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TMI Blog2022 (4) TMI 1588X X X X Extracts X X X X X X X X Extracts X X X X ..... ding AY by the Tribunal, it was incumbent upon the PCIT to follow the order of Tribunal, a superior Appellate Authority. PCIT in the impugned order does mention the fact about the order of Tribunal in assessee s own case for AY 2013-14, but, decline to follow the same on the premise that the sole reason for allowing claim of deduction u/s. 80IB(10) of the Act was the assessment order for AY 2015-16. The reason given by PCIT to disregard the order of Tribunal for AY 2013-14 is misconceived, hence, unsustainable. It is evident from records that the AO in AY 2015-16 has taken a view that is supported by the decision of Tribunal. The assessment order cannot be held to be erroneous merely for the reason that it has resulted in loss of revenue. If only one of the twin condition is satisfied, the order passed by the assessing officer cannot be revised u/s. 263 of the Act. In the instant case, we find that the view taken by the assessing officer in allowing assessee s claim of deduction under section 80IB(10) is one of the possible views backed by the order of Tribunal in assessee s own case in respect of the same very project in the AY 2013-14. Therefore, the assessment order cannot be sa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... RDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Principle Commissioner of Income Tax (Central)-4, Mumbai [hereinafter referred to as 'the PCIT'] dated 30.03.2021 for Assessment Year (AY) 2015-16 passed under section 263 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act'). 2. Sh. Vijay Mehta appearing on behalf of the assessee submitted that the PCIT invoked revisional jurisdiction under section 263 of the Act for the reason that the Assessing Officer (AO) has erred in allowing assessee's claim of deduction under section 80IB(10) of the Act in respect of sale of FSI generated from its project at Mayanagar, Worli, Mumbai. The PCIT issued show-cause notice under section 263 of the Act on 01.08.2019 only for the aforementioned reason. The ld. Authorised Representative (AR) submitted that the assessee is engaged in the business of development of real estate projects including redevelopment of Slum Rehabilitation Authority (SRA) Projects, etc. The assessee undertook the construction of Slum Rehabilitation Project under D.C. Regulation at Mayanagar, Worli, Mumbai. The assessee got approval in respect of aforesaid project from Lo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... view taken by the assessing officer is one of the possible views, the assessment order cannot be said to be erroneous merely for the reason that the PCIT favours the other view. To support his submissions the Ld. AR of the assessee relied on the decision in the case of CIT Vs. Max India Ltd. [2008] 166 Taxman 188. 2.1. The ld. AR submitted that the order passed by the PCIT under section 263 of the Act is erroneous as the PCIT has failed to follow the order of Tribunal in assessee's own case on the same issue. The PCIT ought to have follow judicial discipline while adjudicating this issue. To support his argument, the ld. AR draws support from the decision in the case of Bank of Baroda Vs. H C. Shrivasrsava [2002] 122 Taxman 330 (Bombay). 2.2. The ld. AR further submitted that revisional jurisdiction under section 263 of the Act can only be invoked where the PCIT is of considered opinion that the assessment order is erroneous and in so far as prejudicial to the interest of Revenue. The power under section 263 cannot be invoked just to keep the issuer alive. The ld. AR asserted that from impugned order it would be evident that it is not the PCIT's own consideration on which revisi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er section 263 dated 01.08.2019 (at page 18 to 20 of the PB) would show that the only issue on which PCIT proposed to exercise revisional jurisdiction was assessee's claim of deduction under section 80IB(10) of the Act on account of sale of FSI generated from project at Mayanagar, Worli, Mumbai, constructed under Development Control (DC) Regulation 33(10). Undisputedly, on the very same project the assessee had claimed deduction for the first time in the AY 2003- 04, the same was denied for the reason that the project was incomplete. The assessee did not agitate disallowance further. Thereafter, the assessee claimed deduction u/s.80IB(10) of the Act in respect of same very project in AY 2013- 14, the AO again disallowed assessee's claim of deduction under section 80IB(10) in respect of Mayanagar project. In first appeal, the assessee succeeded. The Revenue carried the issue in appeal before the Tribunal in ITA No. 2764/Mum/2018 (supra). The Co-ordinate bench discussed the issue threadbare on facts and legal requirements and thereafter upheld the findings of CIT(A). For the sake of completeness the relevant extract of the order by Coordinate Bench is reproduced herein below: "10. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tor was in fact sold. It is, therefore, the reference made by the Assessing Officer to the proceedings of A.Y. 2003-04 was illogical and uncalled for as the claim made in the year under appeal was not dependent upon that of the earlier year; and the CIT (A) was perfectly justified in refuting such argument canvassed by the Assessing Officer in paragraph 4.12 of his order. 