DCIT, Shimla V. M/s Hotel Landmark, Shimla

ITA 418/CHANDI/2017

• Counselvise Citation: [2019] 117 COUNSELVISE.COM (IT) 4534 (ITAT-CHANDIGARH)
• Duration Of Justice: 2 year(s) 2 month(s) 27 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-05-2019
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: Not Allotted
• Next Hearing Date: 20-05-2019
• Assessment Year: 2012-2013
• Appeal Filed On: 03-03-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: HARJINDER SINGH
• Keywords: Question of law; Tax effect; Set aside
• Section: 263; 2

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL DIVISION BENCHA, CHANDIGARH BEFORE SHRI. S.S. GODARA, JUDICIAL MEMBER AND MS. ANNAPURNA GUPTA, ACCOUNTANT MEMBER ITA NO.418/CHD/2017 ASSESSMENT YEARS: 2012-13 THE DCIT VS. M/S HOTEL LANDMARK, CIRCLE, SHIMLA NEAR VICTORY TUNNEL, THE MALL SHIMLA PAN NO. AAEFH9693Q (APPELLANT) (RESPONDENT) ASSESSEE BY : SH. ASHWANI KUMAR REVENUE BY : SH. HARJINDER SINGH DATE OF HEARING : 20/05/2019 DATE OF PRONOUNCEMENT : 30/05/2019 ORDER PER ANNAPURNA GUPTA, A.M. THE PRESENT APPEAL HAS BEEN FILED BY THE REVENUE AG AINST THE ORDER OF THE LD. COMMISSIONER OF INCOME TAX,(APPEALS), SHIML A (IN SHORT REFERRED TO AS CIT(A) DT. 27/12/2016 PASSED U/S 250(6) OF THE INC OME TAX ACT,1961 (HEREINAFTER REFERRED TO AS ACT) . 2. THE SOLE ISSUE, IT WAS POINTED OUT, RELATED TO ELIGIBILITY OF THE ASSESSEE TO CLAIM DEDUCTION UNDER SECTION 80IC OF THE ACT ON A CCOUNT OF CARRYING OUT ECO TOURISM ACTIVITY BY THE ASSESSEE HOTEL. 3. BRIEF FACTS OF THE CASE ARE THAT THE ASSESSEE FI RM WAS RUNNING A HOTEL IN THE NAME AND STYLE OF M/S. HOTEL LANDMARK AT THE MALL, SHIMLA. THE ASSESSEE FIRM HAD STARTED ITS BUSINESS/OPERATIONS IN THE A.Y. 200 9-10 AND WAS CLAIMING 2 DEDUCTION U/S 80IC OF THE I.T. ACT, ON ACCOUNT OF C ARRYING OUT ECO TOURISM ACTIVITY. FOR THE IMPUGNED YEAR THE ASSESSEE FIRM E-FILED ITS RETURN OF INCOME DECLARING NIL INCOME AFTER CLAIMING DEDUCTION U/S 80IC AMOUNTING TO RS.14,610,858/-. DURING ASSESSMENT PROCEEDINGS, THE ASSESSEE WAS ASK ED TO EXPLAIN AS TO HOW IT FULFILLED THE BASIC CONDITIONS AS LAID DOWN IN SECTION 80IC OF THE ACT, SO AS TO ENTITLE IT TO CLAIM DEDUCTION U/S 80IC OF THE ACT. THE THRUST OF THE REPLY OF THE ASSESSEE BEFORE THE ASSESSING OFFICER (AO) WAS THAT THE ASSESSEE HOTEL WAS ELIGIBLE FOR THE CLAIM OF DEDUCTION U/S 8 0IC ON THE BASIS OF JUDGMENT OF ITAT, CHANDIGARH IN APPEAL NO 152, 469, & 1144/C HD OF 2010 IN THE CASE OF ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE, SHIML A VS. RAGHUNATH SINGH THAKUR AND ALSO ON THE JUDGMENT