M/s. Translumina Therapeutics LLP, New Delhi V. Pr. CIT, Dehradun

ITA 2520/DEL/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 4325 (ITAT-DELHI)
• Duration Of Justice: 4 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 15-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 27-04-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: S S RANA
• Assessee Lawyers: SSH RAKESH GUPT A; SOMIL AGARWAL S
• Keywords: Revision of order; Principle of natural justice; Period of limitation; Prejudicial to interest; Time period of passing order
• Section: 143(3); 142(1); 133(6); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH : G , NEW DELHI BEFORE SH. I.C. SUDHIR , JUDICIAL M EMBER AND SH. O.P. KANT , ACCOUNTANT MEMBER ITA NO. 2520 /DE L/ 2017 ASSESSMENT YEAR : 2012 - 13 M/S. TRANSLUMINA THERAPEUTICS LLP, C/O - M/S. RRA TAXINDIA, D - 28, SOUTH EXTENSION, PART - 1, NEW DELHI VS. PR.CIT, DEHRADUN PAN : AAGFT2436H (APPELLANT) (RESPONDENT) APPELLANT BY S/SH. RAKESH GUPTA & SOMIL AGARWAL, ADVOCATES RESPONDENT BY SH. S.S. RANA, CIT(DR) DATE OF HEARING 09.08.2017 DATE OF PRONOUNCEMENT 15.09.2017 ORDER PER O.P. KANT , A. M. : THIS APPEAL BY THE ASSESSEE IS DIRECTED AGAINST ORDER DATED 30/03/2017 PASSED BY THE COMMISSIONER OF I NCOME T AX, DEHRADUN ( IN SHORT THE CIT ) UNDER SECTION 263 OF THE INCOME - TAX ACT, 1961 (IN SHORT THE ACT ) REVISING THE ASSESSMENT ORDER FOR ASSESSMENT YEAR 2012 - 13. 1. THAT HAVING REGARD TO FACTS & CIRCUMSTANCES OF THE CASE, LD. PR. CIT HAS ERRED IN LAW AND ON FACTS IN ASSUMING JURISDICTION U/S 263 AND HAS FURTHER ERRED IN OBSERVING THAT THE ADMISSIBILITY OF DEDUCTION CLAIMED U/S 80IC WAS NOT PROPERLY EXAMINED DURING THE COURSE OF ASSESSMENT PROCEEDINGS AND FURTHER ERRED IN HOLDING THE 2 ITA NO. 2520/DEL/2017 ASSESSMENT ORDER DATED 18 - 03 - 2015 IS ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. 2. THAT HAVING REGARD TO FACTS & CIRCUMSTANCES OF THE CASE, LD. PR. CIT HAS ERRED IN LAW AND ON FACTS IN ASSUMING JURISDICTION U/S 263 AND FURTHER ERRED IN SETTING ASIDE THE ISSUE TO THE FILE OF LD. AO TO M AKE ASSESSMENT AFRESH AND THAT TOO WITHOUT OBSERVING THE PRINCIPLES OF NATURAL JUSTICE. 3. THAT IN ANY CASE AND IN ANY VIEW OF THE MATTER, ACTION OF LD. PR. CIT IN ASSUMING JURISDICTION AND PASSING THE IMPUGNED ORDER U/S 263 IS BAD IN LAW AND AGAINST THE FACTS AND CIRCUMSTANCES OF THE CASE. 4. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, AMEND, MODIFY, DELETE ANY OF THE GROUNDS OF APPEAL BEFORE OR AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 2. THE FACTS IN BRIEF OF THE CASE ARE THAT THE ASSESSEE SET UP A UNIT AT PLOT NO. 9, PHARMA CITY SELAQUI, UTTRANCHAL AND COMMENCED BUSINESS ON 22/06/2011. THE ASSESSEE WAS ENGAGED IN PRODUCING DRUG COATED CORONARY STENTS AND THEIR STERILIZED PACKING. THE YEAR UND ER CONSIDERATION WAS FIRST YEAR OF BUSINESS OF THE ASSESSEE. THE ASSESSEE FILED RETURN OF INCOME ELECTRONICALLY ON 30/09/2012 DECLARING NIL INCOME. IN THE RETURN FILED , THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80IC OF THE ACT AMOUNTING TO RS.14,00, 880/ - . THE ASSESSMENT UNDER SECTION 143(3) OF THE ACT WAS COMPLETED BY THE ASSESSING OFFICER ON 18/03/2015, WHEREIN HE ALLOWED THE CLAI M OF DEDUCTION UNDER SECTION 80 IC OF THE ACT. IN VIEW OF THE CIT , THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AS TO PREJUDICIAL TO THE INTEREST OF THE REVENUE, THEREFORE HE ISSUED NOTICE TO THE ASSESSEE UNDER SECTION 263 OF THE ACT ON 30/01/2017 , ASKING AS TO WHY THE ORDER OF THE ASSESSING OFFICER MAY NOT BE MODIFIED/REVISED/CANCELLED UNDER SECTION 263 OF THE ACT. BE FORE THE CIT, T HE LD. COUNSEL SUBMITTED THAT THE ASSESSING OFFICER HAD EXAMINE D 3 ITA NO. 2520/DEL/2017 BOOKS OF ACCOUNTS AND OTHER EVIDENCE FILED DURING THE COURSE OF ASSESSMENT PROCEEDING AND MADE ALL NECESSARY ENQUIRIES WITH REGARD TO DEDUCTION UNDER SECTION 80IC OF THE ACT , I NCLUDING SPOT ENQUIRY CONDUCTED THROUGH THE INSPECTOR OF THE INCOME T AX, AND , THUS , THE ORDER OF THE ASSESSING OFFICER COULD NOT BE TERMED AS ERRONEOUS. THE LEARNED COUNSEL SUBMI TTED THAT THE DRUG COATING IS A COMPLEX MANUFACTURING PROCESS IN WHICH THE DRU G IS COATED ON THE NON - STERILE BMS. HE FURTHER SUBMITTED THAT DRUG COATING IS EXTREMELY SOPHISTICATED TECHNOLOGY, WHICH IS PROTECTED BY PATENT AND DIFFERENTIATES THE CORONARY DRUG ELUTING STENTS FROM ORDINARY STENTS. ACCORDING TO HIM, DRUG ELUTING STENTS S YSTEM IS A NEW AND DISTINCT OBJECT OR ARTICLE OR THING WITH A DIFFERENT CHEMICAL COMPOSITION FROM THE RAW MATERIALS AND THEREFORE THE PROCESS INVOLVED IN THE CASE AMOUNTS TO MANUFACTURING AND THE ASSESSEE WAS ELIGIBLE FOR DEDUCTION UNDER SECTIO N 80 IC OF TH E ACT. 2.1 THE LD. CIT, HOWEVER , WAS OF THE OPINION THAT THE PROCESS OF DRUG COATING DOES NOT