TATA SONS LTD, MUMBAI V. JCIT SP. RG-1, MUMBAI

ITA 3463/MUM/2009

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 88101 (ITAT-MUMBAI)
• Duration Of Justice: 5 year(s) 8 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-02-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: E
• Next Hearing Date: 16-12-2014
• Assessment Year: 1993-1994
• Appeal Filed On: 27-05-2009
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: MANJUNATHA SWAMY
• Assessee Lawyers: DINESH VYAS
• Keywords: Business income; Double taxation relief; Period of limitation; Reason to believe; Reassessment proceedings
• Section: 143(3); 147; 263; 154

Judgement Text

, , , , , ,, , , IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCHES E, MUMBAI , , ! BEFORE SHRI JOGINDER SINGH, JUDICIAL MEMBER, AND SHRI RAJENDRA, ACCOUNTANT MEMBER ITA NO.3462, 3463 AND 3465/MUM/2009 ASSESSMENT YEARS:1992-93, 1993-94 AND 1995-96 M/S TATA SONS LIMITED, BOMBAY HOUSE, HOMI MODY STREET, MUMBAI-400001 ' ' ' ' / VS. ACIT2(3), ROOM NO.557, AAYAKAR BHAVAN, M.K.ROAD, MUMBAI - 400020 ( ' %&' /ASSESSEE) ( / REVENUE) P.A. NO.AAACT4060A ' %&' ( ) ( ) ( ) ( ) / // / ASSESSEE BY): SHRI DINESH VYAS ( ) ( ) ( ) ( ) / REVENUE BY SHRI MANJUNATHA SWAMY CIT - DR ' ( '* / / / / DATE OF HEARING : 03/02/2015 +,- ( '* / DATE OF PRONOUNCEMENT : 03/02/2015 . . . . ( '* /DATE OF ORDER 04 /02/2015 . . . . / / / / O R D E R PER JOGINDER SINGH (JUDICIAL MEMBER) : THIS BUNCH OF THREE APPEALS IS BY THE ASSESSEE, ON IDENTICAL GROUNDS, CHALLENGING THE ORDER OF THE LD. LD. COMMI SSIONER OF INCOME TAX (APPEALS) FOR DIFFERENT ASSESSMENT YEARS , WHICH ARE REPRODUCED HEREUNDER:- M/S TATA SONS LIMITED . 2 ITA NO. 3462/MUM/2009, (AY-1992-93) 1) PROCEEDINGS U/S.263 BAD IN LAW: A) THE COMMISSIONER OF INCOME-TAX 2 ('CIT') ERRED I N NOT CONSIDERING THE APPELLANT'S CONTENTION THAT WHERE T WO VIEWS ARE POSSIBLE FOR THE ALLOWABILITY OF RELIEF OF DOUBLE I NCOME TAX PAID, THE SAID RELIEF CANNOT BE TREATED AS ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE AND HENCE THE PROCEEDI NGS UNDER SECTION 263 INCOME-TAX ACT, 1961 ('THE ACT') ARE BA D IN LAW. B) THE CIT ERRED IN NOT CONSIDERING THE APPELLANT'S CONTENTION THAT THE RELIEF OF DOUBLE INCOME TAX CANNOT BE THE SUBJE CT MATTER OF A REVIEW IN ACCORDANCE WITH EXPLANATION (C) UNDER SEC TION 263(1) OF THE ACT AS THE SAID RELIEF HAS BEEN THE SUBJECT MAT TER OF AN APPEAL AND THE SAME WAS CONSIDERED AND DECIDED BY T HE COMMISSIONER OF INCOME-TAX (APPEALS) - 1. C) THE CIT ERRED IN NOT CONSIDERING THE APPELLANT'S CONTENTION THAT SINCE THE RELIEF OF DOUBLE INCOME TAX PAID WAS NOT THE SUBJECT MATTER OF APPEAL BEFORE THE INCOME TAX APPELLATE TR IBUNAL, THE DOCTRINE OF MERGER WITH RESPECT TO THE SAID RELIEF WILL NOT APPLY. HENCE THE REVISION UNDER SECTION 263 OF THE ACT CAN ONLY BE INITIATED AGAINST THE ORDER GIVING EFFECT TO THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) - I DATED 29 M ARCH 1996. D) THE CIT ERRED IN NOT CONSIDERING THE APPELLANT'S CONTENTION THAT THE REVISION WITH RESPECT TO THE RELIEF OF DOUBLE I NCOME TAX PAID, IS BARRED BY LIMITATION IN ACCORDANCE WITH THE PROV ISIONS OF SECTION 263(2) OF THE ACT AND, THEREFORE, IS BAD IN LAW. 2) RELIEF OF DOUBLE INCOME TAX PAID: M/S TATA SONS LIMITED . 3 THE CIT ERRED IN CONCLUDING THAT THE ENTIRE PROFIT ARISING OUT OF OVERSEAS ACTIVITIES HAS BEEN ALLOWED AS A DEDUCTION UNDER SECTIONS 80HHE & 80HHB OF THE ACT AND, THEREFORE, T HE APPELLANT WILL NOT BE ALLOWED RELIEF OF DOUBLE TAXATION AMOUN TING TO RS.1,97,27,995. ITA NO. 3463/MUM/2009 (A.Y.1993-1994) 1) PROCEEDINGS U/S.263 BAD IN LAW: A) THE COMMISSIONER OF INCOME-TAX 2 ('CIT') ERRED I N NOT CONSIDERING THE APPELLANT'S CONTENTION THAT WHERE T WO VIEWS ARE POSSIBLE FOR COMPUTING THE DEDUCTION UNDER SECTION 80HHE OF THE INCOME-TAX ACT 1961 ('THE ACT') AND THE ALLOWABILIT Y OF RELIEF OF DOUBLE INCOME TAX PAID, AND THE AO HAS TAKEN ONE VI EW, THE SAME CANNOT BE TREATED AS AN ERRONEOUS ORDER PREJUD ICIAL TO THE INTERESTS OF THE REVENUE AND HENCE THE PROCEEDINGS UNDER SECTION 263 OF THE ACT ARE BAD IN LAW. B) THE CIT ERRED IN NOT CONSIDERING THAT THE DEDUCT ION U/S.80HHE OF THE ACT AND THE RELIEF OF DOUBLE INCOM E TAX CANNOT BE THE SUBJECT MATTER OF A REVIEW IN ACCORDA NCE WITH EXPLANATION (C) U/S.263(1) OF THE ACT AS THE SAID D EDUCTION/RELIEF HAVE BEEN THE SUBJECT MATTER OF AN APPEAL AND THE S AME WERE CONSIDERED AND DECIDED BY THE CIT(A)-XXXIII. C) THE CIT ERRED IN NOT CONSIDERING THE APPELLANT'S CONTENTION THAT SINCE THE RELIEF OF DOUBLE INCOME TAX PAID WAS NOT THE SUBJECT MATTER OF APPEAL BEFORE THE INCOME TAX APPELLATE TR IBUNAL, THE DOCTRINE OF MERGER WITH RESPECT TO THE SAID RELIEF WILL NOT APPLY. HENCE THE REVISION UNDER SECTION 263 OF THE ACT CAN ONLY BE INITIATED AGAINST THE ORDER GIVING EFFECT TO THE OR DER OF THE COMMISSIONER OF INCOME-TAX (APPEALS) - XXXIII DATED 6 OCTOBER 2003. M/S TATA SONS LIMITED . 