OF ITAT, DELHI IN THE CASE OF M/S. BIDHI CHAND SINGHAL VS. ITO IN ITA NO.3419/DEL/2009, SINCE IT HAD OBT AINED THE NO OBJECTION CERTIFICATE FROM HIMACHAL PRADESH STATE ENVIRONMENT PROTECTION POLLUTION BOARD, WHICH ESTABLISHED THAT IT WAS CARRYING OUT ECO TOUR ISM ACTIVITY ,AS PER THE AFORESAID DECISIONS. THE CONTENTION OF THE ASSESSEE WAS NOT ACCEPTED BY THE A.O. ACCORDINGLY THE DEDUCTION CLAIMED BY THE APPEL LANT AT RS. 14,610,858/- UNDER SECTION 80IC OF THE ACT WAS DISALLOWED BY THE A.O. 4. THE MATTER WAS CARRIED IN APPEAL BEFORE THE LD. CIT(A) WHO FOUND THAT IDENTICAL ISSUE HAD BEEN ADJUDICATED IN FAVOUR OF T HE ASSESSEE BY THE ITAT IN THE IN ASSESSMENT YEAR (A.Y.) 2010-11. THE LD. CIT(A) ACCORDINGLY ALLOWED THE APPEAL BY FOLLOWING THE DECISION OF ITAT IN ASSESSE E OWN CASE IN THE PRECEDING A.Y. 5. AGGRIEVED BY THE SAME THE REVENUE HAS COME UP IN APPEAL RAISING THE FOLLOWING GROUNDS 1. ON THE FACTS AND IN THE CIRCUMSTANCES, THE LD. CIT(A ) HAS ERRED IN HOLDING THAT THE PROFIT DERIVED FROM THE HOTEL RUN BY THE ASSESS EE ARE ELIGIBLE FOR DEDUCTION U/S 80IC AMOUNTING TO RS. 1,46,10,858/- AS THE DEFINITI ON OF 'ECO-TOURISM, INCLUDING HOTELS AS GIVEN IN SCHEDULE XIV AND THE CONCEPT OF ECO-TOURISM DO NOT JUSTIFY THE CLAIM OF THE ASSESSEE_FOJX5LAIMING DEDUCTION U/S 80 IC. 3 2. THE LD. CIT (A) HAS ERRED IN CONCLUDING THAT THE HO TEL RUN BY THE ASSESSEE QUALIFIES TO BE AN 'ECO-TOURISM' PROJECT, AND HENCE COVERED UNDER ITEM 15 OF SCHEDULE XIV OF THE INCOME TAX ACT, 1961. 3. THE LD. CIT(A) HAS ERRED IN HOLDING THAT THE HOTEL RUN BY THE ASSESSEE QUALIFIES TO BE AN ECO-TOURISM PROJECT MERELY ON THE BASIS OF 'NO OBJECTION' CERTIFICATE ISSUED BY THE HP. STATE ENVIRONMENT PROTECTION AND POLLUTION CONTROL BOARD IS NOT ENOUGH TO MAKE THE ASSESSEE'S HOTEL AN 'ECO-TOURISM ' PROJECT UNDER THE WELL DOCUMENTED POLICY OF STATE OF HIMACHAL PRADESH ON ' ECO-TOURISM' EVEN THOUGH THE NAME OF THE ASSESSEE DOES NOT FIGURE IN THE LIS T APPROVED ECO-TOURISM PROJECTS OF THE GOVT, OF HP. 4. IT IS PRAYED THAT THE ORDER OF THE LD CIT(A) BE SET -ASIDE AND THAT OF THE A.O. RESTORED. 5. THE APPELLANT CRAVES LEAVE TO ADD ANY OTHER GROUND OF APPEAL WHICH MAY ARISE AT THE TIME OF HEARING. 