Win Star Industries Pvt. Ltd., Surat V. The DCIT, Circle- 2(1)(1), Surat

ITA 286/SRT/2018

• Counselvise Citation: [2021] 108 COUNSELVISE.COM (IT) 0998 (ITAT-SURAT)
• Duration Of Justice: 3 year(s) 2 month(s) 26 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-07-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2013-2014
• Appeal Filed On: 16-04-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Principle of natural justice; Competent authority; Assessment record
• Section: 143(3); 11A; 142(1); 80IA; 143(2); 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL, SURAT BENCH, SURAT BEFORE SHRI PAWAN SINGH, JM & DR. A. L. SAINI, AM ./ ITA NO.286/SRT/2018 ( [ [ / ASSESSMENT YEAR: (2013-14) (VIRTUAL COURT HEARING) WIN STAR INDUSTRIES PVT. LTD., 501, WORLD TRADE CENTRE, NEAR UDHNA DARWAJA, RING ROAD, SURAT 395002. V S. THE DEPUTY COMMISSIONER OF INCOME TAX, CIRCLE-2(1)(1), SURAT. ./ ./PAN/GIR NO.: AAACV 7894 G (ASSESSEE) (RESPONDENT) ASSESSEE BY : SHRI HIREN VEPARI - CA RESPONDENT BY : SHRI RITESH MISHRA CIT(DR) / DATE OF HEARING : 18/06/2021 / DATE OF PRONOUNCEMENT : 12/07/2021 / O R D E R PER DR. A. L. SAINI, ACCOUNTANT MEMBER: BY WAY OF THIS APPEAL, THE ASSESSEE HAS CALLED INTO QUESTION CORRECTNESS OF IMPUGNED ORDER PASSED BY THE LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX,(IN SHORT LD.PCIT) UNDER SECTION 263 OF THE INCOME TAX ACT, 1961, IN THE MATTER OF ASSESSMENT UNDER SECTION 143(3) OF THE ACT FOR THE ASSESSMENT YEAR 2013-14, ON THE FOLLOWING GROUNDS: (1) THE PRINCIPAL COMMISSIONER OF INCOME-TAX WAS NOT JUSTIFIED IN ASSUMING JURISDICTION U/S.263 WITHOUT SATISFYING CONDITIONS. (2) THE APPELLANT SUBMITS THAT THE PRINCIPAL COMMISSIONER OF INCOME-TAX INVOKED PROVISIONS OF SECTION 263 ON THE PREMISES THAT THE APPELLANT HAD NOT FILED PROFIT AND LOSS ACCOUNT AND FORM NO.10CCB, PARTICULARLY THEY WERE FILED AND WERE DEMONSTRABLY ON THE RECORD. (3) THE APPELLANT FURTHER SUBMITS THAT THE PRINCIPAL COMMISSIONER OF INCOME TAX DID NOT APPRECIATE THE SETTLED POSITION OF LAW WHERE PROCEEDINGS U/S 263 DO NOT STAND TO SUSTAIN IF PRINCIPAL COMMISSIONER OF INCOME-TAX OPTS TO TAKE DIFFERENT VIEW IN THE SAME MATTER. (4) ON MERITS, THE APPELLANT SUBMITS THAT THE LEARNED PRINCIPAL COMMISSIONER OF INCOME-TAX WAS MISDIRECTED TO HOLD THAT THE ASSESSING OFFICER FAILED TO COMPUTE/DETERMINE THE QUANTUM OF DEDUCTION U/S 80-IA OF THE ACT PARTICULARLY WHEN THE CLAIM OF THE APPELLANT WAS JUSTIFIABLE ALLOWED. PAGE | 2 ITA NO.286/SRT/2018 FOR A.Y. 2013-14 WIN STAR INDUSTRIES PVT. LTD., SURAT (5) THE LEARNED PRINCIPAL COMMISSIONER OF INCOME-TAX WAS DRIVEN BY EXTRANEOUS CONSIDERATION IN NOT DROPPING THE PROCEEDINGS U/S 263. (6) THE APPELLANT CRAVES LEAVE TO ADD, ALTER OR VARY ANY OF THE GROUNDS OF APPEAL. 