The Commissioner Of Income Tax-3 v. M/S.nirupama Traders Pvt.ltd

IN THE HIGH COURT OF JUDICATURE AT BOMBAYO. O. C. J. INCOME TAX APPEAL (L) NO.2967 OF 2009 The Commissioner of Income Tax-3. ...Appellant. Vs. M/s.Nirupama Traders Pvt.Ltd. ...Respondent. .... Mr.Vimal Gupta for the Appellant.Mr.J.D. Mistry, Sr.Advocate with Mr.Raj Darak and Mr.P.C.Tripathi for the Respondent. ..... J.P.DEVADHAR, JJ. CORAM : DR.D.Y.CHANDRACHUD AND May 6, 2010. P.C. : In the appeal by the Revenue under Section 260A of the Income Tax Act, 1961, the following three questions of law have been formulated: “A. Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in quashing the order of the Commissioner of Income Tax passed u/s.263 of Income Tax Act? -B. Whether on the facts and in the circumstances of the case and in law, the Tribunal was correct in holding that the assessee is entitled for deduction u/s.80M of the Income Tax Act in respect of the dividend distributed after 31-03-2003? -C. Whether on the facts and in the circumstances of the case and in law, the Tribunal was right in ignoring the non-obstante clause in section 115-O which clearly restricts the applicability of section 80M?” 2.Of the aforesaid questions, only Question (A) would arise for determination from the order passed by the Tribunal since the Tribunal has, by its impugned decision dated 23 July 2009, set aside the invocation of the jurisdiction under Section 263 of the Act. 3.The Tribunal while holding that a recourse to the provisions of Section 263 was not proper, adverted to an order passed by it on 17 April 2009 in ITA 194/M/2008. That case which arose in relation to an assessee by the name of Neelam Mercantile Pvt. Ltd. was held to be similar to the facts of the instant case. The contention of the assessee was that the Assessing Officer had taken a possible view on whether the assessee was entitled to a deduction under Section 80M and that in the circumstances, by the judgment of the Supreme Court in the case of Malabar Industrial Company Ltd., 243 ITR 83, recourse to the provisions of Section 263 was impermissible. The attention of this Court was also drawn to the fact that in a similar case, Commissioner of Income Tax Vs. Nikhil Investment Co.Pvt. Ltd. (Income Tax Appeal (L) 3006 of 2009, decided on 15 March 2010, this Court has in fact, relied upon the order passed by the Tribunal in the instant case in support of the conclusion that where the Assessing Officer has taken a possible view, recourse to Section 263 would not be warranted. As in the case before this Court in Nikhil Investment (supra), in the present case also it would appear from the record of the proceedings before the Tribunal that the assessee had by its letter dated 11 August 2005 furnished a detailed justification to the Assessing Officer in support of the claim for a deduction under Section 80M. 4.In the circumstances, since the Assessing Officer is found to have taken a possible view, no fault can be found with the order passed by the Tribunal. No substantial question of law would arise. The appeal is dismissed. ( Dr.D.Y.Chandrachud, J.) ( J.P.Devadhar, J.)