RESULT IN TRANSFORMATION OF THE ARTICLE OR OBJECT INTO A NEW OBJECT OR DOES NOT BRING INTO EXISTENCE A NEW AND DISTINCT OBJECT OR ARTICLE AND THUS THE PROCESS OF COATING DOES NOT COME WITHIN THE PURVIEW OF DEFINITION OF MANUFACTURING AS DEFINED IN SECTION 2(29BA) OF THE ACT. 2.2 FURTHER, THE LD. CIT OBSERVED THAT THE ASSESSEE DID NOT FURNISH AUDIT REPORT REQUIRED FOR CLAI MING DEDUCTION UNDER SECTION 80 IC OF TH E ACT IN PRESCRIBED FORM NO. 10 CCB DURING THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD. CIT ALSO OBSERVED THAT IN COPY OF FORM ISSUED BY THE DRUG LICENSING AND CONTROLLING AUTHORITY TO THE ASSESSEE, WHICH WAS SUBMITTED TO THE ASSESSING OFFICER, THE LIST OF DRUGS MANUFACTURED WAS NOT ENCLOSE D BY THE ASSESSEE. 2.3 IN VIEW OF THE OBSERVATIONS, THE LD. CIT FORMED THE OPINION THAT ADMISSIBILITY OF DEDUCTION UNDER SECTION 80IC OF THE ACT WAS NOT PROPERLY EXAMINED DURING THE COURSE OF ASSESSMENT PROCEEDING AND AC CORDINGLY , 4 ITA NO. 2520/DEL/2017 HE SET ASIDE THE ASSESS MENT WITH THE DIRECTION TO MAKE FRESH ASSESSMENT. 2.4 AGGRIEVED , THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL RAISING THE GROUNDS AS REPRODUCED ABOVE. 3. THE ONLY EFFECTIVE ISSUE IN THE PRESENT APPEAL IS AGAINST THE ACTION OF THE LD. CIT IN ASSUMING JUR ISDICTION UNDER 263 OF THE ACT AND HOLDING THE ASSESSMENT ORDER AS ERRONEOUS INSOFAR AS PREJ UDICIAL TO THE INTEREST OF THE R EVENUE ON THE GROUND THAT ADMI SSIBILITY OF DEDUCTION UNDER 80 IC OF THE ACT WAS NOT PROPERLY EXAMINED. 4. BEFORE US, THE LD. COUNSEL OF THE ASSESSEE FILED PAPER BOOK CONTAINING PAGES 1 TO 187 AND ASSAILED THE ORDER OF THE CIT. ACCORDING TO THE LD. COUNSEL , THE ORDER OF THE CIT NEED TO BE QUASHED BASED ON MANY REASONS. 5. ACCORDING TO THE LD. COUNSEL, T HE FIRST REASON BEING THE IMPUGN ED ITSELF ASSESSMENT ORDER SUFFERS FROM LACK OF JURISDICTION. H E SUBMITTED THAT THE ASSESSMENT ORDER PASSED BEING BAD IN LAW AND VOID AB - INITIO, CANNOT BE HELD AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND THEREFORE THE ORDER PASSED UNDER SECTION 263 OF THE ACT IS LIABLE TO BE HELD INVALID AND DESERVE TO BE QUASHED AS HELD IN FOLLOWING JUDICIAL DECISIONS: M/S. CLASSIC FLOUR & FOOD PROCESSING (P) LTD. VS. CIT, KOL - IV IN ITA NO. 764 - 766/KOL/2014 DATED 05.04.2017 KRISHAN KUMAR SARAF VS. CIT IN ITA NO. 4562/DEL/2011, DATED 24.09.2015 6. T HE LEARNED COUNSEL SUBMITTED THAT THE ASSESSING OFFICER PASSED THE ASSESSMENT ORDER DATED 18/03/2015 UNDER SECTION 143(3) OF THE ACT WITHOUT ASSUMING JURISDICTION TO PASS THE ORDER AS NO NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED BY THE JURISDICTIONAL ASSESSING 5 ITA NO. 2520/DEL/2017 OFFIC ER AND IN ABSENCE OF ISSUANCE OF VALID NOTICE UNDER SECTION 143(2) OF THE ACT, THE JURISDICTION ASSUMED TO PASS THE ORDER UNDER SECTION 143(3)/147 IS NOT IN ACCORDANCE WITH LAW. 7. THE LEARNED COUNSEL REFERRED TO PAGE 21 OF THE PAPER BOOK, WHICH IS NOTIC E UNDER SECTION 143(2) OF THE ACT DATED 16 /08/ 2013 ISSUED BY THE DCIT/ACIT CIRCLE - 16(1), NEW DELHI. HE FURTHER REFERRED TO PAGE 22 TO 23 OF THE PAPER BOOK, WHICH IS A N APPLICATION UNDER SECTION 124 O F THE ACT ADDRESSED TO THE ACIT, CIRCLE - 16(1) , NEW DELH I FOR TRANSFER OF JURISDICT ION TO THE DC/ACIT, DEHRADUN , UTTRAKHAND. IN THE SAID APPLICATION , THE ASSESSEE SUBMITTED THAT PRINCIPAL BUSINESS OF THE ASSESSEE BEING SITUATED AT DEHRADUN, JURISDICTION OVER THE CASE LIES WITH DCIT/ACT, DEHRADUN. THE LD. COUNS EL ALSO REFERRED TO PAGE 27 OF THE PAPER BOOK , WHICH IS A LETTER BY THE ITO, WARD 25(3), NEW DELHI TRA NSFERRING THE RECORDS TO ACIT, DEHRADUN. THE LD. COUNSEL ALSO REFERRED T O PAGE NO. 29 OF THE PAPER BOOK , WHICH IS A LETTER TRANSFERRING THE CASE BY THE DC IT/ACIT , DEHRADUN TO THE ITO WARD 2(5), DEHRADUN I.E. WHO FINALLY PASSED THE ASSESSMENT ORDER UNDER SECTION 143 (3) OF THE ACT ON 18/03/2015. THE CONTENTION OF THE LD. COUNSEL IS THAT THE INCOME TAX OFFICER, WARD 2(5) , DEHRADUN , WHO WAS HAVING JURISDICTION OVER THE CASE DID NOT ISSUE NOTICE UNDER SECTION 143(2) OF THE ACT WITHIN THE LIMITATION PERIOD AND THEREFORE THE ASSESSMENT PASSED BY HIM WAS BAD IN LAW AND NON - EST IN THE EYE OF LAW. HE SUBMITTED THAT SINCE THE ASSESSMENT OR DER WAS VOID AB INITIO , IT CANNOT BE REVISED. 8. LEARNED COUNSEL ALSO RELIED ON THE DECISION OF THE TRIBUNAL DATED 27/05/2016 IN THE CASE OF MICRO SPACEMATRIX SOLUTIONS PRIVATE LIMITED VERSUS INCOME TAX OFFICER IN ITA NO. 669/DEL/2012 AND SUBMITTED THA T EVEN JURISDICTION CANNOT BE CONFERRED UPON THE ASSESSING OFFICER BY CONSENT OF THE ASSESSEE. 