INCOME TAX ACT, 1961

Section 263

Revision under section 263 - Order of assessment erroneous and prejudicial to the interest of Revenue - Tribunal set aside the order passed by CIT -

Assessment under section 143(3) was completed by AO determining the income at Rs. Nil under the normal provisions and determined income under section 115JB. The income was assessed but the same was reduced to Nil after set off of brought forward losses. Against the assessment order passed by AO, assessee filed an appeal before CIT(A) who granted relief. Thereafter, CIT passed an order under section 263 directing AO to pass a fresh assessment order as per law, after conducting proper inquiries/investigations. Following the direction of CIT, AO arrived at total income of Rs. Nil as per the normal provisions and determined income under section 115JB. Held: Mere fact that CIT was not in agreement with the view adopted by AO, would not render the order of assessment erroneous and prejudicial to interest of Revenue. Order under section 263 passed by CIT was set aside/quashed by the ITAT in case of Future Ideas Co. Ltd. v. PCIT [ITA No. 3062/Mum/2016, dt. 12-4-2017] : 2017 TaxPub(DT) 0858 (Mum-Trib). As Tribunal had set aside the order under section 263 passed by CIT, therefore, order passed under section 263 by CIT did not survive.

Followed:CIT v. Max India Ltd. (2007) 295 ITR 282 (SC) : 2007 TaxPub(DT) 1548 (SC) Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (SC) : 2000 TaxPub(DT) 1227 (SC) CIT v. Design & Automation Engineers (Bombay) Pvt. Ltd. (2010) 323 ITR 632 (Bom) : 2010 TaxPub(DT) 0204 (Bom-HC) Future Ideas Co. Ltd. v. PCIT [ITA No. 3062/Mum/2016, dt. 12-4-2017] : 2017 TaxPub(DT) 0858 (Mum-Trib)

REFERRED :

FAVOUR : In assessee's favour

A.Y. : 2011-12

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