2. THE RELEVANT MATERIAL FACTS, AS CULLED OUT FROM THE MATERIAL ON RECORD, ARE AS FOLLOWS. ASSESSEE BEFORE US IS A PRIVATE LIMITED COMPANY. THE ASSESSEE IS ENGAGED IN THE BUSINESS OF PROCESSING OF YARN FROM POY TO SIMPLE YARN AND MAKING CRAPE YARN FROM SIMPLE YARN AND GENERATION OF POWER THROUGH WIND MILLS. THE ASSESSEE COMPANY FILED ITS RETURN OF INCOME FOR THE ASSESSMENT YEAR 2013-14 ON 30.09.2013 DECLARING TOTAL INCOME AT RS.52,88,650/-. THE ASSESSEE`S RETURN OF INCOME WAS SELECTED FOR SCRUTINY UNDER SECTION 143(2) OF THE ACT AND ASSESSING OFFICER FRAMED ASSESSMENT UNDER SECTION 143(3) OF THE INCOME TAX ACT 1961, DATED 10.03.2016. THE TOTAL INCOME OF THE ASSESSEE HAS BEEN ASSESSED AT RS.53,76,230/- VIDE ORDER UNDER SECTION 143(3) OF THE ACT, DATED 10.03.2016. 3. LATER, LEARNED PRINCIPAL COMMISSIONER OF INCOME TAX, (IN SHORT LD.PCIT), HAS EXERCISED HIS JURISDICTION UNDER SECTION 263 OF THE ACT. ON VERIFICATION OF ASSESSMENT RECORDS, LD.PCIT NOTICED THAT ASSESSEE HAD CLAIMED DEDUCTION OF RS.74,37,731/- UNDER SECTION 80IA OF THE ACT, ON ACCOUNT OF PROFIT FROM OPERATION OF THE GENERATION OF POWER THROUGH WINDMILL. DURING THE ASSESSMENT YEAR 2013- 14, THE ASSESSEE CLAIMED DEDUCTION UNDER SECTION 80-IA IN RESPECT OF PROFITS DERIVED FROM GENERATION OF POWER FROM WINDMILL UNIT SITUATED AT CHATTAR VILLAGE, KALAWAD TALUKA, JAMNAGAR, DISTRICT, GUJARAT. DATE OF COMMENCEMENT OF UNDERTAKING IS 31.03.2008. INITIAL ASSESSMENT YEAR FOR CLAIM OF DEDUCTION UNDER SECTION 80-IA IS THE ASSESSMENT YEAR 2012-13. IT WAS OBSERVED BY LD PCIT, THAT PROFIT AND LOSS ACCOUNT FOR A.Y. 2013-14 WAS NOT AVAILABLE ON RECORD IN RESPECT OF AFORESAID UNDERTAKING (WINDMILL UNIT). FURTHER, IT WAS ALSO OBSERVED BY LD PCIT THAT THE ASSESSEE HAD NOT FILED THE FORM 10CCB AND RELATED ACCOUNTS OF THE UNDERTAKING ALONG WITH RETURN OF INCOME IN CONTRAVENTION TO PROVISIONS STATED UNDER SECTION 80IA(7) OF THE ACT. HOWEVER, LATER ON, AT THE TIME OF ASSESSMENT PROCEEDINGS, FORM 10CCB WAS FURNISHED BY ASSESSEE. THE LD PCIT ALSO OBSERVED PAGE | 3 ITA NO.286/SRT/2018 FOR A.Y. 2013-14 WIN STAR INDUSTRIES PVT. LTD., SURAT THAT ACCORDING TO SECTION 80IA(5), FOR THE PURPOSE OF DETERMINING, THE QUANTUM OF DEDUCTION UNDER SECTION 80IA(1), ONLY THE SOURCE OF INCOME OF THE TAXPAYER FROM THE ELIGIBLE BUSINESS DURING THE PREVIOUS YEAR RELEVANT TO THE ASSESSMENT YEAR HAD TO BE TAKEN INTO CONSIDERATION. SINCE, YEAR WISE DETAIL OF PROFIT/LOSS FOR ASSESSMENT YEAR 2013-14 IN RESPECT OF ABOVE UNDERTAKING WAS NOT AVAILABLE, THEREFORE, THE CORRECTNESS OF THE CLAIM MADE BY THE ASSESSEE COMPANY COULD NOT BE ASCERTAINED. 4.CONSIDERING THE ABOVE FACTS, LD PCIT HAS ISSUED A SHOW CAUSE NOTICE TO THE ASSESSEE ON 12.03.2018. 