6. DURING THE COURSE OF HEARING BEFORE US, THE LD. DR POINTED OUT THAT THIS ISSUE HAD COME UP BEFORE THE HON'BLE UTTARAKHAND HI GH COURT IN THE CASE OF ANCHAL HOTELS PVT. LTD. 2016, 138 DTR 169, WHEREIN ALSO THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IC ON THE BASIS OF NO OBJ ECTION CERTIFICATE (NOC) ISSUED BY THE POLLUTION CONTROL BOARD. LD. DR POINT ED OUT THAT THE HONBLE HIGH COURT HAD CATEGORICALLY RULED OUT THE ALLOWABILITY OF THE CLAIM OF THE ASSESSEE ON THE BASIS OF NOC ALONE AND HAD EXHAUSTIVELY DEAL T WITH THE MEANING OF THE TERM ECO TOURISM AND THE PURPOSE FOR ALLOWANCE OF D EDUCTION UNDER SECTION 80IC AND THUS LAID DOWN THE GUIDELINES FOR DETERMIN ING WHETHER ECO TOURISM ACTIVITY WAS BEING CARRIED OUT BY HOTELS SO AS TO BE ELIGIBLE TO CLAIM DEDUCTION OF PROFITS FROM THE SAME UNDER SECTION 80IC OF THE ACT. LD. DR FURTHER POINTED OUT THAT THE ITAT CHANDIGARH BENCH HAD IN THE CASE OF R AGHUNATH SINGH THAKUR FOR A.Y 2013-14 IN ITA NO.416/17 DATED 14-12-17,RE STORED THE MATTER BACK TO THE AO TO DECIDE THE ISSUE AFRESH IN THE LIGHT OF THE D ECISION OF THE HON'BLE UTTARAKHAND HIGH COURT. LD. DR THEREFORE STATED TH AT THE ALLOWANCE OF THE CLAIM OF THE ASSESSEE IN THE PRESENT CASE FOLLOWING THE DECISION OF THE ITAT, WAS AGAINST LAW AS LAID DOWN BY THE HON'BLE UTTARAKHAN D HIGH COURT IN THE CASE OF 4 ANCHAL HOTELS PVT. LTD.(SUPRA) AND LD. CIT(A) HAD E RRED IN SO ALLOWING THE CLAIM OF THE ASSESSEE . 7. LD. COUNSEL FOR THE ASSESSEE COUNTERED BY STATIN G THAT THE MATTER DECIDED BY THE ITAT CHANDIGARH BENCH IN THE CASE OF RAGHUNATH SINGH (SUPRA) RELATING TO A.Y 2013-14 HAD BEEN CARRIED IN APPEAL BY THE ASSESEEE TO THE HON'BLE HIMACHAL PRADESH HIGH COURT WHEREIN IT HAD BEEN ADMITTED FRAMING THE FOLLOWING QUESTION OF LAW: A. WHETHER THE INCOME TAX APPELLATE TRIBUNAL IS LEG ALLY JUSTIFIED IN REMANDING THE MATTER BACK TO THE FILE OF THE ASSESI NG AUTHORITY TO ADJUDICATE AFRESH AFTER TAKING INTO CONSIDERATION T HE JUDGMENT DELIVERED BY UTTARAKHAND HIGH COURT, THOUGH VIEW OF THE COORDINATE BENCH OF THE TRIBUNAL HAS NOT BEEN SET A SIDE TILL DATE BY THIS COURT AS YET? B. WHETHER THE INCOME TAX APPELLATE TRIBUNAL IS RIG HT IN LAW IN NOT ALLOWING THE DEDUCTION UNDER SECTION 80 IC AND REMA NDING THE MATTER BACK TO THE FILE OF THE ASSESSING OFFICER TH OUGH UNDER ENTRY NO.15 OF SCHEDULE 14, HOTELS DULY FIND MENTIONED AN D LOCATION IS NOT AN IMPEDIMENT? C. WHETHER THE INCOME TAX APPELLATE TRIBUNAL IS RIG HT IN LAW AND FACTS IN NOT CONSIDERING THE FACT THAT DEPARTMENT OF TOUR ISM HAS ITSELF GIVEN A CERTIFICATE TO THE APPELLATE AS ECO-HOTEL? D. WHETHER ONLY HOTELS WHICH ARE SETUP AS ECOTOURIS M UNITS IN THE STATE OF HIMACHAL PRADESH AND STATE OF UTTARANCHAL ARE EL IGIBLE FOR DEDUCTION U/S 80 IC R/W ENTRY 15 OF PART C OF 14 TH SCHEDULE OF THE ACT. 8. LD. COUNSEL FOR THE ASSESSEE THEREAFTER CONTENDE D THAT IDENTICAL CLAIM OF THE ASSESSEE HAD ALL ALONG BEEN ALLOWED TO IT IN TH