4 D) THE CIT ERRED IN NOT CONSIDERING THE APPELLANT'S CONTENTION THAT THE REVISION WITH RESPECT TO THE RELIEF OF DOUBLE I NCOME TAX PAID, IS BARRED BY LIMITATION IN ACCORDANCE WITH THE PROV ISIONS OF SECTION 263(2) OF THE ACT AND, THEREFORE, IS BAD IN LAW. 2) COMPUTATION OF DEDUCTION UNDER SECTION 80HHE. A) THE CIT ERRED IN CONCLUDING THAT THAT THE 'PROFI TS OF THE BUSINESS DERIVED FROM THE COMPUTER SOFTWARE BUSINES S' FOR THE PURPOSE OF COMPUTING THE DEDUCTION UNDER SECTION 80 HHE OF THE ACT IS THE PROFITS AND GAINS OF BUSINESS & PROFESSI ON OF THE COMPANY AS A WHOLE. THE CIT ERRED IN NOT CONSIDERING THE APPELLANT'S CO NTENTION THAT THE DEDUCTION UNDER SECTION 80HHE OF THE ACT IS ALL OWED WITH RESPECT TO THE PROFITS OF THE BUSINESS OF EXPORT OU T OF INDIA OF COMPUTER SOFTWARE. THEREFORE ONLY THE PROFITS OF TH E COMPUTER SOFTWARE BUSINESS OF THE APPELLANT SHOULD BE CONSID ERED FOR THE COMPUTATION OF THE DEDUCTION UNDER SECTION 80HHE OF THE ACT. B) THE CIT ERRED IN DIRECTING THE AO TO RECOMPUTE T HE DEDUCTION U/S.80HHE OF THE ACT, BY REVIEWING THE AMOUNT OF PR OFITS OF BUSINESS, EXPORT TURNOVER AND TOTAL TURNOVER, EVEN THOUGH THE QUANTUM OF EXPORT TURNOVER AND TOTAL TURNOVER WERE NOT THE SUBJECT MATTER OF REVIEW U/S.263 OF THE ACT. 3) RELIEF OF DOUBLE INCOME TAX PAID. THE CIT ERRED IN CONCLUDING THAT THE ENTIRE PROFIT ARISING OUT OF OVERSEAS ACTIVITIES HAS BEEN ALLOWED AS A DEDUCTION UNDER SECTIONS 80HHE & 80HHB OF THE ACT AND, THEREFORE, T HE APPELLANT WILL NOT BE ALLOWED RELIEF OF DOUBLE TAXATION AMOUN TING TO RS.187,04,008. ITA NO. 3465/MUM/2009 (A. Y.1995-1996) 1) PROCEEDINGS U/S.263 BAD IN LAW: M/S TATA SONS LIMITED . 5 A) THE COMMISSIONER OF INCOME-TAX 2 ('CIT') ERRED I N NOT CONSIDERING THE APPELLANT'S CONTENTION THAT WHERE T WO VIEWS ARE POSSIBLE FOR THE ALLOWABILITY OF DOUBLE TAXATION RE LIEF, THE SAID RELIEF CANNOT BE TREATED AS ERRONEOUS AND PREJUDICI AL TO THE INTERESTS OF THE REVENUE AND HENCE THE PROCEEDINGS UNDER SECTION 263 INCOME-TAX ACT 1961 ('THE ACT') ARE BAD IN LAW. B) THE CIT ERRED IN NOT CONSIDERING THE APPELLANT'S CONTENTION THAT SINCE THE DOUBLE TAXATION RELIEF OF RS.5,87 ,68,291 WAS NEITHER THE SUBJECT MATTER OF APPEAL BEFORE THE COMMISSIONE R OF INCOME- TAX (APPEALS) NOR BEFORE INCOME TAX APPELLATE TRIBU NAL, THE DOCTRINE OF MERGER WITH RESPECT TO THE SAID RELIEF WILL NOT APPLY. HENCE THE REVISION UNDER SECTION 263 OF THE ACT CAN ONLY BE INITIATED AGAINST THE ORDER UNDER SECTION 143(3) OF THE ACT DATED 5 MARCH 1998, WHEN THE DOUBLE TAXATION RELIEF OFRS. 5,87,68,291 WAS FIRST GRANTED TO THE APPELLANT. C) THE CIT ERRED IN NOT CONSIDERING THE APPELLANT'S CONTENTION THAT THE REVISION WITH RESPECT TO THE DOUBLE TAXATION RE LIEF IS BARRED BY LIMITATION IN ACCORDANCE WITH THE PROVISIONS OF SECTION 263(2) OF THE ACT AND, THEREFORE, IS BAD IN LAW. 2) DOUBLE TAXATION RELIEF. A) THE CIT ERRED IN CONCLUDING THAT THAT THE DOUBLE TAXATION RELIEF AMOUNTING TO RS.5,87,68,291 GRANTED TO THE A PPELLANT WAS NOT CORRECT ON THE BASIS THAT DEDUCTION HAD BEEN GR ANTED FOR THE ENTIRE OVERSEAS PROFITS WERE CLAIMED AS A DEDUCTION FROM TAX UNDER SECTION 80-0 OF THE ACT. THE CIT ERRED IN NOT CONSIDERING THE APPELLANT'S CO NTENTION THAT THE DEDUCTION UNDER SECTION 80-0 OF THE ACT IS ALLO WED OF AN AMOUNT EQUAL TO FIFTY PERCENT OF THE INCOME RECEIVE D IN CONVERTIBLE FOREIGN CURRENCY. THEREFORE, DEDUCTION HAS NOT BEEN CLAIMED FOR THE ENTIRE OVERSEAS PROFITS UNDER SECTION 80-0 OF T HE ACT. M/S TATA SONS LIMITED . 6 2. DURING HEARING OF THESE APPEALS, SHRI DINESH VY AS,LD. SENIOR ADVOCATE, CONTENDED THAT THE IMPUGNED ISSUES ARE COVERED BY THE DECISION OF THE TRIBUNAL, IN THE CAS E OF ASSESSEE ITSELF FOR ASSESSMENT YEAR 1994-95 (ITA NO.3464/MUM /2009) ORDER DATED 29/04/2011 AND ITA NO. 3461/MUM/2009 FO R ASSESSMENT YEAR 1990-91 VIDE ORDER DATED 28 TH JANUARY, 2011. THIS FACTUAL MATRIX WAS NOT CONTROVERTED BY SHRI MA NJUNATHA SWAMY, LD. CIT-DR. HOWEVER, MR. SWAMY MERELY DEFEN DED THE CONCLUSION ARRIVED AT IN THE RESPECTIVE IMPUGNED OR DER. 2.1. WE HAVE CONSIDERED THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL AVAILABLE ON RECORD. SINCE, T HE ISSUES/FACTS ARE COMMON/IDENTICAL, THEREFORE, THESE APPEALS ARE BEING DISPOSED OFF BY A COMMON AND CONSOLIDATED ORDER FOR THE SAKE OF BREVITY. THE FIRST COMMON GROUND RAISED IN THESE AP PEALS PERTAINS TO CHALLENGING THE PROCEEDINGS U/S 263 OF THE INCOME TAX ACT, 1961 (HEREINAFTER THE ACT) BY ASSERTING TH AT WHERE TWO VIEWS ARE POSSIBLE FOR ALLOWABILITY OF RELIEF OF DO UBLE INCOME TAX PAID, THE ASSESSMENT ORDER CANNOT BE TREATED AS ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. ANOTHE R ARGUMENT ADVANCED BY LD. COUNSEL IS THAT THE IMPUGNED ORDERS ARE HIT BY LIMITATION AS THE ORDERS ARE DATED 30/03/2009. WE FIND THAT THE RETURN WAS FILED BY THE ASSESSEE ON 27/12/1992 AND THE ASSESSMENT ORDER U/S 143(3) OF THE ACT WAS PASSED O N 30/03/1995. THUS, AS PER SECTION 263(2) OF THE ACT , THE LIMIT FOR INVOKING THE REVISIONAL JURISDICTION U/S 263 END AF TER 31 ST MARCH, 1998. 