6 ITA NO. 2520/DEL/2017 9. ON THE ISSUE OF ISSUING FIRST NOTICE UNDER SECTION 143(2) OF THE ACT BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE CASE WITHIN THE STIPULATED PERIO D , THE LD. CIT( DR ) REFERRED TO LETTER DATED 02/09/2013 FILED BY THE ASSESSEE IN THE OFFICE OF THE ACIT, CIRCLE 16(1), NEW DELHI AND SUBMITTED THAT THE ASSESSEE ITSELF PROVIDED REGISTERED OFFICE OF THE ASSESSEE LLP AT NEW DELHI IN PAN DATABASE AND ACCORDI NGLY, THE ASSESSEE WAS ASSIGNED UNDER THE JURISDICTION OF DEPUTY/ASSISTANT COMMISSIONER OF INCOME - TAX NEW DELHI AND ON SELECTION OF THE CASE FOR SCRUTINY, THAT VERY ASSESSING OFFICER ISSUED NOTICE UNDER SECTION 143(2) OF THE ACT ON 16/08/2013 AND SERV ED WITHIN THE PRESCRIBED PERIOD . FURTHER, HE SUBMITTED THAT ON THE REQUEST OF THE ASSESSEE TO TRANSFER THE CASE FROM NEW DELHI TO DEHRADUN AS ITS PRINCIPAL PLACE OF BUSINESS WAS SITUATED AT DEHRADUN, THE ASSESSING OFFICER TRANSFERRED THE CASE FOLLOWING DUE P ROCEDURE OF LAW TO THE ASSESSING OFFICER AT DEHRADUN, WHO COMPLETED THE ASSESSMENT U/S 143(3) ON 18/03/2015. ACCORDING TO THE LD. CIT ( DR ) NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED BY THE ASSESSING OFFICER HAVING JURISDICTION OVER THE CASE AT RELEVA NT POINT OF TIME AND THEREFORE THERE IS NO INVALIDITY OR LACK OF JURISDICTION IN COMPLETION OF THE ASSESSMENT. 10. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD ON THE ISSUE IN DISPUTE. FOR ADJUDICATING THE DISPUTE, WHET HER THE NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED BY THE JURISDICTIONAL ASSESSING OFFICER, IT IS RELEVANT TO REPRODUCE CONTENTS OF LETTER DATED 02/09/2013 SUBMITTED BY THE ASSESSEE BEFORE THE ACIT , 16(1) , NEW DELHI, WHICH IS AVAILABLE ON PAGE 22 TO 23 OF ASSESSEE S PAPER BOOK: FACTS OF THE CASE 7 ITA NO. 2520/DEL/2017 TRANSLUMINA THERAPEUTICS LLP , WAS INCORPORATED AS A PRIVATE LIMITED COMPANY UNDER THE INDIAN COMPANIES ACT, 1956. LATER, THE COMPANY WAS CONVERTED INTO A LIMITED LIABILITY PARTNERSHIP UNDER THE LIMITED LIABILITY PARTNERSHIP ACT, 2008. [HEREINAFTER REFERRED TO AS THE LLP ] THE ASSESSEE FIRM IS ENGAGED IN THE BUSINESS OF MANUFACTURING MEDICAL DEVICES, AND CLAIMING DEDUCTION UNDER SECTION 80IC OF THE INCOME TAX ACT, 1961. THE ASSESSEE FILED E - FILED ITS RE TURN OF INCOME U/S 139(1) OF THE INCOME TAX ACT, 1961 ON 30 TH SEPTEMBER, 2012 BEARING E - FILING ACKNOWLEDGEMENT NUMBER AS 507824651300912. THE LLP HAS ITS REGISTERED OFFICE SITUATED IN NEW DELHI. HOWEVER, ALL ITS OPERATIONS, MANUFACTURING ACTIVITIES, SALES AND PURCHASE OFFICE IS SITUATED AT 9, PHARMA CITY, SELAQUI, DEHRADUN, UTTARAKHAND. OUR SUBMISSION IN VIEW OF THE ABOVE, WE RESPECTFULLY SUBMIT BEFORE YOUR GOODSELF THE FACT THAT THE PRINCIPAL PLACE OF BUSINESS OF THE ASSESSEE IS SITUATED AT THAT IN THE PAN DATABASE, THE DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX, NEW DELHI HAS BEEN LISTED AS THE ASSESSEE FIRM S ASSESSING OFFICER. HOWEVER, AS MENTIONED ABOVE, THE PR INCIPAL PLACE OF BUSINESS WITHIN THE MEANING OF SECTION 124 OF THE INCOME TAX ACT, IS SITUATED AT DEHRADUN, UTTARAKHAND. THEREFORE, JURISDICTIONAL ASSESSING OFFICE IN THE CASE OF ASSESSEE IS THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, RANGE 2, DEHRAD UN. 11. FURTHER IN THE SAME LETTER, THE ASSESSEE ITSELF REQUESTED FOR TRANSFER OF JURISDICTION FROM NEW DELHI TO DEHRADUN, WHICH READS AS UNDER: THEREFORE, WE HEREBY PRESENT THIS APPLICATION UNDER SECTION 124 OF THE ACT, FOR TRANSFER OF JURISDICTION FROM THE DEPUTY COMMISSIONER OF INCOME TAX, NEW DELHI TO THE DEPUTY/ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, DEHRADUN, UTTARAKHAND. THE PAN OF THE ASSESSEE MAY ALSO BE LINKED WITH THE CORRECT JURISDICTIONAL OFFICER. 12. F URTHER , IN A SUBSEQUENT LETTER FILED BEFORE THE DCIT, CIRCLE 16(1), NEW DELHI, WHICH IS AVAILABLE ON PAGE 25 OF THE ASSESSEE S PAPER BOOK, 8 ITA NO. 2520/DEL/2017 THE ASSESSEE ALSO INFORMED THAT IT HAD FI LED APPLICATION BEFORE THE ACIT, DEHRADUN FOR TRANSFER OF CASE FROM DELHI TO DEHRAD UN. 13. THE JURISDICTION OVER A REGISTERED FIRM /LLP IS ASSIGNED IN TERMS OF SECTION 124 OF THE ACT TO THE ASSESSING OFFICER ON THE BASIS OF ADDRESS OF PRINCIPAL PLACE OF BUSINESS, WHICH IS PROVIDED IN THE APPLICATION FILED AT THE TIME OF PAN ALLOTMENT. THE SECTION 124 (1) READS AS UNDER: 124. (1) WHERE BY VIRTUE OF ANY DIRECTION OR ORDER ISSUED UNDER SUB - SECTION (1) OR SUB - SECTION (2) OF SECTION 120 , THE ASSESSING OFFICER HAS BEEN VESTED WITH JURISDICTION OVER ANY AREA, WITHIN THE LIMITS OF SUCH AREA, HE SHALL HAVE JURISDICTION (A) IN RESPECT OF ANY PERSON CARRYING ON A BUSINESS OR PROFESS ION, IF THE PLACE AT WHICH HE CARRIES ON HIS BUSINESS OR PROFESSION IS SITUATE WITHIN THE AREA, OR WHERE HIS BUSINESS OR PROFESSION IS CARRIED ON IN MORE PLACES THAN ONE, IF THE PRINCIPAL PLACE OF HIS BUSINESS OR PROFESSION IS SITUATE WITHIN THE AREA, AND (B) IN RESPECT OF ANY OTHER PERSON RESIDING WITHIN THE AREA. 14. FURTHER , SECTION 120(5) OF THE ACT HAS SPECIFICALLY CONFERR ED THE TERRITORIAL JURISDICTI ON TO THE ASSESSING OFFICER , WHICH READS AS UNDER : 124 . (5) NOTWITHSTANDING ANYTHING CONTAINED IN THIS SECTION OR IN ANY DIRECTION OR ORDER ISSUED UNDER SECTION 120 , EVERY ASSESSING OFFICER SHALL HAVE ALL THE POWERS CONFERRED BY OR UNDER THIS ACT ON AN ASSESSIN G OFFICER IN RESPECT OF THE INCOME ACCRUING OR ARISING OR RECEIVED WITHIN THE AREA, IF ANY, OVER WHICH HE HAS BEEN VESTED WITH JURISDICTION BY VIRTUE OF THE DIRECTIONS OR ORDERS ISSUED UNDER SUB - SECTION (1) OR SUB - SECTION (2) OF SECTION 120 . 