12. With respect to the objection that since the Mayanagar project was approved on 26.11.1998, the benefit of the Notification No. 67/2010 dated 03.08.2010 and the corrigendum issued vide Notification No. 02/2011 Income Tax dated 05.01.2011 was not available. In this regard, it is noted that the inference drawn by the Assessing Officer is contrary to the statutory provisions set out under section 80IB(10) of the Act. For ready reference, it is necessary to reproduce section 80-IB(10) of the Act, as applicable to the year under consideration below: "(10) The amount of deduction in the case of an undertaking developing and building housing projects approved before the 31st day of March, 2008 by a local authority snail be hundred per cent of the profits derived in the previous year relevant to any assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Maharashtra under DCR 33(10) for rehabilitation of the slum dwellers, and it was covered by the Notifications. Therefore, in view of the unambiguous language of the proviso, the project completed by the assessee was excluded from the restrictions imposed by clauses (a) and (b) of sub-s. (10) of S. 80-IB of the Act Hence, we are of the considered view that rejection of assessee's claim for deduction u/s, 80-IB(IO) of the Act was unjustified, and it was rightly so held by the CIT(A) in paragraph 4.10 of his order. 14. We, further noted that a similar interpretation as drawn by the Assessing Officer with respect to the notification dated 05.01.2011, that it was to extend the permissible period in respect of projects approved after 01.04.2004, was considered and adjudicated by the co-ordinate Bench of this Tribunal in the case of Ramesh Gunshi Dedhia v. ITO [148 ITD 356 (Mum)], which was relied upon before the CIT (A). In the said case, it was held that as a consequence of the proviso, the conditions prescribed in clauses (a) and (b) are relaxed if the housing project was carried out in accordance with the scheme of the Central or State Government. Since, the CIT(A) has extracte ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i 1991 under which the assesses has constructed the rehab buildings and has been notified by the CBDT. Further the facts based on which the deduction was denied in earlier years do not persist and have changed since then and the project satisfies the conditions stated in section 80IB(10) of the Act. Considering the same and further considering the facts of the case, the contention of the assessee merits acceptance. Therefore the deduction of Rs. 29,13,06959/- on the transfer of TDR claimed u/s. 80IB(10) of the I. T. Act is allowed." 17. We further noted that in arriving at his decision to delete the disputed disallowance during the year under consideration, the CIT(A) has also taken note of the aforesaid order dated 28.12.2017 passed u/s. 143(3) of the Act for A.Y. 2015-16 in paragraph 4.21 of his order. For all the above reasons, we are of the view that the denial of deduction claimed u/s. 80-IB(10) of the Act was unwarranted and unjustified. The reasoned order of the CIT (A) deleting the disallowance is in order and it does not call for any interference. 18. In regard to the other objection raised by the Assessing Officer that the FSI granted was sold to a group entity ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are not repeated for the sake of brevity. The reason for which the disallowance made in A.Y. 2003-04 was not challenged in further proceedings, and as to why the claim was made in A.Y, 2013-14 have been considered by the CIT (A) and also discussed elaborately in the preceding paragraphs. For the reasons already stated, the assertions made in the aforesaid note of the Addl, CIT deserve to be rejected. 21. In this view of the matter and considering facts and circumstance of this case, we are of the considered view that the limitations prescribed in clause (a) and (b) of proviso to section 80IB(10) of the Act, in respect of date of commencement and completion of the project has no application to projects undertaken under the scheme of Central or State Govt. Thus, in view of the fact that the project on which the benefit of deduction was claimed u/s 80IB(10) of the Act, was approved under DC regulation 33(10) of Govt. of Maharashtra, and also notified by the CBDT u/s 80IB(10) of the Act, we are of the considered view that the assessee is entitled for deduction towards sale of FSI/TDR. The CIT(A) after considering relevant facts, has rightly allowed the benefit and deleted addition ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... m of the Court above as held by the Supreme Court in the matter of CCE v. Dunlop India Ltd. AIR 1985 SC 330." [Emphasized by us] The PCIT instead of mechanically rejecting the order of Tribunal ought to have applied the same on identical set of facts in assesse's own case in impugned (subsequent) assessment year. 9. It is evident from records that the Assessing Officer in AY 2015-16 has taken a view that is supported by the decision of Tribunal. The assessment order cannot be held to be erroneous merely for the reason that it has resulted in loss of revenue. The Hon'ble Apex Court in the case of Max India Ltd. (supra) has held that, "when the Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue, unless the view taken by the Incometax Officer is unsustainable in law." 10. The twine conditions sine qua non for exercise of revisional jurisdiction, are: (i) the assessment order should be erroneous; and (ii) prejudicial ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... revision received from Addl. CIT, hence, revision order is unsustainable. Before proceeding further it would be imperative to refer to the relevant provisions of section 263 of the Act. For quick reference, the same are reproduced herein below: " Section 263: (1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment." A bare reading of provisions of section 263 of the Act would show, that for initiating revisional powers under section 263, the primary requirement of section is that the PCIT/CIT has to examine records and consider the order passed by the assessing officer. In other words, section 263 mandates two preconditions to be complied before com ..... X X X X Extracts X X X X X X X X Extracts X X X X
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