2.2. WE FIND THAT THE ISSUE OF LIMITATION HAS ALREA DY BEEN DISPOSED OFF BY THE CO-ORDINATE BENCH IN THE CASE O F ASSESSEE M/S TATA SONS LIMITED . 7 ITSELF VIDE ORDER DATED 29/04/2011 (ITA NO.3464/MUM /2009) THAT TOO AFTER FOLLOWING THE DECISION FROM HONBLE JURISDICTIONAL HIGH COURT IN ASHOK BUILDCON LTD. VS CIT & ANRS. (2 010) 325 ITR 574 (BOM.), WHEREIN, THE HONBLE HIGH COURT HELD AS UNDER:- HELD : WHERE AN ASSESSMENT HAS BEEN REOPENED UNDER S. 147 IN RELATION TO A PARTICULAR GROUND OR IN RELATI ON TO CERTAIN SPECIFIED GROUNDS AND, SUBSEQUENT TO THE PA SSING OF THE ORDER OF REASSESSMENT, THE JURISDICTION UNDE R S. 263 IS SOUGHT TO BE EXERCISED WITH REFERENCE TO ISSUES WHICH DO NOT FORM THE SUBJECT OF THE REOPENING OF THE ASSESS MENT OR THE ORDER OF REASSESSMENT, THE PERIOD OF LIMITATION PROVIDED FOR IN SUB-S. (2) OF S. 263 WOULD COMMENCE FROM THE DATE OF THE ORDER OF ASSESSMENT AND NOT FROM THE DATE ON WH ICH THE ORDER REOPENING THE REASSESSMENT HAS BEEN PASSE D. THE ORDER OF ASSESSMENT CANNOT BE REGARDED AS BEING SUBSUMED WITHIN THE ORDER OF REASSESSMENT IN RESPEC T OF THOSE ITEMS WHICH DO NOT FORM PART OF THE ORDER OF REASSESSMENT. WHERE A REASSESSMENT HAS BEEN MADE PURSUANT TO A NOTICE UNDER S. 148, THE ORDER OF REASSESSMENT PREVAILS IN RESPECT OF THOSE ITEMS WHI CH FORM PART OF REASSESSMENT. ON ITEMS WHICH DO NOT FORM PA RT OF THE REASSESSMENT, THE ORIGINAL ASSESSMENT CONTINUES TO HOLD THE FIELD. WHEN THE AO REOPENS AN ASSESSMENT O N A PARTICULAR ISSUE, IT IS OPEN TO HIM TO MAKE A REASS ESSMENT ON THAT ISSUE AS WELL AS IN RESPECT OF OTHER ISSUES WHICH SUBSEQUENTLY COME TO HIS NOTICE DURING THE COURSE O F THE PROCEEDINGS UNDER S. 147. THE SUBMISSION OF THE REV ENUE THAT BY NOT PASSING AN ORDER OF REASSESSMENT IN RES PECT OF OTHER INDEPENDENT ISSUES, THE ORDER OF THE AO CAN B E CONSTRUED TO BE ERRONEOUS AND TO BE PREJUDICIAL TO THE INTEREST OF THE REVENUE WITHIN THE MEANING OF S. 26 3 CANNOT BE ACCEPTED IN THE FACTS OF THE PRESENT CASE . THE M/S TATA SONS LIMITED . 8 SUBSTANTIVE PART OF S. 147 AS WELL AS EXPLN. 3 ENAB LES THE AO TO ASSESS OR REASSESS INCOME CHARGEABLE TO TAX W HICH HE HAS REASON TO BELIEVE HAD ESCAPED ASSESSMENT AND OTHER INCOME WHICH HAS ESCAPED ASSESSMENT AND WHICH COMES TO HIS NOTICE SUBSEQUENTLY IN THE COURSE OF T HE PROCEEDINGS UNDER THE SECTION. THERE IS NOTHING ON THE RECORD OF THE PRESENT CASE TO INDICATE THAT THERE W AS ANY OTHER INCOME WHICH HAD COME TO THE NOTICE OF THE AO AS HAVING ESCAPED ASSESSMENT IN THE COURSE OF THE PROCEEDINGS UNDER S. 147 AND WHEN HE PASSED THE ORD ER OF REASSESSMENT. THE CIT, WHEN HE EXERCISED HIS JURISD ICTION UNDER S. 263, IN THE FACTS OF THE PRESENT CASE, WAS UNDER A BAR OF LIMITATION SINCE LIMITATION WOULD BEGIN TO R UN FROM THE DATE ON WHICH THE ORIGINAL ORDER OF ASSESSMENT WAS PASSED. THE BAR OF LIMITATION IN THIS CASE ARISES B ECAUSE THE REVISIONAL JURISDICTION UNDER S. 263 IS SOUGHT TO BE EXERCISED IN RESPECT OF ISSUES WHICH DID NOT FORM T HE SUBJECT-MATTER OF THE REASSESSMENT PROCEEDINGS UNDE R S. 143(3) R/W S. 147. IN RESPECT OF THOSE ISSUES, LIMI TATION WOULD COMMENCE WITH REFERENCE TO THE ORIGINAL ORDER OF ASSESSMENT. IF THE EXERCISE OF THE REVISIONAL JURIS DICTION UNDER S. 263 WAS TO BE IN RESPECT OF ISSUES WHICH F ORMED THE SUBJECT-MATTER OF THE REASSESSMENT, AFTER THE O RIGINAL ASSESSMENT WAS REOPENED, THE COMMENCEMENT OF LIMITA TION WOULD BE WITH REFERENCE TO THE ORDER OF REASSESSMEN T. THE PRESENT CASE DOES NOT FALL IN THAT CATEGORY.CIT VS . ALAGENDRAN FINANCE LTD. (2007) 211 CTR (SC) 69 : (2 007) 293 ITR 1 (SC) FOLLOWED; ITO VS. K.L. SRIHARI (HUF) & ORS. (2002) 176 CTR (SC) 99 : (2001) 118 TAXMAN 890 (SC) DISTINGUISHED. 2.3. SIMILAR ISSUE ALSO CAME UP BEFORE ANOTHER CO-O RDINATE BENCH, WHEREIN, ORDER IN ITA NO.3461/MUM/2009 VIDE ORDER DATED 20/01/2011, BY FOLLOWING THE DECISION FROM HO NBLE APEX M/S TATA SONS LIMITED . 9 COURT IN CIT VS ALAGENDRAN FINANCE LTD. (2007) 293 ITR 1 (SC) AND ALSO THE DECISION FROM THE HONBLE JURISDICTION AL HIGH COURT IN ASHOK BUILDCON LTD. (SUPRA) QUASHED THE ORDER U/ S 263 OF THE ACT PASSED BY THE LD. COMMISSIONER. THE RELEVANT P ORTION OF THE SAME IS REPRODUCED HEREUNDER FOR READY REFERENCE:- 2. THE FACTS AND CIRCUMSTANCES UNDER WHICH THE OR DER U/S.263 OF THE ACT WAS PASSED BY THE LEARNED CIT ARE AS FOL LOWS:- THE ASSESSEE IS A COMPANY WHICH IS ENGAGED IN THE BUSIN ESS OF FINANCE, INVESTMENT AND CONSULTANCY ETC. FOR ASSESSMENT YEAR 1990-91 THE RETURN OF INCOME WAS FILED ON 31.12.1990 DECLARING INCOME OF RS.62,66,588/-. THE ASSESSING OFFICER COMPLETED THE ASSESSMENT BY HIS ORDER DATED 10.03.1993. IN THIS ORDER THE INCOM E OF THE ASSESSEE UNDER THE HEAD INCOME FROM BUSINESS WAS DETERMINED BY THE ASSESSING OFFICER AT SUM OF RS.4,97,38,504/- . THE GROSS TOTAL INCOME OF THE ASSESSEE WAS DETERMINED AT SUM OF RS. 11,33,53,911/- . THE DEDUCTION UNDER CHAPTER-VIA OF THE ACT WAS DE TERMINED AS FOLLOWS:- DEDUCTION UNDER CHAPTER VI A I) U/S.80 G 2,95,125 II) U/S.80M 2,96,99,157 III) U/S.80-O 1,84,76,240 4,84,70,522 3. UNDER SECTION- 80A(2) OF THE ACT, THE AGGREGATE AMOUNT OF DEDUCTION UNDER CHAPTER VIA OF THE ACT SHOULD NOT IN ANY CASE EXCEED THE GROSS TOTAL INCOME OF THE ASSESSEE. SEC.80-AB P ROVIDES AS FOLLOWS: DEDUCTIONS TO BE MADE WITH REFERENCE TO THE INCOME INCLUDED IN THE GROSS TOTAL INCOME. M/S TATA SONS LIMITED . 