5.IN RESPONSE TO THE ABOVE SHOW CAUSE NOTICE, ASSESSEE HAS SUBMITTED REPLY BEFORE THE LD.PR.CIT, WHICH IS REPRODUCED BELOW: (A)... NOW SO FAR AS FILING OF FORM 10CCB IS CONCERNED, IT WAS FILED ON 29-9- 2013 ONLINE SINCE THE NEW MECHANISM OF E-FILING DEMANDS SUCH FORMS TO BE FILED ONLINE. I ATTACH COPY OF DOWNLOADED FORM 10CCB (PAGA NO.8 TO 11A) FROM THE INCOME-TAX WEBSITE. AND, SO FAR AS FILING OF ACCOUNTS ARE CONCERNED, THE POINT HAS ALREADY BEEN STATED IN (A) ABOVE. (B).THE THIRD ISSUE RELATES TO FILING OF YEAR-WISE PROFIT/LOSS. AGAIN, THIS ALWAYS STOOD FILED WITH THE INCOME-TAX. THE ASSESSEE INSTALLED THE WINDMILL IN THE YEAR 2008, AND STARTED CLAIMING RELIEF U/S 80-IA(4)(IV) ONLY W.E.F. A.Y-2012-13 AS THE FIRST YEAR AND THE YEAR, WHICH IS NOW BEING DEALT, BEING THE SECOND YEAR. THIS IS BECAUSE 80-IA(2) GIVES OPTION TO THE ASSESSEE TO CLAIM RELIEF IN TEN CONSECUTIVE YEARS OUT OF FIFTEEN YEARS BEGINNING FROM THE YEAR IN WHICH THE UNDERTAKING BEGINS TO GENERATES POWER. PLEASE FIND YEAR-WISE COPIES OF FORM 10CCB THAT SPECIFIES THE PROFIT FROM THE WINDMILL UNDERTAKINGS. ASSESSMENT YEAR YEAR OF CLAIM FILING OF DATE OF FORM 10CCB THAT STATES THE PROFIT AND THE YEAR OF CLAIM. PAGE REF. 2012-13 1 ST YEAR 17-3-2015 25 2013-14 2ND YEAR 29-9-2013 11A WHAT IS BEING CONVEYED IS THAT WHAT THE ASSESSEE HAS DONE IS COMPLETELY LEGITIMATE AND WITH ASSESSING OFFICER HAVING ACCEPTED FORM 10CCB FILED ONLINE (PAGE NO.8 TO 11A) AS WELL AS HAVING SATISFIED HIMSELF AS PER THE RESPONSE ON THE CLAIM, NO CASE IS BUILT FOR TREATING THE ASSESSMENT ORDER ERRONEOUS. DURING THE COURSE OF ASSESSMENT PROCEEDINGS FOR A.Y.2012-13, THE ASSESSE DID FILE COPY OF FORM NO.10CCB VIDE LETTER NO.TW-2356 OF 16-3-2015 (PAGE NO.25 TO 32). A NOTE TOO IS ATTACHED FOR CLAIM OF DEDUCTION U/S 80IA (PAGE NO.33 TO 36). PAGE | 4 ITA NO.286/SRT/2018 FOR A.Y. 2013-14 WIN STAR INDUSTRIES PVT. LTD., SURAT 4. NOW, THEREFORE, THE POSITION ENVISAGED IN NOTICE U/S 263 IS ONE WHERE PROCEEDINGS ARE INITIATED ON THE PLATFORM (A) ON THE DOUBT THAT DOCUMENTS ARE NOT ON RECORDS WHEN DOCUMENTS HAVE ALREADY BEEN ON RECORDS OF THE DEPARTMENT, OR (B) WHERE THE DOCUMENTS ARE NOT FOUND WHERE THE ASSESSEE WAS NOT MANDATED TO FILE THEM UNDER THE E-FILING REGIME. WITH (I) THE DOCUMENTS NOW SHOWN TO HAVE BEEN FILED AND THE FACT THAT (II) DOCUMENTS NOW ON RECORDS (PAGE NO.L TO 2), THE PROCEEDINGS WOULD NOT HAVE ANY BASE TO SUSTAIN. EVEN OTHERWISE, SECTION 263 ACTION CANNOT BE TAKEN FOR WANT OF VERIFICATION OF DOCUMENTS, AND THE ASSESSMENT ORDER CANNOT BE RENDERED ERRONEOUS PARTICULARLY, THE ASSESSING OFFICER HAS BEEN SATISFIED WITH THE CLAIM U/S 80-IA WITH A SPECIFIC QUERY ON THAT POINT.