THE COMMISSIONER OF INCOME TAX V. M/S VIJAYA PRECISION DIES(P)LTD

ITA/221/2009

AI Insights

The case revolves around an appeal by the Commissioner of Income-Tax and the Assistant Commissioner of Income-Tax against M/s. Vijay Precision Dies (P) Ltd., concerning the deductions claimed under Section 80-C and 80-IA(9) of the Income Tax Act, 1961 for the assessment year 2004-05. The Assessing Officer had allowed the deductions without reducing the business profit considered for granting relief under Section 80-IA, which was contested by the Commissioner under Section 263. The ITAT, referencing a similar case ('Mittal Clothing Company'), ruled that the Assessing Officer's decision was correct and the Commissioner had no jurisdiction to revise the order. The High Court's decision affirmed the ITAT's ruling, emphasizing that the Assessing Officer's order was not erroneous or prejudicial to the revenue's interest.

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 733398 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 12-01-2015
• Assessment Year: misc
• Other Referred Cases: COMMISSIONER OF INCOME-TAX AND ANOTHER v. MILLIPORE INDIA P. LTD & CONNECTED APPEALS
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: A SHANKAR; M LAVA
• Assessee Lawyers: K V ARAVIND
• Keywords: Business Profit; Deductions; Erroneous; Jurisdiction; Prejudicial; Revenue
• Section: 263; 80-C; 260-A; 80-IA(9); 80-H

Judgement Text

" 1 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 12TH DAY OF JANUARY, 2015 PRESENT THE HON' BLE MR. JUSTICE N. KUMAR AND THE HON' BLE MR. JUSTICE B. VEERAPPA INCOME TAX APPEAL No.221/2009 BETWEEN: 1. THE COMMISSIONER OF INCOME-TAX C.R. BUILDING, 55/1, SHILPASHREE VIDYARANYA COMPLEX VISHVESHWARANAGAR MYSORE-570 008. 2. THE ASSISTANT COMMISSIONER OF INCOME-TAX, CIRCLE-1(2), 55/1, SHILPASHREE, VIDYARANYA COMPLEX VISHVESHWARANAGAR MYSORE-570 008. ... APPELLANTS (BY SRI. K V ARAVIND, ADV.) AND: M/S. VIJAY PRECISION DIES (P) LTD., 90, K.R.S. ROAD, METAGALLI MYSORE. ... RESPONDENT (BY SRI. A. SHANKAR & SRI. M. LAVA, ADVS.) … 2 THIS ITA IS FILED UNDER SECTION 260-A OF THE INCOME TAX ACT, 1961 ARISING OUT OF ORDER DATED 01.12.2008 PASSED IN ITA NO. 722/BNG/2008, FOR THE ASSESSMENT YEAR 2004- 05, PRAYING TO FORMULATE THE SUBSTANTIAL QUESTIONS OF LAW STATED THEREIN AND TO ALLOW THE APPEAL AND SET ASIDE THE ORDER PASSED BY THE ITAT, BANGALORE IN ITA No.722/BNG/2008, DATED 01.12.2008 AND CONFIRMING THE ORDER OF THE APPELLATE COMMISSIONER AND CONFIRM THE ORDER PASSED BY THE ASSISTANT COMMISSIONER OF INCOME TAX, CIRCLE-1(2), MYSORE IN THE INTEREST OF JUSTICE AND EQUITY. THIS ITA COMING ON FOR HEARING THIS DAY, N. KUMAR, J., DELIVERED THE FOLLOWING: JUDGMENT The revenue has preferred this appeal against the order passed by the Tribunal which has held that the Commissioner of Income-tax had no jurisdiction under Section 263 of the Income-tax Act, 1961 (hereinafter referred to as ‘Act’), in view of the order passed by the Assessing Authority is neither erroneous nor prejudicial to the interest of the revenue. 3 2. The assessee claimed deductions under Section 80-C and 80-IA(9) of the Act. The Assessing Authority without noticing the provisions of Section 80-IA(9) allowed both the deductions. The Commissioner invoked Section 263 and initiated the proceedings. After hearing the parties he was of the view that the Assessing Officer without reducing the business profit considered for granting relief under Section 80-IA as granted deductions under Section 80-H of the Act on the business profits. Therefore, he was of the view that the order of the Assessing Officer is erroneous and prejudicial to the interest of the revenue. 3. In appeal by the assessee, the Tribunal held the order passed by the Assessing Officer was in consonance with the order of the Tribunal referred in the case of ‘Mittal Clothing Company’. Therefore, it held the initiation of the proceedings under Section 263 of the Act was without jurisdiction and accordingly set aside the order. This appeal 4 is admitted to consider the following substantial question of law: “Whether the Tribunal was correct in holding that the order of the Commissioner passed u/s.263 of the Act is without jurisdiction as the order of assessment was not erroneous and prejudicial to the interest of the revenue without examining the provisions of Section 80IA(9) of the Act relied on by the Commissioner to pass order u/s.263 of the Act?” 4. This Court had an occasion to consider the said substantial question of law in the case of COMMISSIONER OF INCOME-TAX AND ANOTHER v. MILLIPORE INDIA P. LTD & CONNECTED APPEALS (2012, 341 ITR 219 (KARN). After considering the statutory provisions and several judgments of this Court, the said question was answered by this Court and held as under: “In so far as the substantial question of law regarding the jurisdiction of the Commissioner to revise the orders passed by the assessing 5 authority on the ground that he holds a different view from the view expressed by the assessing authority is concerned we do not intend to go into the said question as in view of the law declared by us the assessee is going to benefit even otherwise, in view of the same we pass the following order: (1) I.T.A. Nos.3213 of 2005, 139 of 2007, 137 of 2007, 154 of 2007, 155 of 2007, 156 of 2007, 1086 of 2006, 109 of 2007, 73 of 2006, 75 of 2006, 62 of 2007, 64 of 2007, 674 of 2007, 36 of 2007, 234 of 2009 and 54 of 2008 are dismissed. (2) I.T.A. Nos.379 of 2008, 704 of 2008, 227 of 2009, 216 of 2008, 429 of 2008, 165 of 2008, 113 of 2010 and 87 of 2010 are allowed, setting aside the order of the Tribunal and restoring the order of the Commissioner of Income- tax (Appeals) granting relief to the assessee and if necessary the assessing authority shall pass consequential orders giving the benefit to the assessee as declared under this judgment wherever it is necessary” 5. This Court held that the assessee is entitled for the benefit claimed. In view of the same, the Commissioner 6 of Income-tax was not justified in initiating the proceedings under Section 263, that is what has been held by the Tribunal. Therefore, we do not see any error in the impugned order. The substantial question of law is answered in favour of the assessee and against the revenue. No merit. Appeal is dismissed. Sd/- JUDGE Sd/- JUDGE Sbs* "