10 80AB. WHERE ANY DEDUCTION IS REQUIRED TO BE MADE OR ALLO WED UNDER ANY SECTION INCLUDED IN THIS CHAPTER UNDER THE HEAD ING C.DEDUCTIONS IN RESPECT OF CERTAIN INCOMES IN RESPECT OF ANY IN COME OF THE NATURE SPECIFIED IN THAT SECTION WHICH IS INCLUDED IN THE GROSS TOTAL INCOME OF THE ASSESSEE, THEN, NOTWITHSTANDING ANYTHING CONTAI NED IN THAT SECTION, FOR THE PURPOSE OF COMPUTING THE DEDUCTION UNDER TH AT SECTION, THE AMOUNT OF INCOME OF THAT NATURE AS COMPUTED IN ACCO RDANCE WITH THE PROVISIONS OF THIS ACT (BEFORE MAKING ANY DEDUCTION UNDER THIS CHAPTER) SHALL ALONE BE DEEMED TO BE THE AMOUNT OF INCOME OF THAT NATURE WHICH IS DERIVED OR RECEIVED BY THE ASSESSEE AND WHICH IS IN CLUDED IN HIS GROSS TOTAL INCOME. 4. IT CAN BE SEEN FROM THE AFORESAID COMPUTATION OF TOTAL INCOME DONE BY THE AO THAT THE DEDUCTION UNDER CHAPTER V IA WAS L ESS THAN THE INCOME COMPUTED UNDER THE HEAD INCOME FROM BUSINESS. THE ASSESSEE FILED AN APPEAL AGAINST THE ORDER OF THE ASSESSING OFFICER. THE LEARNED CIT(APPEALS)33, MUMBAI BY AN ORDER DATED 20.08.200 0 GAVE CERTAIN RELIEF TO THE ASSESSEE. THE AO PASSED AN ORDER DATE D 06.10.2003 GIVING EFFECT TO THE RELIEF ALLOWED BY THE LEARNED CIT(APP EALS). IN THIS ORDER THE AO DETERMINED THE INCOME OF THE ASSESSEE FROM BUSIN ESS AT RS.1,64,92,652/-. THE GROSS TOTAL INCOME WAS DETERM INED AT RS.7,16,69,565/-. THE DEDUCTION IN CHAPTER VI-A WAS DETERMINED AS FOLLOWS:- DEDUCTION UNDER CHAPTER VI A I) U/S.80 G 2,95,125 II) U/S.80HHB 2,93,439 III) U/S.80M(80% OF [5,79,37,039 84,38,494] 2,96,9 9,157 IV) U/S.80-O (ORIGINAL [1,84,76,240 + 62,43,684] 2,47,19,92 4 5,50,07,645 M/S TATA SONS LIMITED . 11 REVISED TOTAL INCOME 1,66,61,920 ============ 5. FURTHER APPEAL HAD BEEN PREFERRED BEFORE THE HON BLE ITAT AGAINST THE ORDER DATED 20.08.2000 OF LEARNED CIT(A PPEALS) -23, MUMBAI. THE TRIBUNAL PASSED AN ORDER IN ITA NO.5742/MUM/2002 DATED 20.06.2006. THE ASSESSING OF FICER PASSED AN ORDER DATED 04.12.2006 GIVING EFFECT TO T HE AFORESAID ORDER OF THE ITAT. IN THIS ORDER, THE AO HAD DETERM INED THE INCOME UNDER THE HEAD INCOME FROM BUSINESS AT RS. 81,63,115/- AND THE GROSS TOTAL INCOME WAS DETERMINED AT RS.5,6 8,35,909/-. THE DEDUCTION UNDER CHAPTER IVA WAS DETERMINED AS FOLLOWS:- DEDUCTION UNDER CHAPTER VI A I) U/S.80 G 2,95,125 II) U/S.80M 2,96,99,157 III) U/S.80-O 81,63,115 3,81,57,397 1,86,78,512 6. AS CAN BE SEEN FROM THE AFORESAID ORDER OF TH E AO DATED 04.12.2006, THE ASSESSING OFFICER HAS RESTRIC TED THE DEDUCTION U/S.80-O TO THE EXTENT OF INCOME UNDER TH E HEAD INCOME FROM BUSINESS. THE ASSESSEE WAS AGGRIEVED BY THE A FORESAID ORDER OF THE ASSESSING OFFICER AND HE, THEREFORE, FILED A N APPLICATION U/S.154 OF THE ACT DATED 15.12.2006. IN THIS APPLIC ATION U/S.154 OF THE ACT, THE ASSESSEE POINTED OUT THAT THE ASSESSIN G OFFICER BY HIS ORDER DATED 06.10.2003 WHILE GIVING THE EFFECT TO T HE ORDER OF THE LEARNED CIT(APPEALS)33 MUMBAI DATED 20.08.2000 HAS ALREADY COMPUTED THE DEDUCTION U/S.80-O AT RS.2,47,19,924/- . THE ASSESSEE FURTHER BROUGHT TO THE NOTICE OF THE ASSESSING OFFI CER THAT THE ITAT IN THE APPEAL AGAINST THE ORDER OF THE LEARNED CIT( APPEALS) DATED 20/8/2000 HAD NOT GIVEN ANY DIRECTIONS WITH REGARD TO THE CLAIM OF DEDUCTION U/S.80-O OF THE ACT NOR ANY DIRECTION WIT H REGARD TO THE M/S TATA SONS LIMITED . 12 DEDUCTION TO BE ALLOWED UNDER CHAPTER-VI-A OF THE A CT VIS--VIS- GROSS TOTAL INCOME OR INCOME UNDER THE HEAD INCOME FROM BUSINESS. IT WAS THE PLEA OF THE ASSESSEE THAT THE QUESTION OF DETERMINING THE QUANTUM OF DEDUCTION U/S.80-O OF TH E ACT, WAS NEVER SUBJECT MATTER OF APPEAL BEFORE ITAT AND THER EFORE CAN NEVER BE CONSIDERED BY THE AO WHILE GIVING EFFECT T O THE ORDER OF THE TRIBUNAL. THE ASSESSING OFFICER ON CONSIDERING THE ABOVE APPLICATION OF THE ASSESSEE FOUND THAT THE CLAIM MA DE BY THE ASSESSEE WAS CORRECT AND HE, THEREFORE, RECTIFIED H IS ORDER BY DETERMINING THE DEDUCTION U/S.80-O OF THE ACT AT RS .2,47,19,924/- BY HIS ORDER U/S.154 OF THE ACT, DATED 20-02-2007. THE ASSESSEE HAD ALSO FILED AN APPEAL AGAINST THE ORDER DATED 4- 12-2006 WHEREBY THE ASSESSING OFFICER GAVE EFFECT TO THE DI RECTIONS OF THE ITAT ORDER DATED 20.06.2006. THE APPEAL WAS FILED O N 02.01.2007. BY THE TIME THE APPEAL WAS HEARD BY THE LEARNED CIT (APPEALS), THE ASSESSING OFFICER HAD ALREADY PASSED ORDER U/S.154 OF THE ACT ON 20.02.2007 WHEREBY HE RECTIFIED THE MISTAKE IN THE AMOUNT OF DEDUCTION TO BE ALLOWED U/S.80-O OF THE ACT. THE AS SESSEE THEREFORE, DID NOT PRESS ADJUDICATION OF ITS GRIEVA NCE BEFORE THE LEARNED CIT(APPEALS) AND, THEREFORE, THE LEARNED CI T(APPEALS) DISMISSED THE GRIEVANCE OF THE ASSESSEE AS NOT PRES SED. THIS ORDER BY THE LEARNED CIT(APPEALS) WAS PASSED ON 26.10.200 7. 