15. THE JURISDICTION OVER THE ASSESSEE WAS ASSIGNED TO THE ASSESSING OFFICER AT NEW DELHI ON THE APPLICATION MADE FOR PAN ALL OTMENT. DURING PAN APPLICATION , THE ASSESSEE FILLS UP THE WARD/ CIRCLE AND CODE OF THE JURISDICTIONAL ASSESSING OFFICER AFTER CARRYING OUT ENQUIRY ON THE WEBSITE OF THE INCOME - TAX DEPARTMENT, FOR WHICH SPECIAL TOOL/FACILITY ARE PROVIDED 9 ITA NO. 2520/DEL/2017 ON WEBSITE . ON PERUSAL OF NOTICE UNDER SECTION 143(2) DATED 16/08/2013, WHICH IS AVAILABLE ON PAGE 21 OF THE ASSESSEE S PAPER BOOK, WE FIND THAT THE NOTICE WAS GENERATED BY THE COMPUTER SYSTEM ON THE BASIS OF PAN DATABASE HAVING DELHI ADDRESS. THUS, AT THE TIME NOTICE UNDER SECTION 143(2) OF THE ACT WAS ISSUED, THE ASSESSING OFFICER AT NEW DELHI WAS HAVING JURISDICTION OVER THE CASE. SUBSEQUENTLY, ON THE REQUEST OF THE ASSESSEE AND ON SUBMISSION THAT THE PRINCIPAL PLACE OF BUSINESS WAS AT DEHRADUN, THE ASSESSING OFFICER TRANSFERRED THE CASE TO DEHRADU N. FURTHER , WE FIND THAT IN ACCORDA NCE WITH SECTION 129 OF THE ACT , THE SUCCEEDING ASSESSING OFFICER MAY CONTINUE THE PROCEEDING FROM THE STAGE AT WHICH THE PROCEEDING WAS LEFT BY HIS PR EDECESSOR. FOR READY REFERENCE , SECTION 129 OF THE ACT IS REPRODUCED A S UNDER : CHANGE OF INCUMBENT OF AN OFFICE. 129. WHENEVER IN RESPECT OF ANY PROCEEDING UNDER THIS ACT AN INCOME - TAX AUTHORITY CEASES TO EXERCISE JURISDICTION AND IS SUCCEEDED BY ANOTHER WHO HAS AND EXERCISES JURISDICTION, THE INCOME - TAX AUTHORITY SO SUCCEEDING MAY CONTINUE THE PROCEEDING FROM THE STAGE AT WHICH THE PROCEEDING WAS LEFT BY HIS PREDECESSOR : PROVIDED THAT THE ASSESSEE CONCERNED MAY DEMAND THAT BEFORE THE PROCEEDING IS SO CONTINUED THE PREVIOUS PROCEEDING OR ANY PART THEREOF BE REOPENED OR THAT BEFORE ANY ORDER OF ASSESSMENT IS PASSED AGAIN ST HIM, HE BE REHEARD. 16. IN THE CASES OF M/S CLASSIC FLOUR AND FOOD P ROCESSING (P ) LTD . (SUPRA) A ND KRISHAN KUMAR SARAF (SUPRA) , THE ASSESSMENTS UNDER REVISION ARE HELD AS INVALID, WHEREAS IN THE PRESENT CASE THE IMPUGNED ASSESSMENT HAS BEEN HELD AS VALID BY US AND , THEREFORE , THE RATIO OF THE SAID DECISION S IS NOT APPLICABLE IN THE INSTANT CASE . IN THE CASE OF MICRO SPACEMATRIX SOLUTIONS PRIVA TE LIMITED (SUPRA), THE INCOME TAX O FFICER WHO ISSUED NOTICE WAS NOT HAVING TERRITO RIAL JURISDICTION OVER THE CASE , WHEREAS IN THE PRESENT CASE THE INCOME TAX O FFICER, WHO ISSUED THE 10 ITA NO. 2520/DEL/2017 NOTICE WAS HAVING TERRITORIAL JURI SDICTION OVER THE CASE IN TERMS OF SECTION 124 OF THE ACT AT THE RELEVANT PERIOD OF TIME AND , THEREFORE , THE RATIO OF THE SAID DECISION IS NOT APPLI CABLE OVER THE FACTS OF THE INSTANT CASE 17. IN OUR CONSIDERED OPINION, THE ASSESSING OFFICER AT DELHI ASSUMED JURISDICTION IN ACCORDANCE WITH LAW AND THERE IS NO ILLEGALITY IN THE ASSESSMENT ORDER AS FAR AS IS SUE OF NOTICE UNDER SECTION 143 (2) OF THE ACT IS CONCERNED. 18. THE SECOND REASON ON WHICH THE LD. COUNSEL ASSAILED THE ORDER OF THE CIT IS THAT ASSESSING OFFICER EXAMINED THE CLAI M OF DEDUCTION UNDER SECTION 80 IC AND DEALT WITH IT DURING THE COURSE OF ASSESSMENT PROCEEDING AND IN THE ASSESSMENT ORDER AND THAT TOO AFTER CONSIDERING THE FOLLOWING: ( I ) PB 1 - 2E : IS A COPY OF ACKNOWLEDGEMENT OF RETURN AND COMPUTATION OF INCOME FOR THE YEAR UNDER CONSIDERATION ALONGWITH AUDIT REPORT IN FORM NUMBER 10CCB S CERTIFYING THAT THE ASSESSEE COMPANY IS ELIGIBLE FOR DEDUCTION UNDER SECTION 80 IC ( II ) PB 3 - 20: IS A COPY OF TAX AUDIT REPORT TOGETHER ON BALANCE SHEET AND PROFIT AND LOSS ACCOUNT MENTIONING THE NATURE OF BUSINESS OF MANUFACTURING OF MEDICAL DEVICES AND STATING THE CLAIM OF DEDUCTION UNDER SECTION 80 IC AMO UNTING TO RS. 40, 00, 880/ - . ( III ) PB 11: IS QUANTITATIVE DETAIL OF RAW MATERIAL AS WELL AS FINISHED PRODUCTS AS ANNEXURE C OF TAX AUDIT REPORT ( IV ) PB 12: IS THE DETAIL OF RATIOS AS ANNEXURE - D OF TAX AUDIT REPORT SHOWING THAT THE RATIO OF MATERIAL CONSUMED TO F INISHED GOODS IS 85.34 %. 