The Pr.commissioner Of Income Tax-2 v. M/S.eureka Medicare Pvt. Ltd)And

ITL06.19 & 37.19.odt1 IN THE HIGH COURT OF JUDICATURE AT BOMBAY,NAGPUR BENCH : NAGPUR. INCOME TAX APPEAL NO.06 OF 2019 (The Pr.Commissioner of Income Tax-2 Vs. M/s.Eureka Medicare Pvt. Ltd)AND INCOME TAX APPEAL NO.37 OF 2019 (The Pr.Commissioner of Income Tax-2 Vs. M/s.Eureka Medicare Pvt. Ltd) ------------------------------------------------------------------------------------------------Office Notes, Office Memoranda of Court's or Judge's OrderCoram, appearances, Court's Ordersor directions and Registrar's order Shri Anand Parchure, Advocate for appellant in both appeals.Shri K.P.Dewani, Advocate for respondent in both appeals. CORAM:- A.S.CHANDURKAR AND N.B.SURYAWANSHI, JJ.DATED:- JANUARY 15, 2021. Both these appeals are being decided by this common order. 2.For the assessment year 2012-13 the Assessing Officer allowed thededuction claimed by the assessee under Section 80 IB (11-C) of the IncomeTax Act, 1961 (for short, ‘the said Act’). The Principal Commissioner ofIncome Tax however invoked the jurisdiction under Section 263 (1) of thesaid Act and after holding that such deduction had been granted by theAssessing Officer without making proper enquiry or verification, set asidethe same and directed the Assessing Officer to pass a fresh assessment orderafter verifying the admissibility of the claim of deduction. In the appealfiled by the assessee challenging that order, the Income Tax AppellateTribunal has allowed the same by quashing the order passed by the PrincipalCommissioner of Income Tax after recording a finding that the AssessmentOfficer after verifying all records had permitted such deduction. 3.The assessee is a company which provides medical facilities topatients. For the assessment year 2012-13 it showed income from interestof Rs.5,99,000/-, income from rent at Rs.2,04,000/- and referral income ofRS.1,00,58,000/-. Further income of Rs.2,78,000/- from running nursingcollege was also received. Exemption was claimed under Section 80 IB(11- ITL06.19 & 37.19.odt2 C) of the said Act. 4.The Assessing Officer scrutinized the claim and thereafter theassessee was called upon to furnish various documents. Similarly detailedquestionnaire and summons under Section 131 of the said Act was alsoissued to the assessee. After verifying the documents in question theAssessing Officer was pleased to permit deduction as allowable underSection 80 IB (11-C) of the said Act. The Principal Commissioner of IncomeTax after finding that necessary verification was not done, set aside orderpassed by the Assessing Officer under Section 143(3) of the said Act holdingit to be erroneous insofar as it was prejudicial to the interests of therevenue. He also observed that in absence of all necessary details thededuction as claimed was not allowable. The assessment order was setaside and the Assessing Officer was directed to pass a fresh assessmentorder. Thereafter the Income Tax Appellate Tribunal found that necessaryenquiry as regards the nature of expenditure incurred by the assessee hadbeen made by the Income Tax Officer and detailed explanation was alsofurnished by the assessee. All this material was on record and merelybecause according to the Principal Commissioner of the Income Tax theorder was erroneous, there was no reason to invoke jurisdiction underSection 263(1) of the said Act. On that count the order passed underSection 263 of the said Act came to be set aside. 5.Shri Anand Parchure, learned counsel for the appellant submittedthat the Principal Commissioner of Income Tax was justified in invokingjurisdiction under Section 263 of the said Act as he found that theexemption granted by the Assessing Officer was without verifying relevantmaterial entitling such exemption and therefore the assessment order waserroneous as well as prejudicial to the interests of the revenue. There wasno reason for the Tribunal to set aside the order passed by the PrincipalCommissioner of Income Tax and moreover no prejudice was caused to theassessee in view of the fact that the proceedings had been remanded toenable the Assessing Officer to re-examine the record and pass a fresh order.He further submitted that mere fact that in the earlier assessment order such ITL06.19 & 37.19.odt3 similar deduction had been granted cannot be said to be a reason for notinvoking jurisdiction under Section 263 of the said Act in the backdrop ofthe fact that no proper enquiry had been made by the Assessing Officer. Hetherefore submitted that the impugned order passed by the Tribunal holdingexercise of jurisdiction by the Principal Commissioner of Income Tax underSection 263 of the said Act to be bad in law