeals) the contention raised by the assessee that it was entitled to seek deductions under Section 80-IA/IB of the said Act was upheld. This order came to be maintained by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the learned counsel for the parties and we have given due consideration to their respective submissions. For answering the substantial question of law as framed, it would be necessary to first refer to the judgment of Gujarat High Court in Nirma Chemicals Works (P) Ltd. (supra). The facts of the said case indicate that the assessee had claimed relief under Section 80-I of the said Act. The Assessing Officer partially reduced the claim made by the assessee. The assessee therefore challenged the said order and the Commissioner of Income Tax (Appeals) allowed that appeal and directed the Assessing Officer to grant relief under Section 80-I of the said Act as claimed by the assessee without any disallowance. It was held on the aspect of merger ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the said Act. This order was challenged by the assessee before the Commissioner of Income Tax (Appeals) and on 31/01/2007 the aforesaid two deductions that were disallowed by the Assessing Officer came to be permitted. A finding was recorded that the deduction as claimed by the assessee under Section 80IA/80IB was in accordance with law and was hence granted. This appellate order was challenged by the Revenue before the Tribunal. In the judgment dated 29/10/2007 the Tribunal subsequently considered the aforesaid two heads of disallowances and proceeded to dismiss the appeal preferred by the Revenue on merits. It was thus clear from the aforesaid sequence of events that the order passed by the Commissioner of Income Tax (Appeals) dated 31/0 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ramed is answered by holding that the Tribunal was justified in nullifying the exercise of Commissioner under Section 263 of the said Act. In view of aforesaid ITL No.37/2009 stands dismissed with no order as to costs. 9. Income Tax Appeal No.39/2009 arises in view of the consequential order passed by the Commissioner of Income Tax under Section 271 (1)(c) of the said Act being set aside by the Tribunal pursuant to the aforesaid disallowances being permitted. Once it is found that the order passed by the Commissioner of Income Tax (Appeals) permitting such deductions under Section 80IA/80IB was maintained by the Tribunal in Appeal No.183/Nag/2008 on 29/10/2007 there would be no occasion to invoke penalty proceedings under Section 271(1)(c) ..... X X X X Extracts X X X X X X X X Extracts X X X X
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