-------------' 6.THE LD.PR.CIT HAD GONE THROUGH THE ABOVE REPLY OF THE ASSESSEE AND THEN REJECTED THE ARGUMENTS AND CONTENTIONS RAISED IN THIS REPLY OBSERVING AS FOLLOWS:- (I). THE LD.PR.CIT NOTED THAT ASSESSEE HAS MOSTLY DEALT WITH PROCEDURAL ASPECT WHILE CLAIMING DEDUCTION U/S 80IA OF THE INCOME TAX ACT SUCH AS NO REQUIREMENT TO FILE ANNEXURE ETC. WITH RETURN OF INCOME. THE LD.PR.CIT NOTED THE LAW POINT AS ENUMERATED IN SECTION 80IA(5) OF THE I.T. ACT, 1961 AND STATED THAT ASSESSING OFFICER COULD DECIDE UPON THE CLAIM OF DEDUCTION U/S 80IA ONLY UPON POSSESSION OF RELEVANT BOOKS OF ACCOUNTS. IT IS A MATTER OF FACT, UNLIKE PROCEDURAL ASPECT. THE POSITION IS MADE CLEAR FURTHER, IN SECTION 80IA(5) WHICH READ AS FOLLOW:- ' NOTWITHSTANDING ANYTHING CONTAINED IN ANY OTHER PROVISION OF THIS ACT, THE PROFITS AND GAINS OF AN ELIGIBLE BUSINESS TO WHICH THE PROVISION OF SUB SECTION(L) APPLY SHALL, FOR THE PURPOSES OF DETERMINING THE QUANTUM OF DEDUCTION UNDER THAT SUB-SECTION FOR THE ASSESSMENT YEAR IMMEDIATELY SUCCEEDING THE INITIAL ASSESSMENT YEAR OR ANY SUBSEQUENT ASSESSMENT YEAR, BE COMPUTED AS IF SUCH ELIGIBLE BUSINESS WERE THE ONLY SOURCE OF INCOME OF THE ASSESSEE DURING THE PREVIOUS YEAR RELEVANT TO THE INITIAL ASSESSMENT YEAR AND TO EVERY SUBSEQUENT ASSESSMENT YEAR UP TO AND INCLUDING THE ASSESSMENT YEAR FOR WHICH THE DETERMINATION IS TO BE MADE.' SECTION 80IA ALLOWS DEDUCTION EQUAL TO 100% OF THE PROFITS AND GAINS DERIVED FROM SUCH BUSINESS FOR TEN CONSECUTIVE ASSESSMENT YEARS. THIS ALLOWANCE OF DEDUCTION U/S 80IA CASTS HIGHER RESPONSIBILITY ON THE SHOULDER OF ASSESSING OFFICER TO COMPUTE THE CLAIM THOROUGHLY AS IT HAS LARGER REVENUE IMPLICATION. PAGE | 5 ITA NO.286/SRT/2018 FOR A.Y. 2013-14 WIN STAR INDUSTRIES PVT. LTD., SURAT (II).THE AO IN THESE CIRCUMSTANCE CAN COMPUTE THE DEDUCTION ONLY AFTER GOING THROUGH RELEVANT BOOK OF ACCOUNT, PAPER, VOUCHERS, BILLS, EXPENSES PROOF, INCOME PROOF ETC. REQUIRED 7. IN VIEW OF LEGAL POSITION NARRATED ABOVE, THE LD PCIT HELD THAT ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE I. T. ACT. 1961, ON 10.03,2016, IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, AS THE AO FAILED TO COMPUTE/ DETERMINE THE QUANTUM OF DEDUCTION AVAILABLE TO ASSESSEE COMPANY FOR A.Y. 2013-14 DURING THE ASSESSMENT PROCEEDINGS. THE LD PCIT ALSO HELD THAT IN ASSESSEE`S CASE, CLAUSE (A) AND (B) OF THE EXPLANATION 2 OF SECTION 263 OF THE I.TACT, 1961 IS CLEARLY APPLICABLE. THE LD PCIT FOUND THAT THE A.O. HAS PASSED THE ASSESSMENT ORDER WITHOUT MAKING INQUIRIES OR VERIFICATION, WHICH OUGHT TO HAVE BEEN MADE IN THIS CASE. THEREFORE, LD PCIT HAS DIRECTED THE ASSESSING OFFICER TO COMPUTE/DETERMINE THE INCOME OF THE COMPANY FOR A.Y. 2013-14 AFTER THOROUGH VERIFICATION OF FORM NO. 10CCB, PROFIT AND LOSS ACCOUNT, BALANCE SHEET, BILLS, VOUCHERS, INVOICES, PERMISSION OF COMPETENT AUTHORITY TO GENERATE POWER THROUGH WIND MILL AND OTHER RELEVANT DOCUMENTS AS REQUIRED TO CLAIM DEDUCTION U/S 80IA OF THE ACT. 8.AGGRIEVED BY THE ORDER