Parakar Hospital & Research Institute Pvt. Ltd., V. Principal Commissioner of Income-tax : 2,

ITA 820/PUN/2016

• Counselvise Citation: [2018] 119 COUNSELVISE.COM (IT) 5449 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 5 month(s) 24 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-10-2018
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 03-10-2018
• Assessment Year: 2012-2013
• Appeal Filed On: 22-04-2016
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Opportunity of being heard
• Section: 143(3); 80IB; 263; 11

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH A , PUNE , , BEFORE MS. SUSHMA CHOWLA, JM AND SHRI ANIL CHATURVEDI, AM . / ITA NO. 820 /P U N/201 6 / ASSESSMENT YEAR : 2 0 12 - 13 PAR A KAR HOSPITAL & RESEARCH INSTITUTE PVT. LTD., 828, SHIVAJINAGAR, RATNAGIRI 415639 . / APPELLANT PAN: AAFCP0664H VS. THE PR. COMMISSIONER OF INCOME - TAX - 2, KOL HAPUR . / RESPONDENT / APPELLANT BY : S HRI NIKHIL PATHAK / RESPONDENT BY : SHRI RAJEEV KUMAR, CIT / DATE OF HEARING : 0 3 . 1 0 .201 8 / DATE OF PRONOUNCEMENT : 16 . 1 0 .201 8 / ORDER PER SUSHMA CHOWLA, J M : TH E APPEAL FILED BY ASSESSEE IS AGAINST ORDER OF PR. CIT - 2 , KOLHAPUR , DATED 1 8 .0 3 .201 6 RELATING TO ASSESSMENT YEAR 20 12 - 13 PASSED UNDER SECTION 263 OF THE INCOME - TAX ACT , 1961 (IN SHORT THE ACT) . 2 . THE ASSESSEE HAS RAISED THE FOLLOWING GROUNDS OF APPEAL: - ITA NO. 820 /P U N/20 1 6 PAR A KAR HOSPITAL & RESEARCH INSTITUTE PVT. LTD . 2 1. THE REVISION ORDER PASSED U/S 263 IS BAD IN LAW AND THE SAME MAY BE DECLARED AS NULL AND VOID SINCE THE ASST. ORDER PASSED U/S 143(3) WAS NEITHER ERRONEOUS NOR PREJUDICIAL TO THE INTEREST OF TH E REVENUE. 2. THE LEARNED PR. COMMISSIONER OF INCOME TAX - 2, KOLHAPUR, (PCIT) ERRED IN LAW AND ON FACTS IN INVOKING THE PROVISIONS OF SECTION 263 OF THE INCOME TAX ACT, 1961 (THE ACT) AND SETTING ASIDE THE ASSESSMENT ORDER DATED 31ST MARCH, 2015 PASSED BY THE ASSESSING OFFICER U/S. 143(3) FOR THE ASSESSMENT YEAR 2010 - 11, FOR A FRESH DETERMINATION OF INCOME AND PROPER EXAMINATION OF FACTS AND LAW. 3. THE LEARNED PCIT FAILED TO APPRECIATE THAT THE LEARNED A.O. HAD ALLOWED THE CLAIM OF DEDUCTION U/S. 80 I B (11 C) AFTER DULY VERIFYING ALL THE CONDITIONS FOR THE ELIGIBILITY OF THE CLAIM OF DEDUCTION MADE BY THE APPELLANT COMPANY AND HENCE, THERE WAS NO QUESTION OF SETTING ASIDE THE ASST. ORDER ON THE GROUND THAT THE DEDUCTION WAS ALLOWED BY THE LEARNED A.O. WITHOU T MAKING PROPER ENQUIRIES. 