E PRECEDING AND SUCCEEDING YEARS AND THEREFORE FOLLOWING THE PRINCIPLES AND RU LES OF CONSISTENCY, THE ALLOWANCE OF CLAIM BY THE LD. CIT(A) WAS CORRECT. L D COUNSEL FOR THE ASSESSEE POINTED OUT THAT THE APPEAL OF THE REVENUE IN A.Y. 2011-12 AND A.Y. 2013-14 BEFORE THE ITAT HAD BEEN DISMISSED ON ACCOUNT OF TH E TAX EFFECT INVOLVED BEING LESS THAN THAT THE PRESCRIBED CBDT FOR FILING APPEA LS BEFORE THE ITAT. COPY OF THE 5 ORDER OF THE ITAT FOR THE IMPUGNED YEARS IN ITA NO. 61/CHD/2016 AND ITA NO. 419/CHD/2017 RESPECTIVELY DT. 30/10/2018 WAS FILED BEFORE US. LD. COUNSEL FOR THE ASSESSEE FURTHER POINTED OUT THAT IN A.Y. 2009- 10 THE AO ALLOWED THE ASSESSES CLAIM BUT THE CIT HAD SET ASIDE THE ORDE R OF THE AO UNDER SECTION 263 OF THE ACT, AND THE ITAT, IN APPEAL, HAD SET ASIDE THE ORDER OF THE LD.CIT VIDE ITS ORDER DT. 11/06/2018 IN ITA NO. 481/CHD/2014 HOLDIN G THAT THE VIEW OF THE AO WAS A PLAUSIBLE VIEW. LD. COUNSEL FOR THE ASSESSEE FURTHER POINTED OUT THAT IN AY 2010-11 THE APPEAL FILED BY THE REVENUE AGAINST THE ALLOWANCE OF THE CLAIM OF THE ASSESSEE WAS DISMISSED BY THE ITAT VIDE ITS ORD ER DT. 28/09/2015 IN ITA NO. 433/CHD/2015. LD. COUNSEL THEREFORE CONTENDED THAT IN VIEW OF THE CONSISTENT ALLOWANCE OF THE CLAIM OF THE ASSESSEE IN A.Y 2009- 10,2010-11,2011-12 AND 2013- 14 THE ORDER OF THE LD. CIT(A) ALLOWING THE CLAIM I N THE IMPUGNED YEAR, I.E. A.Y 2012-13, WAS CORRECT. 9. WE HAVE HEARD THE RIVAL CONTENTION PERUSED THE O RDERS OF THE AUTHORITIES BELOW AND ALSO GONE THROUGH THE VARIOUS DECISIONS A ND ORDERS REFERRED TO BEFORE US. 10. THE ISSUE BEFORE US RELATES TO THE CLAIM OF THE ASSESSEE HOTEL TO DEDUCTION UNDER SECTION 80IC ON ACCOUNT OF CARRYING OUT ECO T OURISM ACTIVITY. THE UNDISPUTED FACTS ARE THAT THE ASSESSEE HAD CLAIMED TO BE CARRYING OUT ECO TOURISM FOR THE PURPOSES OF CLAIMING DEDUCTION U/S 80IC OF THE ACT, ON THE BASIS OF NOC OBTAINED FROM HIMACHAL PRADESH STATE ENVIRO NMENT PROTECTION POLLUTION BOARD(HPSEPPB) AND HAD RELIED UPON THE DECISION OF ITAT CHANDIGARH BENCH IN THE CASE OF ACIT CIRCLE SHIMLA VS. RAGHUNATH SINGH THAKUR IN ITA NO. 152,469 AND 1144/CHD/2010 ,FOR A.Y 2006-07,2007-08,2008-09,IN S UPPORT OF ITS CLAIM. 11. IT IS NOT DENIED THAT THE HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF ANCHAL HOTELS PVT. LTD.(SUPRA) HAS OUT RIGHTLY REJE CTED THE CLAIM OF THE ASSESSEES CARRYING OUT ECO TOURISM ACTIVITY SOLELY ON THE BAS IS OF NOC OBTAINED FROM THE 6 HPSEPPB . ALSO THE ITAT CHANDIGARH BENCH IN ITS L ATEST DECISION IN THE CASE OF RAGHUNATH SINGH THAKUR(SUPRA) FOR A.Y 2013-14, FO LLOWED THE DECISION OF HON'BLE UTTARAKHAND HIGH COURT IN THE CASE OF ANCHA L HOTELS PVT. LTD.