OF LD.PR.CIT, THE ASSESSEE IS IN APPEAL BEFORE US. 9. THE LD.COUNSEL FOR THE ASSESSEE HAS STATED BEFORE US THAT ASSESSEE HAS SUBMITTED EACH ANY EVERY DOCUMENTS DURING THE ASSESSMENT PROCEEDINGS AND THE ASSESSING OFFICER EXAMINED THEM AND FRAME THE ASSESSMENT UNDER SECTION 263 OF THE ACT, THEREFORE ORDER PASSED BY THE ASSESSING OFFICER SHOULD NOT BE ERRONEOUS. THE LD COUNSEL INVITED OUR ATTENTION TO PARA 7 OF ORDER U/S 263 OF THE ACT, WHEREIN THE PRINCIPAL CIT HAS INVOKED ACTION IN THE PRESENT MATTER AS PER CLAUSES (A) AND (B) OF EXPLANATION 2 OF SECTION 263 OF THE ACT. THE LD COUNSEL STATES THAT EXPLANATION 2 OF SECTION 263 OF THE ACT WAS INSERTED BY THE FINANCE ACT 2015, AND THE SURAT BENCH, IN THE CASE OF PRADEEP CHHATRALA (ITA 308/SRT/2019) (PG.59-70 OF PAPER PAGE | 6 ITA NO.286/SRT/2018 FOR A.Y. 2013-14 WIN STAR INDUSTRIES PVT. LTD., SURAT BOOK), HAS HELD THAT INSERTION OF EXPLANATION 2 OF SECTION 263 OF THE ACT, HAVE PROSPECTIVE APPLICATION W.E.F. 01/06/2015. THEREFORE, AS THE PROVISIONS CITED BY THE PRINCIPAL CIT FOR INVOKING ACTION UNDER SECTION 263 OF THE ACT, COME INTO EFFECT SUBSEQUENT TO THE ASSESSMENT YEAR UNDER CONSIDERATION, THEREFORE LD COUNSEL PRAYED THE BENCH THAT THE ORDER OF LD PCIT MAY BE STRUCK DOWN (QUASHED). 10. ON THE OTHER HAND, THE LD.DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE RELIED ON THE ORDER OF LD.PR.CIT, PARTICULARLY PARA NO.5.1 AND 5.2 OF THE LD.PR.CIT, WHICH WE HAVE ALREADY NOTED IN ABOVE PARA AND THE SAME IS NOT BEING REPEATED FOR THE SAKE OF BREVITY. 11. WE HAVE HEARD BOTH THE PARTIES AND CAREFULLY GONE THROUGH THE SUBMISSION PUT FORTH ON BEHALF OF THE ASSESSEE ALONG WITH THE DOCUMENTS FURNISHED AND THE CASE LAWS RELIED UPON, AND PERUSED THE FACT OF THE CASE INCLUDING THE FINDINGS OF THE LD.PCIT AND OTHER MATERIALS BROUGHT ON RECORD. FIRST OF ALL, WE HAVE TO SEE WHETHER THE REQUISITE JURISDICTION NECESSARY TO ASSUME REVISIONAL JURISDICTION IS THERE EXISTING BEFORE THE PR. CIT TO EXERCISE HIS POWER. FOR THAT, WE HAVE TO EXAMINE AS TO WHETHER IN THE FIRST PLACE THE ORDER OF THE ASSESSING OFFICER FOUND FAULT BY THE PRINCIPAL CIT IS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. FOR THAT, LET US TAKE THE GUIDANCE OF JUDICIAL PRECEDENTS LAID DOWN BY THE HONBLE APEX COURT IN MALABAR INDUSTRIES LTD. VS. CIT [2000] 243 ITR 83(SC) WHEREIN THEIR LORDSHIP HAVE HELD THAT TWIN CONDITIONS NEEDS TO BE SATISFIED BEFORE EXERCISING REVISIONAL JURISDICTION U/S 263 OF THE ACT BY THE CIT. THE TWIN CONDITIONS ARE THAT THE ORDER OF THE ASSESSING OFFICER MUST BE ERRONEOUS AND SO FAR AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. IN THE FOLLOWING CIRCUMSTANCES, THE ORDER OF THE AO CAN BE HELD TO BE ERRONEOUS ORDER, THAT IS (I) IF THE ASSESSING OFFICERS ORDER WAS PASSED ON INCORRECT