4. THE LEARNED PCIT ERRED IN INITIATING THE PROCEEDINGS U/S 263 MERELY ON THE DOUBT THAT THE ORDER PASSED BY THE AO APPEARS TO BE WITHOUT BRINGING ON RECORD SUFFICIENT MATERIAL AND DETAILS OF PROPER VERIFICATION THEREOF AND THAT THE ORDER PASSED BY THE AO APPEARS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE WITHIN THE MEANING OF SEC. 263 OF THE ACT. 5. THE LEARNED PCIT FAILED TO APPRECIATE THAT THE APPELLANT COMPANY HAS COMPLIED WITH ALL THE RELEVANT CONDITIONS TO BE ELIGIBLE FOR DEDUCTION U/S 80 I B( 11 C) WHICH ARE ALSO REPRODUCED BY THE PCIT IN THE NOTICE ISSUED U/S. 263 INITIATING THE PROCEEDINGS AND ALL THE ISSUES WERE ALSO VERIFIED BY THE LEARNED A.O. AND HENCE, THERE WAS NO REASON TO HOLD THAT THE ASST. ORDER PASS ED BY THE LEARNED A.O. WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE. 6. THE LEARNED PCIT ERRED IN HOLDING THAT THE AO HAS NOT EXAMINED THE PROVISIONS OF SUB - SECTION (1) & (2) OF SECTION 80IB OF THE ACT WHILE ALLOWING THE CLAIM OF DEDUCTION U/S. 80IB(11C) WITHOUT APPRECIATING THAT THE CONDITIONS LAID DOWN IN SUB - SECTIONS (1) AND (2) ARE NOT RELEVANT F OR THE ELIGIBILITY OF DEDUCTION U/S. 80IB (11C) BECAUSE SUB - SECTION (11C) OF SEC. 80 IB DOES NOT ENVISAGES ANY 'INDUSTRIAL UNDERTAKING' AND THE REFORE, THE QUESTION OF EXAMINATION OF CONDITIONS LAID DOWN IN SUB SECTIONS (1) AND (2) OF SECTION 80IB SIMPLY DID NOT ARISE AND ACCORDINGLY, THE REVISION ORDER PASSED BY THE LEARNED PCIT IS BAD IN LAW AND THE SAME MAY KINDLY BE QUASHED. 7. THE LEARNED PC IT ERRED IN HOLDING THAT THE ORDER OF THE AO IS ERRONEOUS FOR THE REASON OF NOT VERIFYING THE FULFI L LMENT OR OTHERWISE OF THE CONDITIONS U/S. 80 IB (1) & (2) WHICH REASONS ARE DIFFERENT THAN THE REASONS STATED IN THE NOTICE ISSUED UNDER SECTION 263. 8. TH E LEARNED PCIT ERRED IN NOT APPRECIATING THAT THE VIEW TAKEN BY THE LEARNED A.O. WAS CERTAINLY A POSSIBLE VIEW AND THEREFORE, THE ASST . COMPLETED U/S 143(3) COULD NOT BE SAID TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE. 9. THE ORDER OF THE PCIT PASSED U/S 263 OF THE ACT IS NOT IN ACCORDANCE WITH LAW, IS BAD IN LAW AND HENCE BE QUASHED ITA NO. 820 /P U N/20 1 6 PAR A KAR HOSPITAL & RESEARCH INSTITUTE PVT. LTD . 3 3. THE PRESENT APPEAL FILED BY ASSESSEE IS AGAINST ORDER PASSED BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT. 4. BRIEFLY, IN THE FACTS OF THE CASE, THE ASSESSEE HAD FURNISHED RETURN OF INCOME DECLARING NIL INCOME. THE CASE OF ASSESSEE WAS PICKED UP FOR SCRUTINY AND ASSESSMENT ORDER UNDER SECTION 143(3) OF THE ACT WAS PASSED ON 30.03.2015 AFTER ACCEPTING PLEA OF THE ASSESSEE THAT IT IS ENTITLED TO CLAIM D EDUCTION UNDER SECTION 80IB(11C) OF THE ACT SINCE THE ASSESSEE WAS RUNNING MULTISPECIALTY HOSPITAL AT RATNAGIRI. THE COMMISSIONER NOTED THAT THE ASSESSEE HAD CLAIMED DEDUCTION UNDER SECTION 80IB(11C) OF THE ACT AT 40,44,568/ - . HE FURTHER NOTED THE COND ITIONS PRESCRIBED IN THE SAID SUB - SECTION AND OBSERVED THAT FOR ASSESSMENT YEAR 2010 - 11 IT WAS SEEN THAT CONSTRUCTION OF HOSPITAL WAS MADE ON LEASEHOLD LAND OF THE DIRECTOR OF THE