7. THE LEARNED CIT IN EXCISE OF HIS POWER U/S.263 OF THE ACT WAS OF THE VIEW THAT THE ORDER DATED 20.02.2007 PASSED U/S.154 OF THE ACT WHEREBY THE AO DETERMINED THE DEDUCTION U/S.80-O OF THE ACT AT RS.2,47,19,924/- WAS ERRONEOUS AND PREJU DICIAL TO THE INTEREST OF THE REVENUE. HE WAS OF THE VIEW THAT TH E DEDUCTION U/S.80-O AND 80HHB OF THE ACT HAD TO BE RESTRICTED TO THE INCOME OF THE ASSESSEE UNDER THE HEAD INCOME FROM BUSINES S. ACCORDING M/S TATA SONS LIMITED . 13 TO THE LEARNED CIT THE ACTION OF THE ASSESSING OFFI CER WHILE PASSING THE ORDER U/S.154 WAS AGAINST THE PROVISION S OF SECTION 80AB OF THE ACT. HE, THEREFORE, ISSUED AN SHOW CAUS E NOTICE U/S.263 OF THE ACT CALLING UPON THE ASSESSEE TO SHO W CAUSE, AS TO WHY THE ORDER DATED 20.02.2007 BE NOT REVISED, AS I T WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 8. THE ASSESSEE IN ITS REPLY TO THE SHOW CAUSE NO TICE SUBMITTED THAT THE AO PASSED AN ORDER DATED 06.10.2 003 GIVING EFFECT TO THE ORDER OF LEARNED CIT(APPEALS) DATED 2 0.08.2000. IN THAT ORDER THE AO DID NOT RESTRICT THE DEDUCTION U/ S.80-O AND 80HHB TO THE EXTENT OF THE INCOME COMPUTED UNDER TH E HEAD INCOME FROM BUSINESS. ACCORDING TO THE ASSESSEE T HIS WAS THE STAGE AT WHICH THE LEARNED CIT IN EXERCISE OF POWER S U/S.263, COULD HAVE INTERFERED WITH THE ORDER OF THE AO. THE TIME WITHIN WHICH THE LEARNED CIT COULD HAVE DONE SO U/S.263 WAS TWO YEAR S FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER OUGHT TO BE REVISED WAS PASSED. IT WAS THE SUBMISSION OF THE ASSESSEE T HAT THE LEARNED CIT BY SEEKING TO REVISE THE ORDER DATED 20.02.2007 HAS VIRTUALLY REVISED THE ORDER DATED 06.10.2003 OF THE AO. BY DO ING SO, THE LEARNED CIT IS TRYING TO GET OVER THE BAR OF LIMITA TION. IT WAS SUBMITTED THAT WHAT CANNOT BE DONE DIRECTLY CANNOT BE INDIRECTLY BY THE CIT. ANOTHER SUBMISSION OF THE ASSESSEE WAS THA T IN TERMS OF SECTION 80A(2), THE DEDUCTION UNDER CHAPTER-VIA OF THE ACT, CANNOT EXCEED THE GROSS TOTAL INCOME AND THERE IS N O PROVISION TO RESTRICT DEDUCTION UNDER CHAPTER-VI-A OF THE ACT, T O INCOME UNDER THE HEAD INCOME FROM BUSINESS. ALTERNATIVELY, IT WAS SUBMITTED THAT THERE WERE TWO VIEWS POSSIBLE ON THE ISSUE AND , THEREFORE, THE JURISDICTION U/S.263 CANNOT BE INVOKED. IN THIS REG ARD, IT WAS POINTED OUT THAT THE PROVISION U/S.80AB OF THE ACT, ON WHICH THE M/S TATA SONS LIMITED . 14 CIT HAD PLACED RELIANCE WAS APPLICABLE ONLY WHILE D ETERMINING THE NATURE OF INCOME THAT IS ENTITLED TO DEDUCTION UNDE R CHAPTER-VIA OF THE ACT AND NO LIMITS WITH REGARD TO THE QUANTUM OF DEDUCTION TO BE ALLOWED UNDER ANY PROVISIONS CONTAINED IN CHAPTER V I-A OF THE ACT, CAN BE READ INTO THE PROVISIONS OF SEC.80-AB O F THE ACT. 9. THE LEARNED CIT, HOWEVER, DID NOT AGREE WITH TH E SUBMISSION OF THE ASSESSEE FOR THE FOLLOWING REASON S:- I HAVE GIVEN MY EARNEST CONSIDERATION TO THE CONTE NTIONS RAISED BY THE ASSESSEE AND I MUST STATE THAT THESE ARE NOT ACCEPTABLE FOR THE REASONS STATED BELOW: THE ORDER DATED 04.12.2006 IS ONE THAT GIVES EFFEC T TO THE ITATS ORDER DATED 20.06.2006. IN THIS ORDER THE BUSINESS INCOME OF THE ASSESSEE HAS BEEN RECOMPUTED AT RS.81,63,115/- AFTE R TAKING INTO ACCOUNT THE VARIOUS RELIEFS GRANTED BY THE ITAT. I N GIVING EFFECT TO AN APPELLATE ORDER, IT IS THE DUTY OF THE ASSESSING OFFICER NOT ONLY TO ALLOW THE SPECIFIC RELIEFS GRANTED BY THE APPEL LATE AUTHORITY, BUT ALSO TO CARRY OUT CONSEQUENTIAL MODIFICATIONS IN TH E COMPUTATION OF INCOME NECESSITATED BY THE APPELLATE FINDING BEARIN G IN MIND ALL THE RELEVANT PROVISION OF THE I.T. ACT. THIS POINT CAN BE ILLUSTRATED WITH REFERENCE TO THE PRESENT CASE. SINCE BY THE OR DER DATED 04.12.2006, THE BUSINESS INCOME OF THE ASSESSEE HAS BEEN REDUCED TO RS.81,63,115/-, ALLOWANCE OF THE DEDUCTIONS UNDE R SECTION 80-O AND 80HHB, THE ALLOWANCE OF WHICH DEPEND ON THE QUA NTUM OF BUSINESS INCOME, NEEDED TO BE RECONSIDERED IN VIEW OF THE PROVISIONS OF SECTION 80 AB. THIS IS WHAT THE ASSES SING OFFICER HAS DONE. HE HAS CORRECTLY GIVEN EFFECT TO THE ORDERS O F THE ITAT BY REGULATING THE DEDUCTION U/S.80-O AND 80HHB TAKING INTO ACCOUNT THE RECOMPUTED BUSINESS INCOME. IT IS SIGNIFICANT T O NOTE THAT THE ASSESSING OFFICER HAS NOT INTERFERED WITH THE COMPU TATION OF M/S TATA SONS LIMITED . 15 DEDUCTIONS UNDER SECTIONS-80-0 AT RS.2,47,19,924/- AND U/S.80 HHB OF RS.2,93,439/-. THIS HAS CAUSED PREJUDICE TO THE REVENUE IN THE SENSE THAT EXCESSIVE DEDUCTIONS UNDER THESE SEC TIONS HAVE BEEN GRANTED. THEREFORE, THE MISTAKE TO BE CORRECTED U/S .263 HAS BEEN COMMITTED BY THE AO IN THE ORDER DATED 20.02.2007. THE LIMITATION FOR REVISION OF THIS ORDER EXPIRES ONLY BY 31.03.20 09 IN TERMS OF SECTION 263(2). HENCE THE ASSESSEES OBJECTION TO T HE REVISIONS BASED ON LIMITATION DESERVED TO BE REJECTED. IT IS ALSO TO BE MENTIONED IN THIS CONNECTION THAT THE RATIO OF THE SUPREME COURT DECISION IN THE CASE OF CIT VS. ALAGE NDRAN FINANCE LTD. (293 ITR 1) AND THAT OF RAJASTHAN H.C IN THE CASE OF CIT VS. HEMRAJ UDYOG (259 ITR 240) CANNOT BE APPLIE D