The ITAT, Delhi bench has held that the revisional jurisdiction under section 263 of the Income Tax Act, 1961 cannot be invoked in case of highly debatable issues.
Assessment was completed against the assessee Kalavani Spinners Pvt Ltd under section 143(3) of the Act wherein the AO allowed the deduction claim of the assessee under section 80IA by relying on the decision of Hyderabad Bench of ITAT in the case of ITO vs. S. Venkatiah. The PCIT, later invoked his revisional jurisdiction and found that the return of income filed by assessee as on 30.03.2015 is beyond the due date specified u/s.139(1) of the Act. Further, the audit report in Form 10CCB also uploaded belatedly on 28.03.2015 though the extended date for submission of audit report u/s.44AB of the Act for the relevant assessment year was 30.11.2014. According to the PCIT as per section 80AC of the Act, no deduction u/s.80IA shall be allowed to the assessee, unless he furnishes the return of income for such assessment year on or before due date as specified u/s.139(1) of the Act.
The bench comprising ITAT Vice-President Mr. Mahavir Singh and Accountant Member Mr. Girish Agarwal noted that the PCIT relied on another decision of Coordinate Bench of ITAT, Chennai in the case of P. Bhavani vs. ACIT, and noted that since the jurisdictional ITAT is binding, the deduction allowed by AO u/s.80IA of the Act, the assessment is erroneous and prejudicial to the interest of Revenue.
While quashing the revisional order, the Tribunal held that “We noted that the PCIT himself admits that there are different views possible on this issue and issue is highly debatable. Once the issue is highly debatable no revision is possible invoking the provisions of section 263 of the Act. Hence, we quash the revision order passed by PCIT u/s.263 of the Act and allow the appeal of the assessee.”
Subscribe Taxscan Premium to view the JudgmentSupport our journalism by subscribing to Taxscan AdFree. Follow us on Telegram for quick updates.