COMPANY AND EVEN PERMISSION WAS GRANTED FOR CONSTRUCTION BEFORE INCORPORATIO N OF ASSESSEE COMPANY. FURTHER, EVEN THE COMPLETION CERTIFICATE WAS ISSUED BY RATNAGIRI MUNICIPAL CORPORATION ON 10.07.2009 IN THE NAME OF DIRECTOR. THE COMMISSIONER IN ASSESSMENT YEAR 2010 - 11 FURTHER NOTED THAT THE ASSESSING OFFICER HAD FAILED TO CALL F OR SUCH DETAILS AND NO PROPER EXAMINATION WAS DONE TO ASCERTAIN THE GENUINENESS AND FULFILLMENT OF ELIGIBILITY CONDITIONS BEFORE ALLOWING DEDUCTION UNDER SECTION 80IB(11C) OF THE ACT. THE ASSESSMENT ORDER THUS, WAS FOUND TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND NOTICE UNDER SECTION 263 OF THE ACT WAS ISSUED TO THE ASSESSEE. THE COMMISSIONER TOOK NOTE OF THE FACT THAT ASSESSMENT ORDER PASSED FOR ASSESSMENT YEAR 2010 - 11 WAS SET ASIDE BY HIS PREDECESSOR VIDE ORDER UNDER SECTION 263 OF T HE ACT ON 30.03.2015. IN VIEW OF ABOVE SAID FACTS AND CIRCUMSTANCES AND AFTER TAKING NOTE OF VARIOUS JUDICIAL PRECEDENTS, THE COMMISSIONER HELD THE ASSESSMENT ORDER PASSED UNDER SECTION 143(3) OF THE ACT FOR ASSESSMENT YEAR 2012 - 13 TO ITA NO. 820 /P U N/20 1 6 PAR A KAR HOSPITAL & RESEARCH INSTITUTE PVT. LTD . 4 BE ERRONEOUS AND PRE JUDICIAL TO THE INTEREST OF REVENUE AND THE SAME WAS SET ASIDE WITH DIRECTION TO ASSESSING OFFICER TO MAKE FRESH DE NOVO ASSESSMENT AFTER PROPER EXAMINATION OF FACTS AND LAW AND AFFORDING PROPER OPPORTUNITY OF BEING HEARD TO THE ASSESSEE. 5. THE ASSESSEE IS IN APPEAL AGAINST THE ORDER OF COMMISSIONER. 6. THE LEARNED AUTHORIZED REPRESENTATIVE FOR THE ASSESSEE REFERRED TO THE SHOW CAUSE NOTICE ISSUED UNDER SECTION 263 OF THE ACT AND POINTED OUT THAT PROCEEDINGS WERE INITIATED BY THE COMMISSIONER FOLLOWING T HE ORDER UNDER SECTION 263 OF THE ACT IN ASSESSMENT YEAR 2010 - 11. HE THEN, REFERRED TO THE ORDER OF TRIBUNAL, WHICH IS PLACED AT PAGES 105 TO 111 OF PAPER BOOK, WHEREIN THE TRIBUNAL IN ITA NO.795/PUN/2015, RELATING TO ASSESSMENT YEAR 2010 - 11, ORDER DATED 31.10.2017 HAD HELD THE ORDER PASSED BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT AS INVALID AND BAD IN LAW. 7. THE LEARNED DEPARTMENTAL REPRESENTATIVE FOR THE REVENUE ON THE OTHER HAND, PLACED RELIANCE ON THE ORDER OF COMMISSIONER PASSED UNDER SECTIO N 263 OF THE ACT. 8. WE HAVE HEARD THE RIVAL CONTENTIONS AND PERUSED THE RECORD. THE ISSUE ARISING IN THE PRESENT APPEAL IS AGAINST EXERCISE OF JURISDICTION BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT. THE PROCEEDINGS WERE INITIATED BY ISSUE OF SHO W CAUSE NOTICE AND THE BASIC REASON FOR THE SAID SHOW CAUSE NOTICE WAS SIMILAR PROCEEDINGS UNDER SECTION 263 OF THE ACT BEING CARRIED OUT BY THE PREDECESSOR OF COMMISSIONER IN ASSESSMENT YEAR 2010 - 11. THE ASSESSEE WAS MULTISPECIALTY HOSPITAL AND HAD CLAIM ED DEDUCTION UNDER SECTION 80IB(11C) OF ITA NO. 820 /P U N/20 1 6 PAR A KAR HOSPITAL & RESEARCH INSTITUTE PVT. LTD . 