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TMI Blog2022 (8) TMI 1271X X X X Extracts X X X X X X X X Extracts X X X X ..... e there is a reference to the said Audit objection in Para 3 of show cause notice and, thus, this contention of the assessee deserves to be taken into consideration. This issue is covered by the order of the Chandigarh Bench of the ITAT in the case of Ganga Acrowools Limited [ 2022 (5) TMI 895 - ITAT CHANDIGARH] wherein held Principal Commissioner of Income-tax was not justified in exercising his power to invoke the provision of section 263 of the Act on the basis of audit objection raised by the Audit Wing of the Department. - Decided in favour of assessee. X X X X Extracts X X X X X X X X Extracts X X X X ..... with a direction to the AO to re-compute the income of the assessee by conducting further enquiries as necessary. 2.3 The assessee has now approached the Tribunal challenging the impugned order by raising the following grounds of appeal: 1. That the Worthy Pr. CIT has erred in cancelling the assessment as already framed by the Assessing Officer u/s 143(3) and holding the same as erroneous and prejudicial to the interest of revenue. 2. That the Worthy Pr. CIT has failed to appreciate the fact that the original assessment has been framed after due application of mind by the concerned Assessing Officer on all the issues and our submissions in this regard as submitted during the course of assessment proceedings, have not been appreciated. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... claimed is only of Rs. 1379527/-, which is by no means a large deduction." 3.1 It has further been argued that the Assessing Officer has framed the assessment u/s 143(3) of the Act after due application of mind and after duly considering the past history of the case. 3.2 Our attention was drawn by the Ld. AR to the 'show cause notice' u/s 263 and it was submitted that the same has been issued on the basis of 'audit objection' which has been placed in Paper Book-II at pages 1 to 3. It was further argued that since proceedings u/s 263 have been initiated by way of audit objection, the said proceedings were liable to be set aside as per the binding order in the case of Ganga Acrowools Ltd. of Chandigarh Bench as reported in [2022] 96 ITR (Tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 012 during the year 2012-13 and the year under consideration is 2nd year of its manufacturing activities/business operations. During the course of assessment proceedings, the assessee has furnished certain details and documents in support of his claim of deduction u/s 80IC. On verification of details and information furnished by the assessee, it is found that there is no change in manufacturing activities. After verification and examination of the case, it is found that the assessee fulfills, the conditions as prescribed u/s 80IC of the Act." 3.4 Similarly, it was argued that for the year under consideration, the Assessing Officer had specifically recorded a finding of fact in the Assessment order that the assessee fulfills all the conditi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r Koganti reported in [2020] 195 DTR 428 (Mad). vii). DTE Exports Pvt. Ltd. v Pr.CIT. ITA No. 138/Vizag/2020 4.0 Per contra, the Ld. Commissioner of Income Tax (Departmental Representative) justified the action of the Ld. PCIT in setting aside the issue and argued that as per notice u/s 263, the Ld. PCIT has observed that the area, where the 'manufacturing unit' is situated did not fall in the area notified by the Board, though, the assessee is engaged in manufacturing activities in the State of Himachal Pradesh and it is not covered by the XIV Schedule of the Act and, thus, the requisite conditions have not been complied with and, thus, the unit was not eligible for deduction u/s 80 IC and, as such, the deduction u/s 80 IC has wrongly b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the ITAT in the case of 'Ganga Acrowools Limited v PCIT (Supra)', in which an identical issue was there and in that order, reference was made to the judgment of the Hon'ble jurisdictional High Court in the case of CIT v Sohana Woollen Mills (Supra ) as under:- "A reference to the provisions of section 263 shows that jurisdiction there under can be exercised if the commissioner of Income-tax finds that the order of the Assessing Officer was erroneous and prejudicial to the interest of the Revenue. Mere audit objection and because a different view could be taken, were not enough to say that the order of the Assessing Officer was erroneous or prejudicial to the interest of the Revenue. The jurisdiction could be exercised if the Commissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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