11 ITA NO. 2520/DEL/2017 ( V ) PB 24: IS A COPY OF NOTICE ISSUED UNDER SECTION 142(1) OF THE ACT BY THE ASSESSING OFFICER REQUIRING THE ASSESSEE TO FURNISH INTER ALIA COMPLETE SET OF RETURN, COMPUTATION OF INCOME, ANNUAL REPORT, TAX AUDIT REPORT AND NOTE WITH RESPECT TO BUSINESS AND PROFESSIONAL ACTIVITIES CARRIED OUT BY THE ASSESSEE ( VI ) PB 25 - 26: IS A COPY OF ASSESSEE S LETTER DATED NIL FILED TO ASSESSING OFFICER SUBMITTING THE COPY OF RETURN ALONGWITH COMPUTATION OF INCOME AND TAX AUDIT REPORT ( VII ) PB 31 - 33: IS A COP Y OF ASSESSEE S SUBMISSION DATED NIL FILED TO THE ASSESSING OFFICER SUBMITTING THAT ASSESSEE FIRM MANUFACTURES DRUG ELUTING STENTS ( VIII ) PB 38 - 65: IS A COPY OF LETTER UNDER SECTION 133(6) OF THE ACT ISSUED TO THREE BUYER PARTIES OF THE ASSESSEE AND THERE REPLIE S ( IX ) PB 65 - 138: ARE COPY OF OTHER LETTERS/ INFORMATION FILED BEFORE THE ASSESSING OFFICER TO SUPPORT THAT ASSESSEE MANUFACTURED DRUG ELUTING STENTS. ( X ) PB 139 - 141: IS A COPY OF THE ASSESSMENT ORDER ACCEPTING THE CLAIM OF THE ASSESSEE UNDER SECTION 80 IC OF THE A CT AFTER OBSERVING (PARA 7) THAT IN VIEW OF DETAILS ON VERIFICATION OF SUBMISSIONS MADE BY THE ASSESSEE AND ON THE BASIS OF THE REPORT OF THE INSPECTOR OF INCOME TAX, IT WAS FOUND THAT ASSESSEE FIRM WAS CARRYING ON THE BUSINESS OF MANUFACTURING OF MEDICAL DEVICES. 19. THE LD. COUNSEL SUBMITTED THAT IN VIEW OF THE ABOVE MENTIONED PLEADINGS AND EVIDENCES EXAMINED AND CONSIDERED BY THE ASSESSING OFFICER, THE CLAIM OF DEDU CTION UNDER SECTION 80 IC OF THE ACT WAS EXAMINED IN DETAIL AND , THEREFORE , THE ACTION OF THE LD. CIT IN ASSUMING 12 ITA NO. 2520/DEL/2017 JURISDICTION UNDER 263 OF THE ACT DESERVE TO BE QUASHED. IN SUPPORT, THE LD. COUNSEL PLACED RELIANCE ON FOLLOWING JUDICIAL PRECEDENTS: JAMNA AUTO INDUSTRIES LTD. VS CIT, ITA 495/CHD/2015, DATE OF ORDER 05 - 01 - 2016. (ITAT, CHANDIGARH) PARA 12, PAGE 12 - 13 MAYA GUPTA VS. CIT IN ITA NO. 5701/DEL/2014, DELHI ITAT FINALLY, RESPECTFULLY FOLLOWING THE RATIO LAID DOWN BY JURISDICTIONAL HIGH COURT OF DELHI IN THE CASE OF DG HOUSING (SUPRA), WE ARE OF THE VIEW THAT THE CONCLU SION OF THE AO ON ALL THREE ALLEGED ISSUES WAS SUPPORTED BY REASONABLE AND THE SAME CANNOT BE HELD AS UNSUSTAINABLE AND NOT IN ACCORDANCE WITH LAW. IN THIS SITUATION, INVOKING OF PROVISION OF SECTION 263 OF THE ACT BY ISSUANCE OF NOTICE AND PASSING IMPUGNE D ORDER, DIRECTING THE AO TO REVISIT THE ISSUE AND TO MAKE FURTHER INQUIRY CANNOT BE HELD AS VALID AND IN THIS SITUATION, ACTION OF THE CIT ISSUING NOTICE AND PASSING IMPUGNED ORDER CANNOT BE HELD AS SUSTAINABLE AND VALID AND THE SAME DESERVES TO BE QUASHE D. WE ORDER ACCORDINGLY. DEDUCTION UNDER SECTION 80 HHC - AO HAVING ALLOWED DEDUCTION UNDER SECTION 80 HHC IN RESPECT OF PROFIT ON SALE OF DEPB LICENSE AND ALSO IN RESPECT OF EXPORT INCENTIVE EARNED ON EXPORT MADE THROUGH EXPORT HOUSE IN THE ORDER UNDER S ECTION 143(3) AFTER TAKING ALL THE NECESSARY DETAILS AND AFTER DISCUSSING THE CASE WITH THE REPRESENTATIVE OF THE ASSESSEE, ORDER OF THE AO CANNOT BE HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE CROWN FROZEN FOODS VS. ADDL.CIT 93 TTJ 485 (MUM). ASSESSMENT YEAR 1999 - 2000 - WHETHER WHERE ASSESSEE HAD PLACED ENTIRE RELEVANT MATERIAL AND ASSESSING OFFICER ON EXAMINATION OF SUCH MATERIAL DECIDED AND ALLOWED CLAIM OF ASSESSEE, IT CANNOT BE SAID THAT ORDER OF ASSESSING OFFICER IS ERRONEOUS OR PREJUDICIAL TO INTEREST OF REVENUE MERELY BECAUSE IN ORDER, ELABORATE DISCUSSION IS NOT MADE ON CERTAIN POINTS - HELD, YES - RAM KISHAN PASS V. ITO 149 TAXMAN 55 DEL - (MAG.) REVISION ORDER PREJUDICIAL TO INTERESTS OF REVENUE ASSESSING OFFICER EXAMINING AND CONSIDERING ISSUE BUT NOT MENTIONING IN ASSESSMENT ORDER - ORDER NOT ERRONEOUS INFOSYS 13 ITA NO. 2520/DEL/2017 TECHNOLOGIES LTD. V/S JOINT CIT(ASSESSMENT) - VOL.287 - ITR - 211 (B A NGLOREL (2006) 103 ITD 399 (BANG) 20. T HE LD. COUNSEL FURTHER WITHOUT PREJUDICE TO THE ABOVE ARGUMENTS, SUBMITTED THAT JURISDICTION UNDER SECTION 263 OF THE ACT CAN BE ASSUMED ONLY IN CASE OF ABSENCE OF ENQUIRY BY THE ASSESSING OFFICER AND NO ORDER CAN BE SET - ASIDE BY THE LD. CIT ON THE GROUND THAT AO DID NOT MAKE EN QUIRY AS PER THE SATISFACTION OF THE LD. CIT. IN SUPPORT OF THE CONTENTION THAT LD. COUNSEL RELIED ON THE DECISION DATED 13/04/2017 OF THE TRIBUNAL DELHI BENCH IN THE CASE OF GORAV BHATIA IN ITA NO. 1730/2013. 