(SUPRA), AND REJECTED THE CLAIM OF THE ASSESSEE ON THE BASIS OF THE NO NOC OBTAINED , RESTORING THE MATTER BACK TO THE AO TO VERIFY THE C LAIM OF THE ASSESSEE IN THE LIGHT OF GUIDELINES LAID DOWN BY HON'BLE UTTARAKHAN D HIGH COURT IN THE CASE OF ANCHAL HOTELS PVT. LTD.(SUPRA) FOR DETERMINING WHET HER ECO TOURISM ACTIVITY WAS BEING CARRIED OUT OR NOT. THE ITAT, IN THE SAID DEC ISION WE FIND, HAD ALSO DISTINGUISHED THE DECISION OF COORDINATE BENCH IN T HE CASE OF ITO VS ASIA HEALTH RESORT IN ITA NO.297 & 1211/CHD/16 DATED 23-03-17 I N WHICH THE CLAIM HAD BEEN ALLOWED FOLLOWING EARLIER YEAR DECISIONS IN THE CAS E OF RAGHUNATH THAKUR STATING THAT BEING THE DECISION OF A SINGLE MEMBER BENCH IT WAS NOT BINDING ON THE DIVISION BENCH . 12. IN THE ABOVE BACKDROP OF THE FACTS OF THE CASE AND THE JUDICIAL POSITION , THE JUDICIAL INTERPRETATION OF THE ISSUE HAVING GU IDING FORCE AS ON DATE IS THAT LAID DOWN BY THE HON'BLE UTTARAKHAND HIGH COURT IN THE CASE OF ANCHAL HOTELS PVT. LTD.(SUPRA) .THE LATEST DECISION IN TIME OF T HE ITAT CHANDIGARH BENCH IN THE CASE OF RAGHUNATH SINGH THAKUR FOR A.Y 2013-14 WE F IND, HAS BINDING FORCE . APPLYING THE SAME TO THE PRESENT CASE, WE SET ASIDE THE ORDER OF THE CIT(A) ALLOWING THE CLAIM OF THE ASSESSEE ON THE BASIS OF NOC ISSUED BY THE STATE POLLUTION BOARD AND RESTORE THE ISSUE BACK TO THE A O TO EXAMINE THE CLAIM OF THE ASSESSEE IN ACCORDANCE WITH THE GUIDELINES LAID DOW N BY THE HONBLE UTTARAKHAND HIGH COURT IN THE CASE OF AANCHAL HOTEL S FOR DETERMINING WHETHER THE ASSESSEE IS CARRYING OUT ECO TOURISM ACTIVITY. 13. THE CONTENTION OF THE LD. COUNSEL FOR THE ASSES SEE THAT ITS CLAIM IS ALLOWABLE IN VIEW OF THE FACT THAT IT HAS BEEN CONS ISTENTLY ALLOWED THE SAID CLAIM IN THE PRECEDING AND SUCCEEDING YEAR, WE FIND MERIT S NO CONSIDERATION SINCE THE FACTS REVEAL OTHERWISE. AS HAS BEEN POINTED OU T BY THE LD. COUNSEL FOR THE 7 ASSESSEE, THE REVENUES APPEAL IN THE ASSESSES CASE BEFORE THE ITAT FOR A.Y. 2011-12 AND 2013-14 HAD BEEN DISMISSED ON ACCOUNT O F THE LOW TAX EFFECT INVOLVED, THUS THE ISSUE HAD BEEN LEFT OPEN AND IT CANNOT BE SAID THAT THE CLAIM OF THE ASSESSEE HAD BEEN ALLOWED BY THE ITAT ON MER ITS IN THOSE YEARS. AS FOR A.Y. 2010-11 WE FIND THAT THE ITAT HAD ALLOWED THE CLAIM OF THE ASSESSEE BY FOLLOWING THE DECISION OF THE COORDINATE BENCH IN THE CASE OF RAGHUNATH THAKUR FOR THE EARLIER YEARS, WHILE IN THE LATER YEAR, IN A.Y 201 3 -14, IN THE CASE OF RAGHUNATH THAKUR THE CLAIM HAD BEEN