gave rise to a substantialquestion of law. 6.Shri K. P. Dewani, learned counsel for the respondent submitted thatthe Assessing Officer after making all necessary enquiry and verification hadfound that the exemption as claimed by the assessee was liable to begranted under Section 80 IB (11-C) of the said Act. He submitted that whiledoing so summons under Section 131 of the said Act was issued by theAssessing Officer and the questionnaire submitted to the assessee was dulyanswered. On such satisfaction being arrived at the exemption came to begranted. There was no basis for the Principal Commissioner of Income Taxto conclude that the exemption had been granted without properverification or enquiry. He specifically referred to Question no.7 of the saidquestionnaire which sought production of details of investment made anddeduction claimed under Chapter VI A of the said Act. Relying upon thedecisions in Income Tax Appeal No.32 of 2003 (The Commissioner ofIncome Tax Vs. Dinshaw Frozen Food Ltd., Nagpur) and Income Tax AppealNo.39/2004 (Commissioner of Income Tax-I Vs. M/s. Dinshaw Dairy FoodsLtd.) he submitted that in assessment year 2011-12 similar exemption hadbeen claimed and granted under Section 80 IB (11- C) of the said Act. Thepresent assessment order which was for assessment year 2012-13 was notthe initial assessment order. Hence there was no reason for the PrincipalCommissioner of Income Tax to invoke jurisdiction under Section 263 of thesaid Act. The Tribunal having rightly appreciated this aspect was justified insetting aside the order passed by the Principal Commissioner of Income Taxand therefore the impugned order did not give rise to any substantialquestion of law. ITL06.19 & 37.19.odt4 ITL06.19 & 37.19.odt4 7.We have heard the learned counsel for the parties at length. It maybe noted that the learned counsel for the parties were called upon toproduce before us the questionnaire and summons under Section 131 of thesaid Act by the Assessing Officer to consider whether the observation madein the order passed by the Tribunal that proper verification and enquiry wasmade by the Assessing Officer before granting such exemption was correct.The learned counsel for the parties placed such documents on record andwe have perused the same. It is found that the Assessment Officer did makenecessary enquiry by issuing questionnaire to the assessee for theassessment year 2012-13 seeking proof of deduction along with the detailsof deduction as well as exemption claimed by the Assessee. Similar noticeunder Section 142(1) of the said Act was also replied to by the assessee andit is in that backdrop that the Assessment Officer was pleased to allow thededuction under Section 80 IB (11-C) of the said Act. The learned Membersof the Tribunal thus found that the reason for invoking jurisdiction by thePrincipal Commissioner of Income Tax under Section 263 of the said Act hadno foundation. Further if certain assessment order was made by the IncomeTax Officer the same could not be branded as erroneous by the PrincipalCommissioner of Income Tax merely because another view was possible. Theorder of the Income Tax Officer was required to be shown to have beenmade without any enquiry and not accordance with law. These aspectswere missing in the said assessment order. We find that this observation ofthe Tribunal is correct considering the nature of verification and enquirymade by the Assessment Officer. 8.It is also pertinent to note that in the earlier assessment year 2011-12similar deduction was claimed by the assessee under Section 80 IB (11-C) ofthe said Act and it was granted by the Assessing Officer. In the decisionsrelied upon by the learned counsel for the respondent this position has beenconsidered and it was observed that similar deduction having been allowedin the earlier year could not have been denied in the subsequent assessmentyears. Thus after perusing the material placed on record including thequestionnaire, summons under Section 131 of the said Act and notice under ITL06.19 & 37.19.odt5 Section 142(1) of the said Act, we are satisfied that the Tribunal did notcommit any error in holding that such enquiry was made by the AssessingOfficer and hence there was no reason for the Principal Commissioner ofIncome Tax to invoke jurisdiction under Section 263 of the said Act. Thus in our view Income Tax Appeal No.6/2019 relating toassessment year 2012-13 and Income Tax Appeal No.37/2019 relating toassessment year 2013-14 do not give rise to any substantial question of lawas sought to be urged by the learned counsel for the appellant.Consequently, the appeals stand dismissed leaving the parties to bear theirown costs. JUDGE JUDGE Andurkar..