21. ON THE CONTRARY, LEARNED CIT( DR ) SUBMITT ED THAT AFTER INSERTION OF EXPLANATION - 2 TO SECTION 263 OF THE ACT BY F INANCE ACT , 2015 W.E.F. 01/06/2015, NOW THE ASSESSMENT ORDER PASSED WITHOUT MAKING INQUIRY OR VERIFICATION WHICH SHOULD HAVE BEEN MADE OR PASSED ALLOWING ANY RELIEF WITHOUT ENQUIRING INTO THE CLAIM, SHALL BE DEEMED TO BE ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THUS THE CASES RELIED UPON BY THE COUNSEL OF THE ASSESSEE ARE DISTINGUISHABLE AND NO LONGER APPLICABLE IN THE FACTS OF THE INSTANT CASE. THE LD. CIT ( DR ) SUBMITTED THAT THE ASSESSING OFFICER OUGHT TO HAVE CARRIED OUT INQUIRIES ON THE SUBMISSIONS MADE BY THE ASSESSEE CLAIMING THE ACTIVITY OF THE ASSESSEE AS MANUFACTURING ACTIVITY, BUT HE ACCEPTED THE CLAIM OF THE ASSESSEE EVEN WITHOUT TAKING AUDIT REPORT OF THE CHARTERED ACCOU NTANT IN PRESCRIBED FORM NO. 10 CCB REGARDING CLAI M OF DEDUCTION UNDER SECTION 80 IC OF THE ACT. HE FURTHER SUBMITTED THAT IN THE CASE OF THE ASSESSEE, NOTICE UNDER SECTION 263 OF THE ACT WAS ISSUED ON 30/01/2017 WHICH IS MUCH AFTER IN SERTION OF THE EXPLANATI ON - 2 TO SECTION 263 OF THE ACT , HENCE IT WAS VERY MUCH IN OPERATION DURING RELEVANT PERIOD. HE SUBMITTED THAT ACCORDINGLY, NOT MAKING ENQUIRIES BY THE ASSESSING OFFICER TO EXAMINE THE MANUFACTURING ACTIVITY HAS RENDERED THE ASSESSM ENT ORDER 14 ITA NO. 2520/DEL/2017 AS ERRONEOUS SO AS TO PREJUDICIAL TO THE INTEREST OF THE REVENUE AND THEREFORE LD. CIT WAS JUSTIFIED IN SETTING ASIDE THE SAID ORDER. 22. IN THE REJOINDER, THE LD. COUNSEL OF THE ASSESSEE SUBMITTED THAT EXPLANATION - 2 TO SECTION 263 INSERTED BY THE FINANCE ACT 2015, W.E.F. 01/06/2015 IS A PROSPECTIVE AMENDMENT AS HELD BY THE HYDERABAD BENCH IN THE CASE OF SHANTIKRUPA ESTATE PRIVATE L IMITED VS. ACIT IN ITA NO. 1252/2015 . HE ALSO PLACED RELIANCE ON THE DECISION OF THE TRIBUNAL MUMBAI BENCH DATED 06 /05/2016 IN THE CASE OF NARAYAN TATU RANE VS. I NCOME T AX O FFICER IN ITA NO S . 2690 AND 2691/MUM/2016. 23. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD ON THE ISSUE IN DISPUTE. WE FIND THAT LD. COUNSEL HAS FIRST ARGUED THAT ASSESSMENT WAS COMPLETED AFTER MAKING REQUIRED ENQ UIRIES BY THE ASSESSING OFFICER . THEN, HE ARGUED THAT EVEN IF THE ENQUIRIES WERE INADEQUATE OR NOT SATISFACTORY AS PER THE CIT, THE ASSESSMENT CANNOT BE REVISED IN SUCH CIRCUMSTANCES. HE FURTHER ARGUED THAT THE EXPLANATION - 2 TO SECTION 263 WAS NOT APPLICABLE RETROSPECTIVELY IN THE INSTANT ASSESSMENT YEAR. 24. WE ARE DEALING WITH THE ARGUMENTS OF THE LD. COUNSEL IN REVERSE ORDER . FIRST , WE TAKE UP WHETHER THE EXPLANATION - 2 TO SECTION 263 WAS APPLICABLE IN THE CASE OF THE ASSESSEE OR NOT. 25. IN THE FACTS OF THE CASE, IT IS RELEVANT TO REPRODUCE EXPLANATION - 2 TO SECTION 263 OF THE ACT AS UNDER: EXPLANATION 2. FOR THE PURPOSES OF THIS SECTION, IT IS HEREBY DECLARED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEMED TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDICIAL TO THE INTERESTS OF THE REVENUE, IF, IN THE OPINION OF THE PRINCIPAL COMMISSIONER OR COMMISSIONER, ( A ) THE ORDER IS PASSED WITHOUT MAKING INQUIRIES OR VERIFICATION WHICH SHOULD HAVE BEEN MADE; ( B ) THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT INQUIRING INTO THE CLAIM; 15 ITA NO. 2520/DEL/2017 ( C ) THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH ANY ORDER, DIRECTION OR INSTRUCTION IS SUED BY THE BOARD UNDER SECTION 119 ; OR ( D ) THE ORDER HAS NOT BEEN PASSED IN ACCORDANCE WITH ANY DECISION WHICH IS PREJUDICIAL TO THE ASSESSEE, RENDERED BY THE JURIS DICTIONAL HIGH COURT OR SUPREME COURT IN THE CASE OF THE ASSESSEE OR ANY OTHER PERSON.] (2) NO ORDER SHALL BE MADE UNDER SUB - SECTION (1) AFTER THE EXPIRY OF TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED. (3 ) NOTWITHSTANDING ANYTHING CONTAINED IN SUB - SECTION (2), AN ORDER IN REVISION UNDER THIS SECTION MAY BE PASSED AT ANY TIME IN THE CASE OF AN ORDER WHICH HAS BEEN PASSED IN CONSEQUENCE OF, OR TO GIVE EFFECT TO, ANY FINDING OR DIRECTION CONTAINED IN AN ORDER OF THE APPELLATE TRIBUNAL, NATIONAL TAX TRIBUNAL, THE HIGH COURT OR THE SUPREME COURT. 26. IT IS EVIDENT FROM THE PLAIN READING OF THE ABOVE EXPLANATION THAT THE CASES WHERE THE ASSESSING OFFICER HAS NOT DONE THE ENQUIRIES, WHICH HE OUGHT TO HAVE DONE IN THE CIRCUMSTANCES OF THE CASE, THE ASSESSMENT ORDER IS DEEMED TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THIS PROVISION HAS BEEN INSERTED BY THE FINANCE ACT 2015 W.E.F. 01/06/2015. SINCE IN THE INSTANT CASE THE PROCEEDINGS UNDER SEC TION 263 OF THE ACT HAVE BEEN INITIATED ON 30/01/2017 BY THE COMMISSIONER OF INCOME TAX (I.E. AFTER THE DATE FROM WHICH THE EXPLA NATION HAS BEEN MADE EFFECTIVE), THE ISSUE WHETHER THE OPERATION OF THE EXPLANATION IS RETROSPECTIVE, IS NOT INVOLVED AND , THUS , THE DECISION S IN THE CASE OF SHANTIKRUPA ESTATE PRIVATE L IMITED (SUPRA) AND NARAYAN TATU RANE (SUPRA) ARE NOT APPLICABLE OVER THE FACTS OF THE INSTANT CASE. FURTHER, WE ARE NOT AGREED WITH THE CONTENTION OF THE LD. COUNSEL THAT ASSESSMENT YEAR INVOLVED IN THE CASE IS 2012 - 13 AND , THEREFORE , THE EXPLANATION - 2 CANNOT BE APPLIED RETROSPECTIVELY. BEFORE US, THE PROCEEDING UNDER SECTION 263 OF THE ACT HAS BEEN CHALLENGED AND THE EXPLANATION - 2 IS IN RESPECT OF THE PROCEEDINGS U/S 263 OF THE ACT AND NOT IN RE SPECT OF ASSESSMENT PROCEEDINGS. SINCE THE PROCEEDINGS U/S 263 HAVE BEEN 16 ITA NO. 2520/DEL/2017 INITIATED ON 30/01/2017, IN OUR CONSIDERED OPINION, THE EXPLANATION - 2 OF SECTION 263 OF THE ACT IS OPERATIVE IN THE CASE OF THE ASSESSEE. 