TO THE CASE OF THE ASSESSEE AS THE FACTS OBTAINING IN THESE CAS ES AND THAT OF THE ASSESSEE ARE QUITE DISTINGUISHABLE. THERE IS ALSO NO MERIT IN THE CONTENTION OF THE ASS ESSEE THAT SECTION 80 AB CANNOT BE INVOKED TO RESTRICT THE DEDUCTIONS U/S.80-0 AND 80 HHB TO THE BUSINESS INCOME. SECTION 8 AB STIPULATES THAT DEDUCTIONS UNDER CHAPTER VI-A ARE TO BE MADE WITH R EFERENCE TO THE INCOMES OF THE NATURE ENTITLING THE DEDUCTIONS INCLUDED IN THE GROSS TOTAL INCOME. THE DEDUCTIONS U/S.80-0 AND 80 HHB ARE TO BE ALLOWED WITH REFERENCE TO INCOMES BY WAY OF TECHNIC AL SERVICE FEES AND PROJECT EXPORTS BROUGHT TO INDIA FROM OUTSIDE. BOTH KINDS OF INCOME ARE ASSESSABLE UNDER THE HEAD BUSINESS. SUCH BEGIN THE POSITION, SECTION 80 AB DOES NOT PERMIT THE ALLOWAN CE OF ANY AMOUNT IN EXCESS OF THE BUSINESS INCOME INCLUDED IN THE GROSS TOTAL INCOME. THERE IS ALSO NO MERIT IN THE ARGUMENT OF THE ASSES SEE THAT SINCE ON THE APPLICABILITY OF SECTION 80 AB IN RESTRICTING T HE DEDUCTION U/S.80-0 AND 80 HHB TO THE BUSINESS INCOME, TWO VIE WS ARE M/S TATA SONS LIMITED . 16 POSSIBLE, THE CIT IS PRECLUDED FROM INVOKING HIS PO WERS U/S.263 IN VIEW OF THE RATIO OF THE SUPREME COURT DECISION IN THE CASE OF MALABAR INDUSTRIES CO. LTD. VS. CIT (243 ITR 83), A S THERE CANNOT BE TWO PLAUSIBLE VIEWS ON THIS ISSUE. IN THE LIGHT OF THE FOREGOING DISCUSSION IT IS HELD THAT THE ORDER DATED 20.02.20 07 IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND THER E IS NOTHING ON FACT OR IN LAW BARRING THE CIT FROM EXERCISING HIS JURISDICTION U/S.263 IF THE I.T, ACT. HENCE THE ORDER DATED 20-0 2-2007 IS SET ASIDE. THE A.O. IS DIRECTED TO PASS A FRESH ORDER R ESTRICTING THE DEDUCTIONS U/S.80-0 AND 80 HHB TO THE BUSINESS INCO ME INCLUDED IN THE GROSS TOTAL INCOME. 10. AGGRIEVED BY THE ORDER U/S.263, THE ASSESSEE HA S PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 11. WE HAVE HEARD THE RIVAL SUBMISSIONS. THE LEARNE D COUNSEL FOR THE ASSESSEE SUBMITTED THAT IN THE ORDER OF ASSESSM ENT U/S.143(3) DATED 10-3-1993, THE AO DETERMINED THE DEDUCTION U/ S.80-O AT RS.1,84,76,240 AND DID NOT ALLOW DEDUCTION U/S.80-H HB OF THE ACT. WHILE COMPUTING TOTAL INCOME IN THE ORDER OF ASSESS MENT DATED 10- 3-1993, THE INCOME UNDER THE HEAD INCOME FROM BUSI NESS WAS ONLY RS.4,97,38,504, WHEREAS THE GROSS TOTAL INCOME WAS RS.11,33,53,911 AND THE DEDUCTIONS UNDER CHAPTER VI -A OF THE ACT, WAS RS.4,84,70,522. SINCE THE DEDUCTIONS UNDER CHAP TER VI-A OF THE ACT WAS LESS THAN THE INCOME UNDER THE HEAD IN COME FROM BUSINESS, THE AO DID NOT HAVE ANY OCCASION TO EXAM INE THE QUESTION WHETHER DEDUCTION UNDER ANY SECTIONS OF CH APTER-VI-A OF THE ACT, HAD TO BE RESTRICTED TO THE INCOME UNDER T HE HEAD INCOME FROM BUSINESS BECAUSE OF THE PROVISIONS OF SEC.80- AB OF THE ACT, OR IT IS ONLY THE OVERALL CEILING OF DEDUCTION UNDE R SEC.80-A(2) THAT HAS TO BE SEEN. IN THE APPEAL AGAINST THE SAID ORDE R OF ASSESSMENT M/S TATA SONS LIMITED . 17 DEDUCTION U/S.80-O AND 80-HHB OF THE ACT, WAS DIREC TED TO BE ALLOWED AT RS.2,96,99,157 AND RS.2,93,439/- RESPECT IVELY. IN THE ORDER DATED 06.10.2003 PASSED BY THE AO TO GIVE EFF ECT TO THE ORDER OF CIT(A)-XXXIII, MUMBAI, DATED 20.08.2000, HE HAD DETERMINED THE DEDUCTION U/S.80-O AND 80- HHB AT RS.2,96,99,15 7 AND RS.2,93,439/- RESPECTIVELY AND DID NOT THINK IT FIT TO RESTRICT THE DEDUCTION U/S.80-O AND 80-HHB TO THE INCOME UNDER T HE HEAD INCOME FROM BUSINESS WHICH WAS DETERMINED IN THE VERY SAME ORDER AT RS.1,64,92,652. IT WAS CONTENDED THAT THE GRIEVANCE PROJECTED BY THE CIT IN THE ORDER U/S.263 CAN HOLD GOOD ONLY WITH REGARD TO THIS ORDER BECAUSE THIS IS THE FIRST POIN T OF TIME WHEN THE AO COULD HAVE AND OUGHT TO HAVE APPLIED HIS MIND TO THE QUESTION WHETHER DEDUCTION UNDER ANY SECTIONS OF CHAPTER-VIA OF THE ACT, HAD TO BE RESTRICTED TO THE INCOME UNDER THE HEAD INCOME FROM BUSINESS BECAUSE OF THE PROVISIONS OF SEC.80-AB OF THE ACT, OR IT IS ONLY THE OVERALL CEILING OF DEDUCTION UNDER SEC.80- A(2) THAT HAS TO BE SEEN. IF AT ALL, IT IS THIS ORDER WHICH COULD BE SAID TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. IT WAS SUBMITTED BY HIM THAT THE ORDER DATED 4-12-2006 MER ELY GAVE EFFECT TO THE ORDER OF THE ITAT DATED 20.06.2006 IN WHICH THIS ISSUE COULD NOT HAVE BEEN EXAMINED BY THE AO. IT WAS SUBMITTED THAT THE ISSUE BEFORE THE ITAT WERE TOTALLY DIFFERENT AND HAD NOTH ING TO DO WITH THE QUESTION AS TO WHETHER DEDUCTION UNDER ANY SECT IONS OF CHAPTER-VI-A OF THE ACT, HAD TO BE RESTRICTED TO TH E INCOME UNDER THE HEAD INCOME FROM BUSINESS BECAUSE OF THE PROV ISIONS OF SEC.80-AB OF THE ACT, OR IT IS ONLY THE OVERALL CEI LING OF DEDUCTION UNDER SEC.80-A(2) THAT HAS TO BE SEEN. SINCE THE IS SUES DEALT WITH IN THE ORDER DATED 06.10.2003 AND 20.02.2007 WERE D IFFERENT, THERE WOULD BE NO QUESTION OF THE ORDER DATED 06.10.2003 MERGING WITH M/S TATA SONS LIMITED . 