ASSUMPTION OF FACT; OR (II) INCORRECT APPLICATION OF LAW; OR (III)ASSESSING OFFICERS ORDER IS IN VIOLATION OF THE PRINCIPLE OF NATURAL JUSTICE; OR (IV) IF THE ORDER IS PASSED BY THE ASSESSING OFFICER WITHOUT APPLICATION OF MIND; (V) IF THE AO HAS NOT INVESTIGATED THE ISSUE BEFORE HIM; THEN THE ORDER PASSED BY THE ASSESSING OFFICER CAN BE TERMED AS ERRONEOUS ORDER. COMING NEXT TO THE SECOND PAGE | 7 ITA NO.286/SRT/2018 FOR A.Y. 2013-14 WIN STAR INDUSTRIES PVT. LTD., SURAT LIMB, WHICH IS REQUIRED TO BE EXAMINED AS TO WHETHER THE ACTIONS OF THE AO CAN BE TERMED AS PREJUDICIAL TO THE INTEREST OF REVENUE. WHEN THIS ASPECT IS EXAMINED ONE HAS TO UNDERSTAND WHAT IS PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE HONBLE SUPREME COURT IN THE CASE OF MALABAR INDUSTRIES (SUPRA) HELD THAT THIS PHRASE I.E. PREJUDICIAL TO THE INTEREST OF THE REVENUE HAS TO BE READ IN CONJUNCTION WITH AN ERRONEOUS ORDER PASSED BY THE ASSESSING OFFICER. THEIR LORDSHIP HELD THAT IT HAS TO BE REMEMBERED THAT EVERY LOSS OF REVENUE AS A CONSEQUENCE OF AN ORDER OF ASSESSING OFFICER CANNOT BE TREATED AS PREJUDICIAL TO THE INTEREST OF THE REVENUE. WHEN THE ASSESSING OFFICER ADOPTED ONE OF THE COURSES PERMISSIBLE IN LAW AND IT HAS RESULTED IN LOSS TO THE REVENUE, OR WHERE TWO VIEWS ARE POSSIBLE AND THE ASSESSING OFFICER HAS TAKEN ONE VIEW WITH WHICH THE CIT DOES NOT AGREE, IT CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUDICIAL TO THE INTEREST OF THE REVENUE UNLESS THE VIEW TAKEN BY THE ASSESSING OFFICER IS UNSUSTAINABLE IN LAW. 12. WE NOTE THAT IN THE ASSESSMENT ORDER FRAMED UNDER SECTION 143(3) OF THE ACT, THE DATE OF ORDER IS MENTIONED AS, 18.03.2016( AS MENTIONED BY ASSESSING OFFICER), HOWEVER, LD PCIT IN HIS ORDER UNDER SECTION 263 OF THE ACT HAS STATED THE ASSESSMENT ORDER DATE AS 10.03.2016. THIS IS TYPOGRAPHICAL ERROR AND DOES NOT HAVE IMPACT ON OUR ADJUDICATION. 13. TAKING NOTE OF THE AFORESAID DICTUM OF LAW LAID DOWN BY THE HONBLE APEX COURT, NOTED BY US IN PARA NO.11 OF THIS ORDER, LET US EXAMINE WHETHER ORDER PASSED BY THE ASSESSING OFFICER U/S 143(3) OF THE I. T. ACT. 1961, DATED 10.03,2016, IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. WE NOTE THAT LD PRINCIPAL CIT HAS RAISED THE FOLLOWING ISSUES IN HIS 263 ORDER, WHICH ARE AS FOLLOWS: (1).[PARA 3 OF PCIT ORDER] DETAILS OF PROFIT AND LOSS ACCOUNT FOR ASSESSMENT YEAR 2013-14 WAS NOT AVAILABLE ON RECORD IN RESPECT OF AFORESAID UNDERTAKING (WINDMILL UNIT) . PAGE | 8 ITA NO.286/SRT/2018 FOR A.Y. 2013-14 WIN STAR INDUSTRIES PVT. LTD., SURAT (2).[PARA 3 OF PCIT ORDER] THE ASSESSEE HAD NOT FILED FORM 10CCB AND RELATED ACCOUNTS OF THE UNDERTAKING (WINDMILL UNIT) ALONG WITH THE RETURN OF INCOME IN CONTRAVENTION OF PROVISIONS STATED IN SECTION 80IA(7) OF THE ACT. (3).