INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Erroneous and prejudicial order - Assessee whether mineral based industry -

Assessee claimed deduction under section 80-IC(2)(b)(iii) by describing itself as a mineral based industry. Though, issue as to whether assessee was a mineral based industry, was not specifically analyzed, AO assumed it to be correct and proceeded further, however, rejected assessee's claim on technical non-compliance of filing separate forms. Assessee being aggreived by this filed appeals before CIT(A), who allowed the same and benefit of deduction under section 80-IC was allowed. When this was the position, CIT assumed jurisdiction under section 263 and a revision proceeding was initiated suo motu. AO had not examined or applied his mind on the basic issue as to whether assessee was actually a mineral based industry or not.Held: When in revision proceedings CIT accepted course of the order that assessee had claimed deduction under section 80-IC claiming to be a mineral based industry and in that background when the claim was disallowed by AO but allowed by the CIT(A), the issue stood concluded and there was no scope for re-examination in the jurisdiction under section 263 as assessment order had merged in the appellate order. The matter not having been examined in the same manner or to the same extent and depth, was immaterial.

REFERRED : CIT v. Amitabh Bachchan (2016) 286 CTR (SC) 113 : 2016 TaxPub(DT) 2291 (SC), CIT v. Mehsana District Co-operative Milk Producers Union Ltd. (2003) 263 ITR 645 (Guj) : 2003 TaxPub(DT) 1178 (Guj-HC), CIT v. Shashi Theatre (P) Ltd. (2001) 248 ITR 126 (Guj) : 2001 TaxPub(DT) 0601 (Guj-HC), CIT v. Shri Arbuda Mills Ltd. (1998) 147 CTR (SC) 474 : 1998 TaxPub(DT) 0057 (SC) and Oil India Ltd. v. CIT (1982) 138 ITR 836 (Cal) : 1982 TaxPub(DT) 0739 (Cal-HC).

FAVOUR : In assessee's favour.

A.Y. : 2005-06 & 2006-07

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