DISALLOWED BY THE ITAT. AS FOR A.Y. 2009-10 WE FIND THAT THE ORDER PASSED BY THE AO ALLOWING THE CLAIM OF THE ASSESSEE WAS REVISED BY THE CIT U/S 263. THE ITAT HAD SET ASIDE THE ORDE R OF THE CIT. WE HAVE GONE THROUGH THE ORDER OF THE ITAT IN THE SAID CASE. THE FINDINGS OF THE ITAT IN THE SAID CASE ARE REPRODUCED HEREUNDER: 8. WE HAVE CONSIDERED THE RIVAL CONTENTIONS AND HA VE ALSO GONE THROUGH THE RECORDS. WE FIND THAT IN THIS CASE, NOT ONLY AT THE TIME OF THE ASSESSMENT ORDER BUT A LSO AT THE TIME OF PASSING OF THE IMPUGNED ORDER DATED 12.3.2014 U/S 263, THE VIEW TAKEN BY THE ASSESSING OFFICER WAS ONE OF THE POSSIBLE VIEW WHICH WAS FORTIFIED BY THE DECISION OF THE TRIBUNAL IN THE CASE OF RAGHUNATH SINGH THAKUR (SUPRA). THE SAID DECISION OF THE TRIBUNAL W AS ALSO AVAILABLE AND HAD BEEN DISCUSSED BY THE LD. CIT IN HIS IMPUGNED ORDER PASSED U/S 263 OF THE ACT, HENCE, UN DER THE CIRCUMSTANCES, THE ASSESSING OFFICER HAD TAKEN ONE OF THE POSSIBLE VIEW AND, THEREFORE, IN THE LIGHT OF T HE DECISION OF THE HON'BLE SUPREME COURT IN THE CASE O F MALABAR INDUSTRIAL CO. LTD V CIT (SUPRA) AND IN THE CASE OF CIT VS. MAX INDIA LTD. (SUPRA) THERE WAS NO JUS TIFICATION ON THE PART OF THE LD. CIT TO INVOKE THE JURISDICTI ON U/S 263 OF THE ACT. SO FAR AS THE ARGUMENTS OF THE LD. DR THAT THE ISS UE IS SQUARELY COVERED BY THE DECISION OF THE HON'BLE UTTARAKHAND HIGH COURT IN THE CASE OF CIT VS. ANCH AL HOTEL (P) LTD., WITH ALL THE DUE RESPECT, IT IS TO BE NOTED THAT THE HON'BLE UTTARAKHAD HIGH COURT IS NOT THE JURISDICTIONAL HIGH COURT OF THIS TRIBUNAL. HENCE , THE SAID 8 DECISION OF THE HON'BLE UTTARAKHAND HIGH COURT DOES NOT HOLD A BINDING PRECEDENT. HENCE, THE PROPOSITION T HAT THE INTERPRETATION OF A PROVISION BY THE SUBSEQUENT DECISION OF A SUPREME COURT OR JURISDICTIONAL HIGH COURT ACTS RETROSPECTIVELY AND THAT THE VIEW EXPRESSED IN THE LATER DECISION WOULD HAVE TO BE REGARDED HAVING ALW AYS BEEN A LAW AS ON THE DATE OF ITS INCORPORATION, CAN NOT BE APPLIED IN THIS CASE TO HOLD THAT THE ORDER OF THE ASSESSING OFFICER IS ERRONEOUS. THE BENEFIT OF THE SUBSEQUEN T DECISION OF THE HON'BLE UTTRAKHAND HIGH COURT IN TH E CASE OF CIT VS. ANCHAL HOTEL (P) LTD. (SUPRA) WAS NOT A VAILABLE WITH THE ASSESSING OFFICER AT THE TIME OF ASSESSMEN T PROCEEDINGS. IN VIEW OF THIS, THE ORDER OF THE ASS ESSING OFFICER CANNOT BE HELD TO BE ERRONEOUS ON THIS ACCO UNT ALSO. RELIANCE IN THIS RESPECT CAN BE PLACED ON THE DECISION OF THE JURISDICTIONAL PUNJAB & HARYANA H IGH COURT IN THE CASE OF COMMISSIONER OF INCOME TAX VS . VARDHMAN SPINNING (1997) 