[PARA 3 OF PCIT ORDER] SINCE THE YEAR-WISE DETAILS OF PROFIT AND LOSS ACCOUNT FOR ASSESSMENT YEAR 2013-14 IN RESPECT OF ABOVE UNDERTAKING (WINDMILL UNIT) WAS NOT AVAILABLE ON THE RECORDS, HENCE THE CORRECTNESS OF THE CLAIM IS NOT ASCERTAINED. (4).[PARA 5.4 OF PCIT ORDER] THE AO IN THESE CIRCUMSTANCE CAN COMPUTE THE DEDUCTION ONLY AFTER GOING THROUGH RELEVANT BOOK OF ACCOUNT, PAPER, VOUCHERS, BILLS EXPENSES PROOF, INCOME PROOF ETC. REQUIRED. 14. NOW, WE SHALL EXAMINE, ONE BY ONE, IN RESPECT OF ABOVE ISSUES RAISED BY THE LD PCIT IN HIS 263 ORDER, TO KNOW WHETHER ORDER PASSED BY THE ASSESSING OFFICER IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. (1).[PARA 3 OF PCIT ORDER] DETAILS OF PROFIT AND LOSS ACCOUNT FOR ASSESSMENT YEAR 2013-14 WAS NOT AVAILABLE ON RECORD IN RESPECT OF AFORESAID UNDERTAKING (WINDMILL UNIT). REPLY OF LD COUNSEL IN RESPECT OF THE ABOVE ISSUE IS AS FOLLOWS: INCOME STATEMENT WAS NOT FURNISHED AT THIS STAGE BECAUSE AS PER CBDT CIRCULARS NO.03/2009 DT. 21/05/2009 (PG.29- 32) AND NO.09/2006 DT.10/10/2006 (PG.33-35), IN THE E-FILING REGIME, FILING OF PROFIT & LOSS ACCOUNT (INCLUDING THOSE OF UNDERTAKINGS) AS AN ANNEXURE TO E-RETURNS AND E-FORMS IS NOT REQUIRED. WE NOTE THAT IN RESPONSE TO THE NOTICE UNDER SECTION 142(1) OF THE ACT, THE ASSESSEE HAS REPLIED THE SPECIFIC QUESTION ASKED BY THE ASSESSING OFFICER ABOUT THE WIND MILL, VIDE ASSESSEE`S REPLY DATED 26.11.2015, TO THE LD.ASSESSING OFFICER, WHICH IS PLACED AT PAPER BOOK PAGE 52. THE RELEVANT REPLY GIVEN BY THE ASSESSEE THROUGH LETTER DATED 26.11.2015 IS MENTIONED IN POINT NO.13 OF ASSESSEES LETTER WHICH IS REPRODUCED BELOW: PAGE | 9 ITA NO.286/SRT/2018 FOR A.Y. 2013-14 WIN STAR INDUSTRIES PVT. LTD., SURAT 13. WE ARE ENCLOSING STATEMENT SHOWING DETAILS OF INCOME EARNED AND EXPENSES INCURRED DURING THE YEAR FROM WIND MILLS INSTALLED IN F.Y. 2007-08 AND 2011-12. THUS, WE NOTE THAT DURING THE ASSESSMENT PROCEEDINGS, THE LD.ASSESSING OFFICER HAS RAISED THE QUESTION/QUERY AND THE ASSESSEE HAS REPLIED THAT QUERY. THE ASSESSEE HAS SUBMITTED BEFORE THE AO, THE DETAILS OF INCOME EARNED AND EXPENSES INCURRED DURING THE YEAR FROM WIND MILLS. THEREAFTER, THE ASSESSING OFFICER HAS EXAMINED THE DETAILS AND DOCUMENTS SUBMITTED BY THE ASSESSEE, THEREFORE, ADEQUATE ENQUIRY HAS BEEN MADE BY THE ASSESSING OFFICER, HENCE ORDER PASSED BY THE ASSESSING OFFICER IS NOT ERRONEOUS. (2).[PARA 3 OF PCIT ORDER] THE ASSESSEE HAD NOT FILED FORM 10CCB AND RELATED ACCOUNTS OF THE UNDERTAKING (WINDMILL UNIT) ALONG WITH THE RETURN OF INCOME IN CONTRAVENTION OF PROVISIONS STATED IN SECTION 80IA(7) OF THE ACT. WE NOTE THAT ASSESSEE HAS SUBMITTED FORM 10CCB BY WAY OF E-FILED ON 29/09/2013 VIDE E-ACK 803471551290913 (PG.18-22), THEREFORE, ASSESSING OFFICER HAS EXAMINED IT. (3).