18 THE ORDER DATED 4-12-2006. THEREFORE THE ORDER U/S. 154 OF THE ACT DATED 20/2/2007 MODIFYING THE ORDER DATED 4/12/2006 WAS NOT ERRONEOUS AND THEREFORE THE CIT COULD NOT REVISE TH E SAID ORDER IN EXERCISE OF HIS POWERS U/S.263 OF THE ACT. IT WAS H IS FURTHER SUBMISSION THAT THE CIT EXERCISED JURISDICTION U/S. 263 BY ORDER DATED 30.03.2009. THE PERIOD OF LIMITATION FOR EXER CISING JURISDICTION U/S.263 IN TERMS OF SEC.263(2) IS TWO YEARS FROM THE END OF THE FINANCIAL YEAR IN WHICH THE ORDER SOUGHT TO BE REVISED WAS PASSED. THE PERIOD OF LIMITATION FOR PASSING TH E ORDER U/S.263, IF IT IS RECKONED FROM THE ORDER DATED 06.10.2003 W OULD EXPIRE ON 31.03.2006. IT WAS HIS SUBMISSION THAT HAVING OMITT ED TO TAKE APPROPRIATE ACTION U/S.263 OF THE ACT AGAINST THE O RDER DATED 06.10.2003 WITHIN THE PERIOD OF LIMITATION, THE CIT CANNOT IN THE GARB OF REVISING THE ORDER DATED 20.02.2007 SEEK TO REVISE THE ORDER DATED 06.10.2003 WHICH WAS ALREADY BARRED BY TIME FOR ANY ACTION U/S.263 OF THE ACT. IN THIS REGARD OUR ATTEN TION WAS DRAWN TO THE DECISION OF THE HONBLE SUPREME COURT IN THE CA SE OF CIT VS. ALAGENDRA FINANCE LTD. 293 ITR1 (SC) WHEREIN IT WAS HELD THAT WHERE POWER OF REVISION IS EXERCISED U/S.263 OF THE ACT AGAINST AN ORDER OF REASSESSMENT, ITEMS WHICH WERE NOT SUBJECT MATTER OF REASSESSMENT BUT WHICH WERE SUBJECT MATTER OF ORIGI NAL ASSESSMENT COULD NOT BE REVISED. THE HONBLE COURT HELD THAT P ERIOD OF LIMITATION WOULD START FROM THE ORIGINAL ORDER OF A SSESSMENT AND NOT FROM THE REASSESSMENT ORDER. THE HONBLE COURT FURTHER HELD THAT WHERE THE ISSUES DEALT WITH IN THE ORDER OF AS SESSMENT AND ORDER OF REASSESSMENT WERE DIFFERENT, DOCTRINE OF M ERGER WOULD NOT APPLY AND THE PERIOD OF LIMITATION WOULD COMMENCE F ROM THE ORIGINAL ASSESSMENTS AND NOT FROM THE REASSESSMENT. RELIANCE WAS ALSO PLACED ON THE DECISION OF THE HONBLE BOMBAY H IGH COURT IN M/S TATA SONS LIMITED . 19 THE CASE OF ASHOKA BUILDCON LTD. VS. ACIT (W.P.NO.1 0160 OF 2009 DATED 23/4/2010 WHEREIN ON IDENTICAL FACTS FOLLOWIN G THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ALAGEND RA FINANCE (SUPRA), IT WAS HELD THAT ORDER U/S.263 WAS BARRED BY TIME. OUR ATTENTION WAS ALSO DRAWN TO DECISIONS OF OTHER HON BLE HIGH COURTS ON IDENTICAL PROPOSITION. WE ARE NOT MAKING ANY REFERENCE TO THOSE DECISIONS AS THE PRINCIPLES EMANATING FROM THOSE DECISIONS ARE IDENTICAL. 12. THE LEARNED. D.R. HOWEVER SUBMITTED THAT UNDER THE PROVISIONS OF SEC.263 THE COMMISSIONER MAY CALL FOR AND EXAMIN E THE RECORD OF ANY PROCEEDING UNDER THIS ACT AND IF HE CONSIDER S THAT ANY ORDER PASSED THEREIN BY THE AO IS ERRONEOUS AND PREJUDICI AL TO THE INTEREST OF THE REVENUE, HE MAY EXERCISE JURISDICTI ON. ACCORDING TO HIM THE EXPRESSION ANY PROCEEDINGS AND ANY ORDER PASSED THEREIN GIVES A WIDE SCOPE TO THE CIT. THE ORDER D ATED 20.02.2007 WAS ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF THE REVENUE AND, THEREFORE, THE CIT INVOKED THE PROVISI ONS OF SEC.263 OF THE ACT. ACCORDING TO HIM, THE CIT WAS WELL WITH IN HIS JURISDICTION IN PASSING THE IMPUGNED ORDER. IT WAS ALSO HIS SUBMISSION THAT THE DECISION OF THE HONBLE SUPREME COURT IN THE CASE OF ALAGENDRA FINANCE (SUPRA) AND THE HONBLE B OMBAY HIGH COURT IN THE CASE OF ASHOKA BUILDCON LTD. (SUPRA) W AS A CASE OF REASSESSMENT, WHEREAS THE CASE OF THE ASSESSEE THE ORDERS RELATE TO GIVING EFFECT TO THE ORDER OF CIT(A) AND ITAT WHICH CANNOT BE EQUATED WITH ORDER OF ASSESSMENT AND REASSESSMENT. IT WAS ALSO HIS SUBMISSION THAT THE ISSUES DEALT WITH IN THE ORDER WHICH WAS REVISED U/S.263 WERE CONSEQUENTIAL TO THE ORDERS OF THE APPELLATE AUTHORITIES AND THE AO EXAMINED THEM FOR THE FIRST TIME IN THE ORDER DATED 20.02.2007. M/S TATA SONS LIMITED . 20 13. WE HAVE CAREFULLY CONSIDERED THE RIVAL SUBMISSI ONS. UNDER SECTION 263 OF THE ACT, THE COMMISSIONER MAY CALL F OR AND EXAMINE THE RECORD OF ANY PROCEEDING UNDER THIS ACT AND IF HE CONSIDERS THAT ANY ORDER PASSED THEREIN BY THE AO IS ERRONEOU S AND PREJUDICIAL TO THE INTEREST OF THE REVENUE, HE MAY EXERCISE JURISDICTION BY MODIFYING, ENHANCING THE ASSESSMENT OR CANCELING THE ASSESSMENT AND DIRECTING A FRESH ASSESSMENT. TH E EXPRESSION ANY PROCEEDINGS UNDER THIS ACT AND IF CONSIDERS TH AT ANY ORDER PASSED THEREIN BY THE ASSESSING OFFICER NO DOUBT G IVES POWER TO EXAMINE THE RECORD OF ANY PROCEEDINGS UNDER THE ACT . HOWEVER THE COMMISSIONER, IF HE WANTS TO EXERCISE JURISDICTION U/S.263 AND REVISE AN ORDER PASSED BY THE ASSESSING OFFICER, TH EN HE MUST FIND THE ORDER WHICH HE SEEKS TO REVISE TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. AS RIGHTLY CONTENDE D ON BEHALF OF THE ASSESSEE, IN THE ORDER OF ASSESSMENT U/S.143(3) DAT ED 10-3-1993, THE AO DETERMINED THE DEDUCTION U/S.80- O AT RS.1,8 4,76,240 AND DID NOT ALLOW DEDUCTION U/S.80-HHB OF THE ACT. WHIL E COMPUTING TOTAL INCOME IN THE ORDER OF ASSESSMENT DATED 10-3- 1993, THE INCOME UNDER THE HEAD INCOME FROM BUSINESS WAS ON LY RS.4,97,38,504, WHEREAS THE GROSS TOTAL INCOME WAS RS.11,33,53,911 AND THE DEDUCTIONS UNDER CHAPTER VI -A OF THE ACT, WAS RS.4,84,70,522. SINCE THE DEDUCTIONS UNDER CHAP TER VI-A OF THE ACT WAS LESS THAN THE INCOME UNDER THE HEAD IN COME FROM BUSINESS, THE AO DID NOT HAVE ANY OCCASION TO EXAM INE THE QUESTION WHETHER DEDUCTION UNDER ANY SECTIONS OF CH APTER-VI-A OF THE ACT, HAD TO BE RESTRICTED TO THE INCOME UNDER T HE HEAD INCOME FROM BUSINESS BECAUSE OF THE PROVISIONS OF SEC.80- AB OF THE ACT, OR IT IS ONLY THE OVERALL CEILING OF DEDUCTION UNDE R SEC.80-A(2) THAT HAS TO BE SEEN. IN THE APPEAL AGAINST THE SAID ORDE R OF ASSESSMENT M/S TATA SONS LIMITED . 