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| The Tax Publishers2020 TaxPub(DT) 3880 (Pune-Trib) INCOMED TAX ACT, 1961
Section 263
Where on incorrect assumptions of facts without applying correct application of law, AO allowed deduction under section 80P(2)(d) to assessee, which clearly reflected non-application of mind on part of AO, thus, order of PCIT was valid in treating assessment order completed under section 143(3) as erroneous and prejudicial to the interest of revenue.
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Revision under section 263 - Erroneous and prejudicial order - AO incorrectly allowed deduction under section 80P(2)(d) to assessee -
Assessee challenged revision order passed under section 263 by treating original assessment made under section 143(3) as erroneous and prejudicial to the interest of revenue. It was alleged that assessee was not eligible for deduction under section 80P(2)(d) on allegation that assessee made investment in various banks and earned interest income on fixed deposit and dividend income and failed to offer same for tax. Pr. CIT alleged that interest and dividend income earned was other income not eligible for deduction under section 80P(2)(d). Assessee contended that every detail regarding claim under Chapter VI was provided to AO and after examination of which AO allowed claim of assessee. Held: Records regarding assessment proceedings clearly showed that assessee made no specific claim under section 80P(2)(d) before AO nor in return of income. Assessee was a Co-operative Society engaged in business of manufacturing of sugar and by-products. It was not under activities of specified under clause (d) or (b) of section 80P, but under clause (c), and it earned interest and dividend income from other banks, which clearly showed that interest and dividend earned by assessee were not from co-operative society. Therefore, AO on incorrect assumptions of facts without applying correct application of law allowed deduction under section 80P(2)(d), which clearly reflected non-application of mind. Thus, order of PCIT was valid in treating assessment order completed under section 143(3) as erroneous and prejudicial to the interest of revenue.
REFERRED : Totgars' Cooperative Sale Society Ltd. v. ITO (2010) 322 ITR 283 (SC) : 2010 TaxPub(DT) 1466 (SC), CIT v. Ballarpur Industries Ltd. (2017) 85 Taxmann.com 10 (Bom) : 2017 TaxPub(DT) 4015 (Bom-HC) and Pr. CIT v. Totagars Co-Operative Sale Society (2017) 395 ITR 611 (Karn.) : 2017 TaxPub(DT) 1748 (Karn-HC)
FAVOUR : Against the assessee.
A.Y. : 2013-14
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