Principal Commissioner Of Income Tax-2 v. Oral Order

IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/TAX APPEAL NO. 151 of 2020 ==========================================================PRINCIPAL COMMISSIONER OF INCOME TAX-2 VersusELITECORE TECHNOLOGIES PVT. LTD. ==========================================================Appearance:MRS MAUNA M BHATT(174) for the Appellant(s) No. 1 for the Opponent(s) No. 1 ========================================================== CORAM: HONOURABLE THE CHIEF JUSTICE MR. VIKRAM NATHandHONOURABLE MR. JUSTICE J.B.PARDIWALA Date : 10/09/2020 ORAL ORDER (PER : HONOURABLE MR. JUSTICE J.B.PARDIWALA) 1.This tax appeal under Section 260A of the Income Tax Act, 1961 is at the instance of the revenue and is directed against the order passed by the Income Tax Appellate Tribunal, “B” Bench, Ahmedabad dated 04.09.2019 in the ITA No.1356/Ahd/2016 for the A.Y. 2009-10. The Revenue has proposed a solitary question of law for the consideration of this Court. The same reads thus; "Whether the Appellate Tribunal has erred in law and on facts by setting aside and quashing the order passed by the Principal Commissioner of Income Tax under section 263 of the Act?" 2.It appears from the materials on record that the assessee filed its return of income for the A.Y.2009-10 on 27.09.2009, declaring its total income at Rs. Nil and claimed deduction of Rs.3,96,60,132/- under Section 10A of the Act, 1961 as well as set off of the business loses to the tune of Rs.2,91,07,555/- for the A.Y.2008-09 against the income of the year under consideration. The assessee also claimed carry forward business loss of Rs.3,70,52,213/- pertaining to the A.Y.2008-09 for set off in the subsequent years. The assessment was completed in accordance with the above claim. The tax came to be paid under the MAT for the income of Rs.4,77,79,483/- under Section 115JB of the Act. 3.For the year under consideration, the assessee claimed deduction of Rs.3,96,60,132/- under Section 10A of the Act. The asseesseee had set off business loss of Rs.2,91,07,555/- pertaining to A.Y.2008-09 against the income of the current year. 4.The Principal Commissioner took up the assessment order in suo motu revision in exercise of his powers under Section 263 of the Act on the ground that the assessment order was erroneous and prejudicial to the interest of Revenue. The Principal Commissioner took the view that the Assessing Officer had failed to follow the principle of carry forward and a set off as brought out in Section 10A of the Act. 5.The Principal Commissioner, vide order dated 30[th] March, 2016, set aside the order passed by the Assessing Officer under Section 143(3) read with Section 144C of the Act and directed the Assessing Officer to re-frame the assessment after conducting the necessary inquiry. 6.The assessee, being dissatisfied with the order passed by the Principal Commissioner, referred to above, preferred an appeal before the Appellate Tribunal. The assessee succeeded before the Appellate Tribunal. The Appellate Tribunal allowed the appeal filed by the assessee and set aside the order passed by the Principal Commissioner. The Appellate Tribunal, while allowing the appeal of the assessee, held as under; 5.The Principal Commissioner, vide order dated 30[th] March, 2016, set aside the order passed by the Assessing Officer under Section 143(3) read with Section 144C of the Act and directed the Assessing Officer to re-frame the assessment after conducting the necessary inquiry. 6.The assessee, being dissatisfied with the order passed by the Principal Commissioner, referred to above, preferred an appeal before the Appellate Tribunal. The assessee succeeded before the Appellate Tribunal. The Appellate Tribunal allowed the appeal filed by the assessee and set aside the order passed by the Principal Commissioner. The Appellate Tribunal, while allowing the appeal of the assessee, held as under; "In view of the ratio laid down by the Hon’ble Jurisdictional High Court that the deduction u/s 10A has to be allowed before set off of unabsorbed loss and depreciation of non-eligible business unit of assessee. We find no justification in such order passed by the Learned PCIT who has not taken into consideration this particular aspect of the matter though the same was brought to his notice by the assessee by and under reply dated 21.03.2016 hence relying upon the ratio laid down by the Jurisdictional High Court as discussed above, we find no justification in the order impugned before us which has re-opened the issue u/s 263 of the Act whereas, we find that the order passed by the Learned A0 is just and proper and in terms of the ratio laid down by the Jurisdictional High Court. There is nothing erroneous found in the order of the Learned AO, neither it is prejudicial to the instant of the Revenue. None of the conditions is being fulfilled by the order passed by the Learned PCIT in order to invoke the provision of section 263 of the Act in order to reopen the assessment of the appellant company. Hence, the order impugned is being devoid of merit and thus quashed." 7.Having heard Ms. Bhatt, the learned senior counsel appearing for the Revenue and having gone through the materials on record, we see no good reason to disturb the order passed by the Appellate Tribunal. 8.In the result, this appeal fails and is hereby dismissed. (VIKRAM NATH, CJ) (J. B. PARDIWALA, J) Vahid