93 TAXMAN 453 (P&H). THE VIEW ADOPTED BY THE ASSESSING OFFICER, THUS, WAS ONE OF THE POSSIBLE VIEWS. IN VIEW OF THIS, IT CANNOT BE SAID THAT THE ORDER OF THE ASSESSING OFFICER WAS ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE INTEREST OF REVENUE AND, THE REFORE, THERE IS NO JUSTIFICATION ON THE PART OF THE COMMIS SIONER OF INCOME TAX TO INVOKE THE JURISDICTION U/S 263 OF T HE ACT. THEREFORE, THE IMPUGNED ORDER U/S 263 OF THE ACT IS SET ASIDE AND CONSEQUENT ADDITIONS IN COMPLIANCE OF THE SAID ORDER ARE ORDERED TO BE DELETED. 14. CLEARLY THE FINDINGS AND DECISION OF THE ITAT I N THE SAID CASE WERE LIMITED TO DECIDING WHETHER THE CIT HAD RIGHTLY ASSUMED JU RISDICTION U/S 263 OF THE ACT TO HOLD THE ORDER PASSED BY THE AO AS ERRONEOUS SO AS TO CAUSE PREJUDICE TO THE REVENUE. THE ITAT HELD THAT THERE WAS NO JUSTIFIC ATION WITH THE CIT FOR ASSUMING JURISDICTION U/S 263 OF THE ACT, ON FINDING THAT TH E VIEW OF THE AO WAS A PLAUSIBLE VIEW AND HENCE THE ORDER PASSED BY HIM WAS NOT ERRO NEOUS. THE ITAT BASED ITS FINDINGS ON NOTING THE FACT THAT WHEN THE AO PASSED THE ORDER ,ONLY THE DECISION OF THE ITAT IN THE CASE OF RAGHUNATH SINGH THAKUR ( SUPRA) FOR EARLIER YEARS WAS THERE WHICH HE ACCORDINGLY FOLLOWED AND ALLOWED THE ASSESSES CLAIM. THE ITAT NOTED THAT THE DECISION OF THE HON'BLE UTTARAKHAND HIGH COURT IN THE CASE OF 9 ANCHAL HOTELS PVT. LTD.(SUPRA) WAS NOT AVAILABLE WI TH THE AO AT THE TIME OF ASSESSMENT PROCEEDINGS BEING RENDERED SUBSEQUENTLY. THE ITAT ALSO HELD THAT THE DECISION OF THE HONBLE UTTARKHAND HIGH COURT BEING NOT THAT OF THE JURISDICTIONAL HIGH COURT OF THE ASSESSEE BEFORE IT , DID NOT BIND THE AO FOR THE PURPOSES OF THE PROPOSITION THAT THE VIEW EXPRESSED IN A LATER DECISION OF THE JURISDICTIONAL HIGH COURT OR SUPREME COURT WOULD HAVE TO BE REGARDED HAVING ALWAYS BEEN THE LAW AS ON DATE OF ITS INCORPORATIO N, SO AS TO MAKE THE ORDER OF THE AO ERRONEOUS. 15. THUS, WE FIND, THE ITAT SET ASIDE THE ORDER OF THE CIT AND RESTORED THE ORDER OF THE AO, ADJUDICATING THE ISSUE WITH A LIMITED PE RSPECTIVE OF DECIDING WHETHER THE ORDER PASSED BY THE AO WAS ERRONEOUS SO AS TO C AUSE PREJUDICE TO THE REVENUE. THE ITAT DID NOT FIND IT ERRONEOUS BECAUS E IT FOUND THAT THE AO HAD FOLLOWED THE DECISION OF THE ITAT PREVAILING AT THA T TIME AND THE DECISION OF THE UTTARAKHAND HIGH COURT WAS NOT THERE. SURELY THE DE CISION OF THE ITAT WAS NOT ON THE MERITS OF THE ISSUE AND CANNOT BE READ AS HOLD ING THAT DESPITE THE DECISION OF THE HONBLE UTTARAKHAND HIGH COURT IN THE CASE O F AANCHAL HOTELS (SUPRA) ,THE ITAT HAD