27. IN VIEW OF THE SAID EXPLANATION TO SECT ION 263 OF THE ACT, IF THE ASSESSING OFFICER HAS PASSED THE ASSESSMENT ORDER WITHOUT MAKING ENQUIRIES OR VERIFICATION , WHICH OUGHT TO HAVE BEEN MADE, THE ASSESSMENT ORDER IS DEEMED TO BE ERRONEOUS INSOFAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THUS THE DECISION OF GURAV BHATIA (SUPRA) AND OTHER DECISIONS CITED BY THE ASSESSEE HOLDING THAT JURISDICTION UNDER SECTION 263 OF THE ACT CAN BE ASSUMED ONLY IN CASE OF ABSENCE OF ENQUIRY BY THE ASSESSING OFFICER, ARE NOT APPLICABLE OVER THE FACTS OF THE INS TANT CASE. 28. NOW THE ISSUE FOR EXAMI NATION BEFORE US IN THE CASE IS , WHETHER THE ASSESSING OFFICER HAS CARRIED OUT THE ENQUIRY WHICH OUGHT TO HAVE BEEN CARRIED OUT IN THE CIRCUMSTANCES OF THE CASE. THE LEARNED CIT HAS HELD THAT THE PROCESS OF DRUG COAT ING OVER CORONARY STENTS CARRIED OUT BY THE ASSESSEE WAS NOT AMOUNTED TO MANUFACTURING AND THEREFORE THE DEDUCTION UNDER SECTION 80 IC OF THE ACT HAS BEEN WRONGLY ALLOWED. THE LD. CIT HAS OBSERVED THAT THE ASSESSEE EVEN DID NOT FILE THE AUDIT REPORT IN PRES CRIBED FORM 10CCB , ISSUED BY THE CHARTERED ACCOUNTANT IN SUPPORT OF THE CLAI M OF DEDUCTION UNDER SECTION 80 IC OF THE ACT. REGARDING THIS OBSERVATION OF THE LD. CIT T HAT AUDIT REPORT IN FORM NO. 10 CCB WAS NOT FOUND PLACED ON RECORD, AND THUS THE ELIGIBILITY OF ASSESS EE UNDERTAKING UNDER SECTION 80 IC COULD NOT BE ASCERTAINED, THE LD. COUNSEL REFERRED TO PAPER BOOK PAGES 2A - 2E AND SUBMITTED THAT AUDIT REPORT IN FORM NO. 10 CCB WAS FILED ALONG WITH THE RETURN OF INCOME AND THEREFORE OBSERVATION OF THE LD. CIT A RE WITHOUT ANY BASIS. 29. IN OUR OPINION, THE CONTENTION OF THE LD. COUNSEL THAT FORM NO. 10CCB WAS FILED ALONGWITH RETURN OF INCOME, IS NOT CORRECT. ON PERUSAL OF PAGE 1 (ONE) OF THE PAPER BOOK, WE FIND THAT THE RETURN OF INCOME HAS 17 ITA NO. 2520/DEL/2017 BEEN DIGITALLY SIGNE D AND FILED ELECTRONICALLY BY THE ASSESSEE. DURING THE RELEVANT PERIOD, IN TERMS OF CLAUSE 2 OF RULE 12 O F THE INCOME T AX RULES, 1962, THE TAXPAYERS FILING THEIR INCOME TAX RETURNS ELECTRONICALLY WERE NOT REQUIRED TO ENCLOSE ANY PAPERS/DOCUMENTS/REPOR TS WI TH THEIR INCOME TAX R ETURN . IN SUCH CIRCUMSTANCES, IT WAS NOT POSSIBLE FOR THE ASSESSEE TO FILE ELECTRONICALLY THE AUDIT REPORT IN FORM NO. 10 CCB ALONGWITH THE RETURN OF INCOME. THE ASSESSEE HAS FILED COPY OF NOTICE S UNDER SECTION 142(1) OF THE ACT ISSUE D BY THE ASSESSING OFFICER MAKING VARIOUS QUARRIES FROM THE ASSESSEE. THESE NOTICES ARE AVAILABLE ON PAGE 21 AND PAGE 30 OF THE PAPER BOOK. ON PERUSAL OF THESE NOTICES , WE FIND THAT ASSE SSING OFFICER HAS NOWHERE ASKED THE ASSESSEE TO FURNISH THE AUDIT REPO RT IN FORM NO. 10 CCB. THE ASSESSEE HAS ALSO FILED COPY OF SUBMISSIONS MADE TO THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS. THE SUBMISSIONS ARE AVAILA BLE ON PAGES 22 TO 23, 25 TO 26, 31 TO 37, 65 TO 79 , 80 TO 106, 107 TO 127 AND 128 TO 138 OF THE PA PER BOOK. WE FIND THAT MOST OF THESE SUBMISSIONS CLAIMED TO HAVE BEEN FILED ARE NOT DATED AND WITHOUT ANY ACKNOWLEDGEMENT FROM THE OFFICE OF THE ASSESSING OFFICER. ON PERUSAL OF THESE SUBMISSIONS, WE FIND THAT THE ASSESSEE HAS NOWHERE CLAIMED TO HAVE FILED THE AUDIT REPORT IN FORM NO. 10 CCB . THUS THE CLAIM OF THE LD. COUNSEL THAT THE ASSESSEE FILED FORM NO. 10 CCB BEFORE THE ASSESSING OFFICER, IS WITHOUT ANY DOCUMENTARY EVIDENCE AND CANNOT BE ACCEPTED. 30. REGARDING THE OBSERVATION OF THE LD. CIT THAT THE ASSESSEE HAD NOT ENCLOSED THE LIST OF DRUGS MANUFACTURED BY IT AT THE TIME OF FURNISHING ITS LICENSE DATED 04/03/2011 ISSUED BY DRUG LICE NSING AND CONTROLLING AUTHORITY , THE LD. COUNSEL SUBMITTED THAT OBSERVATION OF THE LD. CIT WAS WITHOUT ANY MERIT AND DOES NOT REQUIRE ANY CONSIDERATION OF THE FACTS MORE SO IN VIEW OF THE PLEADINGS AND EVIDENCE ALREADY SUBMITTED WITH ASSESSEE. 18 ITA NO. 2520/DEL/2017 31. I T IS EVIDENT FROM ABOVE ARGUMENTS OF THE LD. COUNSEL T HAT HE FAILED TO REBUT THE FACTUAL INFORMATION OF NON - FILING OF LIST OF INDUSTRIES ALONGWITH THE COPY OF LICENSE ISSUED BY THE DRUG LICENSE AND CONTROLLING AUTHORITY , BEFORE THE ASSESSING OFFICER. 