5 THE ACT. THE COMMISSIONER WAS OF THE VIEW THAT ASSESSING OFFICER HAD FAILED TO TAKE INTO ACCOUNT THE CONDITIONS TO BE FULFILLED BY ASSESSEE BEFORE GRANTING DEDUCTION UNDER SECTION 80IB(11C) OF THE ACT AND HENCE, ASS ESSMENT ORDER PASSED BY THE ASSESSING OFFICER WAS HELD TO BE ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE IN ASSESSMENT YEAR 2010 - 11. FOLLOWING SIMILAR REASONING, THE COMMISSIONER ALSO EXERCISED JURISDICTION FOR ASSESSMENT YEAR 2012 - 13, AGAINST WH ICH THE ASSESSEE IS IN APPEAL BEFORE US. 9. WE FIND THAT THE TRIBUNAL IN ASSESSEES OWN CASE IN ASSESSMENT YEAR 2010 - 11 HAD TAKEN NOTE OF THE PROVISIONS OF SECTION 80IB(11C) OF THE ACT AND CLAIM MADE BY ASSESSEE AS TO WHETHER IT HAD FULFILLED THE CONDITIO NS AND IT WAS HELD THAT THE ASSESSING OFFICER DURING ASSESSMENT PROCEEDINGS HAD VERIFIED THE CLAIM OF ASSESSEE AND HAD FOUND THAT ALL THE CONDITIONS WERE SATISFIED BY THE ASSESSEE, HENCE THE ORDER ALLOWING DEDUCTION CLAIMED BY ASSESSEE UNDER THE SAID SUB - S ECTION DOES NOT MAKE THE ORDER PREJUDICIAL TO THE INTEREST OF REVENUE. THE TRIBUNAL FURTHER HELD THAT EXERCISE OF REVISIONARY POWERS BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT WAS NOT WARRANTED IN THE FACTS OF CASE. THE RELEVANT FINDINGS OF TRIBUNA L ARE IN PARAS 10 TO 12 OF THE ORDER DATED 31.10.2017, WHICH ARE BEING REFERRED TO BUT ARE NOT BEING REPRODUCED FOR THE SAKE OF BREVITY. 10. THE ISSUE ARISING IN THE PRESENT APPEAL BEFORE US IS ALSO AGAINST EXERCISE OF REVISIONARY POWERS BY THE COMMISSION ER UNDER SECTION 263 OF THE ACT ON THE SAME GROUNDS AS RAISED IN ASSESSMENT YEAR 2010 - 11. SINCE THE ISSUE HAS BEEN DECIDED IN FAVOUR OF ASSESSEE AND THE ORDER OF COMMISSIONER PASSED UNDER SECTION 263 OF THE ACT IN ASSESSMENT YEAR 2010 - 11 HAS BEEN HELD TO BE BOTH INVALID AND BAD IN LAW, FOLLOWING THE SAME PARITY OF REASONING, WE HOLD THAT ITA NO. 820 /P U N/20 1 6 PAR A KAR HOSPITAL & RESEARCH INSTITUTE PVT. LTD . 6 EXERCISE OF REVISIONARY POWERS BY THE COMMISSIONER UNDER SECTION 263 OF THE ACT IN ASSESSMENT YEAR 2012 - 13 DO NOT SURVIVE. HENCE, THE ORDER PASSE D BY THE COMMISSIONER IS HELD TO BE INVALID AND BAD IN LAW AND CONSEQUENTLY, GROUNDS OF APPEAL RAISED BY THE ASSESSEE ARE ALLOWED. 1 1 . IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWED. ORDER PRONOUNCED ON THIS 16 TH DAY OF OCTOB ER , 201 8 . SD/ - SD/ - (ANIL CHATURVEDI) (SUSHMA CHOWLA ) / ACCOUNTANT MEMBER / JUDICIAL MEMBER / PUNE ; DATED : 16 TH OCTOB ER , 201 8 . GCVSR / COPY OF THE ORDER IS FORWARDED TO : 1. / THE APPELLANT ; 2. / THE RESPONDENT; 3 . 4 . , , / DR A , ITAT, PUNE ; / GUARD FILE . / BY ORDER , // TRUE COPY // / SR. PRIVATE SECRETARY , / ITAT, PUNE