Itxa.1879.13.Odt v. S.s.deshpande3 / 6

IN THE HIGH COURT OF JUDICATURE AT BOMBAYORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO. 1879 OF 2013 Commissioner of Income Tax-4 Vs.M/s Shreepati Holdings & Finance Pvt. Ltd. ..Appellant ..Respondent .... Mr. Suresh Kumar, Advocate for Appellant.Mr. Atul Jasani, Advocate for Respondent. ....CORAM : M.S. SANKLECHA & G.S. KULKARNI, JJ.DATED : 5 OCTOBER 2015 P.C.: This appeal by the revenue under Section 260A of theIncome Tax Act, 1961 (the 'Act') challenges the order dated 6February 2013 passed by the Income Tax Appellate Tribunal (the'Tribunal'). The Assessment Year involved is A.Y. 2007-08. 2.Mr. Suresh Kumar, the learned Counsel for the appellant- revenue urges the following question of law for our consideration: “Whether on the facts and the circumstances of thecase, the Tribunal was justified in law in, quashingorder u/s 263 of the Act without going into themerits of the case?” 3.The Assessing Officer by an order dated 24 December2009 determined the respondent-asseesse's total income at Rs.17.13crores under Section 143(3) of the Act. This was after allowingrebate of Rs.4.36 crores under Section 88E of the Act. Thereafter,the Assessing Officer by an order dated 26 April 2010 allowed arectification application working out the rebate under Section 88Eof the Act to Rs.4.80 crores. 4.Thereafter the Commissioner of Income Tax (the 'CIT') inexercise of powers under Section 263 of the Act passed an order on15 March 2012. By the above order, the CIT directed the AssessingOfficer to reframe the assessment denovo after allowing rebateunder Section 88E of the Act on more careful examination. 5.Being aggrieved, the respondent-assessee carried the issuein appeal to the Tribunal. The impugned order allowed therespondent-assessee's appeal by holding that merely because theCIT has a different view in respect of the claim made for rebateunder Section 88E of the Act, would not warrant exercise of 2 / 6 jurisdiction under Section 263 of the Act. Further more carefulexamination would not warrant exercising of jurisdiction underSection 263 of the Act as it would then be a case of inadequateenquiry and not lack of enquiry. Inadequate enquiry does notjustify invoking jurisdiction under Section 263 of the Act. 6.We find that that there is no prescribed formula underSection 88E of the Act to determine the quantum of the rebatethereunder. Therefore the same has to be computed on areasonable and scientific manner by the Assessing Officer. Furtherthe impugned order has placed reliance upon the decision of thisCourt in CIT Vs. Gabriel India Ltd.[1] wherein this Court held thatthe order cannot be held to be erroneous merely because accordingto the CIT, the order should have been written more elaborately orfor substituting the view of the Assessing Officer with that of theCIT. The Court held that merely because the CIT had a differentview from that reached by the Assessing Officer would not by itselfmake the view of the Assessing Officer erroneous. To be anerroneous order it must be in breach of law. It is axiomatic that1. 203 ITR 108 jurisdiction under Section 263 of the Act can only be exercised oncumulative satisfaction of the twin conditions viz. of the order beingerroneous in law and the order being prejudicial to the interest ofthe revenue. Thus in this case, one of the two conditions precedentto exercise jurisdiction under Section 263 of the Act viz. Order beingerroneous in law is not satisfied. jurisdiction under Section 263 of the Act can only be exercised oncumulative satisfaction of the twin conditions viz. of the order beingerroneous in law and the order being prejudicial to the interest ofthe revenue. Thus in this case, one of the two conditions precedentto exercise jurisdiction under Section 263 of the Act viz. Order beingerroneous in law is not satisfied. 7.Moreover the CIT in exercise of powers under Section 263of the Act directed the Assessing Officer to redetermine the rebateallowable under Section 88E of the Act after holding that the sameneeds more careful examination on the part of the Assessing Officer.This itself indication of the fact that this is not the case of lack ofenquiry, but at the highest it can be a case of inadequate enquiry. Itis settled position in law that inadequate enquiry by itself would notjustify invoking the jurisdiction under Section 263 of the Act unlessthe order is erroneous. In the present facts, the CIT has notexercised jurisdiction under Section 263 of the Act on the groundthat the order is erroneous. We find that the impugned order hascorrectly applied the principles laid down by this Court in Gabriel 4 / 6 (I) Ltd. (supra). Accordingly, the question as formulated does notgive rise to any substantial question of law. Thus not entertained. 8.Accordingly, appeal is dismissed. No order as to costs. [G.S. KULKARNI, J] [M.S. SANKLECHA, J.] CERTIFICATE Certified to be true and correct copy of the original signed Order.