32. IN OUR CONSIDERED OPI NION EXAMINATION OF FORM NO. 10 CC B AND COPY OF LICENSE CERTIFICATE ISSUED BY THE DRUG LICENSE AND CONTROLLING AUTHORITY BY THE ASSESSING OFFICER WAS ABSOLUTELY NECESSARY AND IMPORTANT FOR ALLO WING DEDUCTION UNDER SECTION 80 IC OF THE ACT. WE FURTHER FIND FROM THE RECORD INCLUDING ASSESSEE S PAPER BOOK THAT THE ASSESSEE CLAIMED TO HAVE SUBMITTED INFORMATION RELATED TO ITS ACTIVITY OF DRUG COATING OVER THE CORONARY STENTS AS MANUFACTURING ACTIVITY, BUT THE ASSESSING OFFICER HAS NOT CARRIED OUT ANY ENQUIRY TO EXAMINE WHETHER THE SAID ACTIVITY FALLS UNDER THE MANUFACTURING ACTIVITY AS DEFINED UNDER INCOME - TAX ACT . THUS IN THE FACTS AND CIRCUMSTANCES OF THE CASE, WE ARE OF THE OPINION THAT ASSESSING OFFICER HAS NOT CARRIED OUT THE ENQUIRIES FOR EXAMINING THE MANUFACTURING ACTIVITY OF THE ASSESSEE AND WHICH HE OUGHT TO HAVE CARRIED OUT IN THE CIRCUMSTANCES OF THE CASE. 33. THUS , WE HOLD THAT THE ASSESSMENT ORDER IS DEEMED TO BE ERRONEOUS IN TERMS OF EXPLANATION - 2 TO SECTION 263 OF THE ACT. 34. THE LD. COUNSEL FURTHER, WITHOUT PREJUDICE TO THE EA RLIER ARGUMENTS , SUBMITTED THAT ALLEGED ABSENCE OF FORM 10 CCB AND THE LIST OF THE DRUGS WERE NEVER GROUNDS FOR ISSUING SHOW CAUSE NOTICE UNDER SECTION 263 AND THEREFORE THE ACTION OF THE LD. CIT IN MAKING THIS IS A GROUND FOR REVISION UNDER SECTION 263 IS WITHOUT JURISDICTION AND DESERVE TO BE IGNORED FOR THIS REASON ONLY. IN SUPPORT OF THE CONTENTION , THE LEARNED COUNSEL RELIED ON THE DECISION IN THE CASE OF CIT VS. CONTIMETERS ELECTRICALS PRIVATE LIMITED (2009) 317 ITR 249. 35. THE LD. CIT( DR ), ON THE OT HER HAND , SUBMITTED THAT FORM NO. 10 CCB AND COPY OF LICENSE ARE DOCUMENTS WHICH COULD JUSTIFY THE CLAI M 19 ITA NO. 2520/DEL/2017 OF DEDUCTION UNDER SECTION 80 IC OF TH E ACT. ACCORDINGLY, THE LD. CIT( DR ) SUBMITTED THAT NO NEW ISSUE HAS BEEN RAISED IN THE ORDER UNDER SECTION 263 OF THE ACT, OTHER THAN NON - ELIGIBILIT Y OF DEDUCTION UNDER SECTION 80 IC OF THE ACT AND THEREFORE THE CONTENTION OF THE LD. COUNSEL THAT FORM NO. 10 CCB WAS NOT A GROUND FOR ISSUING SHOW CAUSE UNDER SECTION 263 OF THE ACT IS NOT A VALID ARGUMENT. 36. WE HAVE HEA RD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IN THE C ASE OF CONTIMETERS ELECTRICAL (PVT. ) LTD . (SUPRA) THE HON BLE DELHI HIGH COURT HELD THAT REVISION ON THE ISSUE NOT MENTIONED IN THE SO - CALLED NOTICE IS NOT PERMISSIBLE. THE RELEV ANT FINDING OF THE HON BLE HIGH COURT IS REPRODUCED AS UNDER: THE TRIBUNAL CONSIDERED THE RIVAL CONTENTIONS AND REFERRED TO THE SUPREME COURT S DECISION IN THE CASE OF COMMISSIONER OF CUSTOMS V. TOYO ENGINEERING INDIA LIMITED (2006) 7 SCC 592 WHEREIN THE SUPREME COURT NOTED THAT THE DEPARTMENT CANNOT TRAVEL BEYOND THE SHOW CAUSE NOTICE. THE TRIBUNAL WAS OF THE VIEW THAT THE GROUND THAT THE ASSESSEE HAD NOT FULFILLED THE CONDITIONS LAID DOWN UNDER SECTION 80 - IA DID NOT FORM PART OF THE SHOW CAUSE NOTICE. THE TRIBUNAL ACCEPTED THE ARGUMENT OF THE ASSESSEE THAT THE COMMISSIONER OF INCOME TAX DID NOT EVEN CALL FOR ANY EXPLANATION ON THIS ISSUE AND, THEREFOR E, THE ASSESSEE DID NOT HAVE ANY OPPORTUNITY TO MEET THIS GROUND. THE TRIBUNAL WAS OF THE VIEW THAT IT WOULD BE AGAINST THE PRINCIPLES OF NATURAL JUSTICE THAT A PERSON WHO HAS NOT BEEN CONFRONTED WITH ANY GROUND BE SADDLED WITH THE LIABILITY THEREOF. CONSE QUENTLY THE TRIBUNAL HELD THAT AS THE SAID ISSUE DID NOT FORM PART OF THE SHOW CAUSE NOTICE AND THE ASSESSEE WAS NOT EVEN CONFRONTED WITH IT, EVEN BEFORE THE CIT, IT CANNOT FORM THE BASIS FOR REVISION OF THE ASSESSMENT ORDER UNDER SECTION 263 . 37. IN ABOVE CASE , WHETHER THE ASSESSEE FULFILLED THE CONDI TION LAID DOWN UNDER SECTION 80 IA OF THE ACT, DID NOT FORM PART OF THE SHOW CAUSE NOTICE, WHEREAS IN THE INSTANT CASE IN THE SHOW CAUSE NOTICE ISSUED, THE LD. CIT RAISED THE FACT THAT ELIGIBILIT Y OF DEDUCTION UNDER SECTION 80 IC OF THE ACT REMAIN UNEXAMINED AT THE TIME OF ASSESSMENT. IN OUR OPINION, THE 20 ITA NO. 2520/DEL/2017 AUDIT REPORT UNDER SECTION 10 CCB AND LIST OF INDUSTRIES TO BE ENCLOSED WITH LICENSE CERTIFICATE ISSUED BY T HE DRUG LICENSE AND CONTROLLING AUTHORITY WAS NECESSARY FOR EXAMINATION OF THE CLAI M OF DEDUCTION UNDER SECTION 80 IC OF THE ACT AND THEREFORE NO NEW ISSUE HAS BEEN RAISED BY THE CIT OTHER THAN THE ISSUES RAISED IN THE SHOW CAUSE NOTICE. THE ARGUMENTS OF THE LD. COUNSEL ARE NOT ACCEPTED AND THE DECISION RELIED UPON BY THE LD. COUNSEL IS NOT APPLICABLE OVER THE FACTS OF THE INSTANT CASE. 38. IN VIEW OF THE ABOVE DISCUSSION, WE ARE OF THE OPINION THAT NOT EXAMINING THE ELIGIBILITY OF DEDUCTION UNDER SECTION 80IC OF THE ACT BY THE AO IN THE INSTANT CASE HAD RENDERED THE ORDER OF THE AO NOT ONLY ERRONEOUS BUT ALSO PREJUDI CIAL TO THE INTEREST OF REVENUE, ACCORDINGLY, CIT HAD CORRECTLY INVOKED THE PROVISIONS OF SECTION 263. ACCORDINGLY , THE GROUNDS OF THE APPEAL ARE DISMISSED. 39. IN THE RESULT, APPEAL OF THE ASSESSEE IS DISMISSED. THE DECISION IS PRONOUN CED IN THE OPEN COU RT ON 1 5 T H SEPT. , 201 7 . S D / - S D / - ( I.C. SUDHIR ) ( O.P. KANT ) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED: 1 5 T H SEPTEMBER , 201 7 . RK / - (D.T.D) COPY FORWARDED TO: 1 . APPELLANT 2 . RESPONDENT 3 . CIT 4 . CIT(A) 5 . DR ASST. REGISTRAR, ITAT, NEW DELHI