21 DEDUCTION U/S.80-O AND 80-HHB OF THE ACT, WAS DIREC TED TO BE ALLOWED AT RS. 2,96,99,157 AND RS.2,93,439/- RESPEC TIVELY. IN THE ORDER DATED 06.10.2003 PASSED BY THE AO TO GIVE EFF ECT TO THE ORDER OF CIT(A)-XXXIII, MUMBAI, DATED 20.08.2000, HE HAD DETERMINED THE DEDUCTION U/S.80-O AND 80-HHB AT RS. 2,96,99,15 7 AND RS.2,93,439/- RESPECTIVELY AND DID NOT THINK IT FIT TO RESTRICT THE DEDUCTION U/S.80-O AND 80-HHB TO THE INCOME UNDER T HE HEAD INCOME FROM BUSINESS WHICH WAS DETERMINED IN THE VERY SAME ORDER AT RS.1,64,92,652. THE GRIEVANCE PROJECTED BY THE CIT IN THE ORDER U/S.263 CAN HOLD GOOD ONLY WITH REGARD TO THI S ORDER BECAUSE THIS IS THE FIRST POINT OF TIME WHEN THE AO COULD H AVE AND OUGHT TO HAVE APPLIED HIS MIND TO THE QUESTION WHETHER DEDUC TION UNDER ANY SECTIONS OF CHAPTER-VI-A OF THE ACT, HAD TO BE REST RICTED TO THE INCOME UNDER THE HEAD INCOME FROM BUSINESS BECAUS E OF THE PROVISIONS OF SEC.80-AB OF THE ACT, OR IT IS ONLY T HE OVERALL CEILING OF DEDUCTION UNDER SEC.80-A(2) OF THE ACT THAT HAS TO BE SEEN. IF AT ALL, IT IS THIS ORDER WHICH COULD BE SAID TO BE ERR ONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. THE ORD ER DATED 4/12/2006 MERELY GAVE EFFECT TO THE ORDER OF THE IT AT DATED 20.06.2006 IN WHICH THIS ISSUE COULD NOT HAVE BEEN EXAMINED BY THE AO. THE ISSUES BEFORE THE ITAT WERE TOTALLY DIF FERENT AND HAD NOTHING TO DO WITH THE QUESTION AS TO WHETHER DEDUC TION UNDER ANY SECTIONS OF CHAPTER-VI-A OF THE ACT, HAD TO BE REST RICTED TO THE INCOME UNDER THE HEAD INCOME FROM BUSINESS BECAUS E OF THE PROVISIONS OF SEC.80-AB OF THE ACT, OR IT IS ONLY T HE OVERALL CEILING OF DEDUCTION UNDER SEC.80-A(2) OF THE ACT THAT HAS TO BE SEEN. SINCE THE ISSUES DEALT WITH IN THE ORDER DATED 06.10.2003 AND 20.02.2007 WERE DIFFERENT, THERE WOULD BE NO QUESTION OF THE O RDER DATED 06.10.2003 MERGING WITH THE ORDER DATED 4/12/2006. THE AO IN HIS M/S TATA SONS LIMITED . 22 ORDER DATED 4.12.2006 WHILE GIVING EFFECT TO THE OR DER OF THE TRIBUNAL ACTED BEYOND HIS JURISDICTION IN RESTRICTI NG THE DEDUCTION U/S.80-O OF THE ACT TO THE EXTENT OF INCOME UNDER T HE HEAD INCOME FROM BUSINESS. HE REALIZED THIS MISTAKE AND RIGHTL Y PASSED ORDER U/S.154 OF THE ACT DATED 20.2.2007. 14. FOR THE REASONS GIVEN ABOVE, WE ARE OF THE VIE W THAT THE ORDER DATED 20.2.2007 PASSED BY THE AO U/S.154 OF THE ACT WAS NOT ERRONEOUS. THE ORDER U/S.263 OF THE ACT DATED 30.03 .2009 REVISING THE ORDER DATED 20.02.2007 IS BAD IN LAW. ON THIS G ROUND THE ORDER U/S.263 IS LIABLE TO BE QUASHED AND IS HEREBY QUASH ED. 2.4. WE FIND THAT THE CO-ORDINATE BENCH HAD ALREA DY DISCUSSED THE MATTER IN DETAIL AND AFTER ANALYZING THE SAME BY FOLLOWING THE DECISION FROM HONBLE APEX COURT AND ALSO HONBLE JURISDICTIONAL HIGH COURT, THUS, ON THE SAME REASON ING, WHICH WAS UNCONTROVERTED BY THE REVENUE, AND FURTHER IN T HE ABSENCE OF ANY CONTRARY DECISION CITED BEFORE US, WE FIND M ERIT IN THE ARGUMENT OF THE ASSESSEE, THEREFORE, QUASHED THE PR OCEEDINGS INVOKED, U/S 263 OF THE ACT, BY THE LD. COMMISSIONE R BECAUSE THE ASSESSEE CLAIMED RELIEF OF DIT VIDE ITS RETURN OF INCOME FOR WHICH THE ASSESSEE WAS ALLOWED CREDIT VIDE ORDER U/ S 143(3). THE ASSESSEE APPEALED AGAINST THE SAID SHORT CREDIT AND THE LD. COMMISSIONER OF INCOME TAX (APPEALS) VIDE ORDER DAT ED 25/03/1996 ALLOWED THE APPEAL OF THE ASSESSEE. VIDE ORDER GIVING EFFECT TO THE ORDER DATED 29/03/1996 (OF THE LD. COMMISSIONER OF INCOME TAX (APPEALS), THUS, REVISIO NSNAL PROCEEDINGS ARE BARRED BY LIMITATION AFTER 31 ST MARCH, 1998, IN VIEW OF SECTION 263(2) OF THE ACT, WHEREAS, THE ORD ER U/S 263 OF M/S TATA SONS LIMITED . 23 THE ACT IS DATED 31 ST MARCH, 2009, THUS, THIS GROUND OF THE ASSESSEE IS ALLOWED. 2.5. SINCE, WE HAVE QUASHED THE PROCEEDINGS U/S 263 OF THE ACT AS BARRED BY LIMITATION, THEREFORE, WE REFRAIN OURS ELVES TO GO INTO THE MERITS OF THE APPEAL/OTHER GROUNDS. FINALLY, ALL THE APPEALS ARE ALLOWED. THIS ORDER WAS PRONOUNCED IN THE OPEN COURT IN THE PRESENCE OF LD. REPRESENTATIVES FROM BOTH SIDES AT THE CONCLUSION OF THE HEARING ON 03/02/2015. SD/ - (RAJENDRA) SD/ - (JOGINDER SINGH) / ACCOUNTANT MEMBER / JUDICIAL MEMBER MUMBAI; /' DATED : 04/02/201 5 F{X~{T? P.S/. '.. . ( 1'2 32-' . ( 1'2 32-' . ( 1'2 32-' . ( 1'2 32-'/ COPY OF THE ORDER FORWARDED TO : 1. 45 / THE APPELLANT 2. 1645 / THE RESPONDENT. 3. 7 ( ) / THE CIT, MUMBAI. 4. 7 / CIT(A)- , MUMBAI 5. 29: 1'' , , / DR, ITAT, MUMBAI 6. :;% < / GUARD FILE. .' .' .' .' / BY ORDER, 62' 1' //TRUE COPY// = == =/ // /> > > > (DY./ASSTT. REGISTRAR) , , , , / ITAT, MUMBAI