FOUND NO ERROR IN THE ORDER OF THE A O ALLOWING THE CLAIM OF THE ASSESSEE . THE FINDINGS OF THE ITAT THAT THE AO WAS NOT BOUND BY THE DECISION OF THE UTTARAKHAND HIGH COURT NOT BEING THE JURISDICTI ONAL HIGH COURT ,WAS FOR THE LIMITED PURPOSE OF APPLYING THE PROPOSITION OF LAW THAT THE DECISION OF THE JURISDICTIONAL HIGH COURT IS THE LAW AS ALWAYS LAID DOWN, FOR THE PURPOSES OF DETERMINING WHETHER THE ORDER OF THE AO WAS ERRONEO US HAVING NOT BEEN DECIDED AS PER THE PROPOSITION LAID DOWN BY THE HON BLE HIGH COURT. THE ITAT NOTED THAT THE PROPOSITION APPLIED ONLY TO DECISION S OF THE JURISDICTIONAL HIGH COURT AND SINCE THE HONBLE UTTARAKHAND HIGH COURT WAS NOT THE JURISDICTIONAL HIGH COURT THE AO WAS NOT BOUND BY IT. THE ITAT THE REFORE HELD THAT THERE WAS NO ERROR IN THE ORDER OF THE AO. THE FINDINGS OF TH E ITAT BEING RESTRICTED TO THE LIMITED PURPOSE OF ADJUDICATING WHETHER THE CIT HA D VALIDLY ASSUMED JURISDICTION 10 U/S 263 OF THE ACT, CANNOT BE READ BEYOND THAT. THU S THE CONTENTION OF THE ASSESSEE THAT ITS CLAIM HAD BEEN CONSISTENTLY ALLO WED TO IT IN THE PRECEDING AND SUCCEEDING YEARS WE HOLD IS NOT CORRECT AND THEREFO RE DISMISSED. 16. FURTHER THE CONTENTION OF THE LD. COUNSEL FOR T HE ASSESSEE THAT THE ORDER OF THE ITAT IN THE CASE OF RAGHUNATH THAKUR FOR A.Y 2 013-14 HAS BEEN ADMITTED IN APPEAL BEFORE THE HON'BLE HIMACHAL PRADESH HIGH COU RT HAS NO CONSEQUENCE ON THE DECISION RENDERED BY THE ITAT , PENDING ADJ UDICATION ON THE SAME BY THE HON'BLE HIGH COURT. 17. IN VIEW OF THE ABOVE WE HOLD THAT THE DECISION OF THE HON'BLE UTTARAKHAND HIGH COURT IN THE CASE OF AANCHAL HOTE LS (SUPRA),WHICH HAS BEEN FOLLOWED BY THE ITAT CHANDIGARH BENCH IN THE CASE O F RAGHUNATH THAKUR FOR A.Y 2013-14 WILL APPLY IN THE FACTS OF THE PRESENT CASE , FOLLOWING WHICH WE RESTORE THE ISSUE BACK TO THE AO TO EXAMINE THE CLAIM OF THE AS SESSE OF CARRYING OUT ECO TOURISM ACTIVITY, IN THE LIGHT OF THE GUIDELINES LA ID DOWN BY THE HON'BLE UTTARAKHAND HIGH COURT IN THE CASE OF ANCHAL HOTELS PVT. LTD. (SUPRA). THE ORDER PASSED BY THE LD. CIT(A) ALLOWING THE CLAIM OF THE ASSESSSEE IS THEREFORE SET ASIDE AND THE ISSUE RESTORED BACK TO THE AO FOR DEN OVO ADJUDICATION AFRESH. NEEDLESS TO ADD THAT THE ASSESSEE BE GIVEN DUE OPPO RTUNITY OF HEARING IN THIS REGARD. 18. IN THE RESULT, THE APPEAL OF THE REVENUE IS AL LOWED FOR STATISTICAL PURPOSES. ORDER PRONOUNCED IN THE OPEN COURT. SD/- SD/- (S.S. GODARA) (ANNAPURNA GUPTA) JUDICIAL MEMBER ACCOUNTANT MEMBER DATED : 30/05/19 AG COPY TO: THE APPELLANT, THE RESPONDENT, THE CIT, TH E CIT(A), THE DR