[PARA 3 OF PCIT ORDER] SINCE THE YEAR-WISE DETAILS OF PROFIT AND LOSS ACCOUNT FOR ASSESSMENT YEAR 2013-14 IN RESPECT OF ABOVE UNDERTAKING (WINDMILL UNIT) WAS NOT AVAILABLE ON THE RECORDS, HENCE THE CORRECTNESS OF THE CLAIM IS NOT ASCERTAINED. WE NOTE THAT YEAR-WISE DETAILS WAS AVAILABLE BEFORE THE ASSESSING OFFICER. (4).[PARA 5.4 OF PCIT ORDER] THE AO IN THESE CIRCUMSTANCE CAN COMPUTE THE DEDUCTION ONLY AFTER GOING THROUGH RELEVANT BOOK OF ACCOUNT, PAPER, VOUCHERS, BILLS EXPENSES PROOF, INCOME PROOF ETC. REQUIRED. WE NOTE THAT COMPLETE DETAILS OF INCOME AND EXPENSE SEGMENT WERE AVAILABLE BEFORE ASSESSING OFFICER. HENCE ORDER PASSED BY THE ASSESSING OFFICER IS NOT ERRONEOUS. PAGE | 10 ITA NO.286/SRT/2018 FOR A.Y. 2013-14 WIN STAR INDUSTRIES PVT. LTD., SURAT 15. WE NOTE THAT THERE IS DIFFERENCE BETWEEN LACK OF ENQUIRY AND INADEQUATE ENQUIRY. IT IS FOR THE ASSESSING OFFICER TO DECIDE THE EXTENT OF ENQUIRY TO BE MADE AS IT IS HIS SATISFACTION AS WHAT IS REQUIRED UNDER LAW. IN THIS REGARD THE RELIANCE IS PLACED ON THE DECISION OF CIT V. SUNBEAM AUTO LTD. [(2010) 332 ITR 167], WHEREIN HONBLE DELHI HIGH COURT HAS HELD THAT IF THERE WAS ANY INQUIRY, EVEN INADEQUATE, THAT WOULD NOT BY ITSELF, GIVE OCCASION TO THE COMMISSIONER TO PASS ORDER U/S 263 OF THE ACT, MERELY BECAUSE THE COMMISSIONER HAS A DIFFERENT OPINION IN THE MATTER AND THAT ONLY IN CASES WHERE THERE IS NO ENQUIRY, THE POWER U/S 263 OF THE ACT CAN BE EXERCISED. THE LD. PCIT CANNOT PASS THE ORDER U/S 263 OF THE ACT ON THE GROUND THAT FURTHER/THOROUGH ENQUIRY SHOULD HAVE BEEN MADE BY ASSESSING OFFICER. IN THE ASSESSEE`S INSTANT CASE, WE NOTE THAT ASSESSING OFFICER HAS RAISED THE QUERY AND THE ASSESSEE HAS REPLIED THAT QUERY, THEREFORE, THE ASSESSING OFFICER WOULD HAVE EXAMINED THE RELEVANT ISSUES. HENCE, ORDER PASSED BY THE ASSESSING OFFICER IS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF REVENUE.THEREFORE, IN OUR OPINION, THE REASON (ISSUES) ADVANCED BY THE LD PCIT, AS NOTED BY US IN ABOVE PARA NO.14 OF THIS ORDER, TO TREAT THE ASSESSMENT ORDER, AS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, IS DEVOID OF MERIT AND DOES NOT DESERVE TO BE AFFIRMED. WE HOLD SO AND THEREFORE WE QUASH THE ORDER PASSED BY THE LD PCIT UNDER SECTION 263 OF THE ACT. 16. IN THE RESULT, APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER IS PRONOUNCED ON 12/07/2021 BY PLACING RESULT ON NOTICE BOARD. SD/- SD/- SD/- (PAWAN SINGH) (DR. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER SURAT / / DATE: 12/07/2021 / SGR TRUE COPY COPY OF THE ORDER FORWARDED TO 1. THE ASSESSEE 2. THE RESPONDENT 3. THE CIT(A) 4. PR.CIT PAGE | 11 ITA NO.286/SRT/2018 FOR A.Y. 2013-14 WIN STAR INDUSTRIES PVT. LTD., SURAT 5. DR/AR, ITAT, SURAT 6. GUARD FILE BY ORDER / / TRUE COPY / / ASSISTANT REGISTRAR/SR. PS/PS ITAT, SURAT