Income Tax Appellate Tribunal - Delhi
Bt Global Communications (India) Pvt. ... vs Pr. Cit- 2, New Delhi on 29 January, 2018
INCOME TAX APPELLATE TRIBUNAL
DELHI BENCH "A": NEW DELHI
BEFORE SHRI B.P. JAIN, ACCOUNTANT MEMBER
AND
SHRI SUDHANSHU SRIVASTAVA, JUDICIAL MEMBER
ITA No.:- 3341/Del /2017
Assessment Year: 2010-11
AND
Stay No. 336/Del/-2017
Asstt. year 2010-11
BT Global Communications Pr. CIT-2
(India) Pvt. Ltd. Room No. 394,
11th Floor, Eros Corporate Vs. C.R. Building
Tower, Opp. International New Delhi -110 002
Trade Tower, Nehru Place,
New Delhi - 110 019
PAN AAACG1534
(Appellant) (Respondent)
Assessee by: Shri Deepak Chopra, Advocate,
Shri Amit Shrivastava, Advocate
Department by : Smt. Aparna Karan, CIT(DR)
Date of Hearing 31/10/2017
Date of 29/01/2018
pronouncement
ORDER
PER SUDHANSHU SRIVASTAVA, J.M.
This appeal has been preferred by the assessee against order dated 30.3.2017 passed by the Ld. Pr.CIT, Delhi-2 for assessment year ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT 2010-11 wherein vide the impugned order passed u/s 263 of the Income Tax Act 1961 (herein after called 'the Act'), the Ld. Pr. CIT has held that the final assessment order dated 31.12.2014 passed u/s 143(3)/144C of the Act was erroneous and prejudicial to the interest of revenue and has set aside the assessment order and directed the AO to make asessment order afresh.
2. The brief facts of the case are that the assessee had filed the return of income declaring total income at NIL after claiming deduction u/s 80IA of the Act amounting to Rs. 20,01,05,275/- and book profit of Rs. 5,33,99,601/-. Subsequently, the assessee revised the return of income declaring total income of Rs. 5,57,99,062/-. During the year under consideration, the assessee had entered into international transactions with its associated enterprises exceeding Rs. 15 crores and, therefore, a reference was made to the Transfer Pricing Officer who made an upward adjustment to the arms' length price amounting to Rs. 7,23,16,22,270/- in relation to the international transactions. The assessee filed objections before the Hon'ble DRP who reduced the adjustment on account of arms' length price to Rs. 6,45,87,22,468/-. The final assessment order was passed on 31.12.2014 at a total income of 2 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT Rs. 6,51,45,21,530/- after allowing assessee deduction u/s 80IA of the Act amounting to Rs. 2,00,01,05,275/-.
2.2 Subsequently on 15.3.2017, the Ld. Pr. CIT issued a show cause notice to the assessee proposing action u/s 263 of the Act on the following issues :-
"(i) On examination of the assessment order along with the data submitted by the company in the course of the assessment proceedings, it is seen that there are certain omissions in the body of the assessment order, which has resulted into wrong determination of total assessed income .
(ii) On a perusal of the assessment record, it is seen that the assessee company is only operating company for rendering networking services such as Sales/Marketing,NetworK Marketing, Network Management Activities etc. and works for the BT Telecommunication Pic (as telecommunication developer) as per agreement after getting license from DoT and in turn assessee company receives remunerations for the same. Since assessee is not engaged in the business of infrastructure (Telecommunication Service) development, therefore not eligible for deduction u/s 80IA (4)(i).
(iii) The assessee has applied for NLD/ILD license, granted by DoT in 2006.Assessee stated that granting of LND/DIL license merely amounted to migration of IP-VPN services which was provided by BTGC from 2003 onward, therefore, assessee company is eligible for deduction u/s80IA even after the license granted after March, 2005. Provision of section 80IA(4)(ii) of the Act is silent on such migration of license. Thus, in absence of such provision in the Act regarding allowance of deduction u/s 80lA even after the migration of existing license to new license after March 2005. Therefore, the assessee is not eligible for deduction u/s 801A(4)(ii).3
ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT
(iv) It is noticed from the audit report form 10CCB that assessee company had commenced its operation from A Y 2004-05 and due to huge losses in starting years from commencement, assessee has not claimed deduction upt6 A Y 2006-07.Afterwards the company started claiming deduction u/s 80lA, 2007- 08 being initial assessment year. For the year under consideratlon i. e. 2010-11 allowance of 100% deduction u/s 80IA is not correct as initial AY is the year in which business is commenced (as defined in section 801B) and not the years in which the assessee is eligible for deduction. Therefore, assessee company is eligible for 100% deduction from A. Y. 2004-05 to A. Y. 2008-09 and thereafter 30% deduction from A. Y. 2009~1() to A.Y. 2013-14.
(v) In View of the above, I find that the assessment order passed u/s 143(3)r.w.s. 144C(3) of the. Act dated 31.12.2017 for A.Y. 2010-11 is erroneous in so far as it is prejudicial to the interest of revenue and hence needs a review u/s 263 of the Act".
2.3 The assessee filed detailed reply to the show cause notice. However, the Ld. Pr. CIT was not convinced by the contentions of the assessee and he proceeded to set aside the order of assessment and directed the AO to make an order afresh on the ground that deduction u/s 80IA (4) (i) was not allowable to the assessee as the assessee was only an operating company and not an enterprise engaged in the business of infrastructure development. Another ground for setting aside the order of final assessment by the Ld. Pr. CIT was that the assessee had migrated to new licence whereas provisions of section 80IA were 4 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT silent on the issue of migration of licence. The Ld. Pr. CIT was also of the view that there was a factual error in determining the initial assessment year from which the deduction u/s 80IA was allowable to the assessee and, therefore, in the year under consideration the assessee company was not eligible for 100% deduction but only for 30% deduction. The AO was directed to make a fresh assessment in light of the directions of the Ld. Pr. CIT.
2.4 Now, the assessee has approached the ITAT and has challenged the action of the Ld. Pr. CIT in holding the final assessment order as erroneous and prejudicial to the interest of the revenue in terms of the section 263 of the Act.
3. The Ld. AR submitted that this was the fourth consecutive year of the assessee for claiming deduction u/s 80IA of the Act and the assessee had been duly allowed the deduction in the earlier three assessment years. Our attention was drawn to assessment orders for assessment years 2008-09 and 2009-10 which were passed u/s 143(3) of the Act and in which the assessee was allowed the benefit of the deduction u/s 80IA. It was submitted that during the year under consideration also the AO had duly verified the claim of the assessee vis a vis deduction u/s 80IA and the same was evidenced by the assesee's reply regarding its 5 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT eligibility towards the claim and the same was available on pages 83 to 105 of the paper book which contained the assessee's submissions before the AO. It was submitted that it was not the case of the Ld. Pr. CIT that no inquiry had been conducted by the AO as the AO had made proper inquiries and the assessee had also submitted voluminous documents in support of its claim.
3.1 It was further submitted that the Ld. Pr. CIT was of the opinion that the assessee company was only an operating company for rendering net work services such as sales/marketing/network marketing/net work management activities etc. whereas it was undisputed that the company had started providing internet services under the terms of IP-VPN licences and had later migrated to NLD/ILD licence. It was submitted that the Ld. Pr. CIT had himself accepted the assessee having migrated to NLD/ILD licence in the impugned order. It was submitted that the internet services were eligible telecommunication services and, therefore, the opinion of the Ld. Pr. CIT that the assessee was only an operating company was factually incorrect and the same cannot be the basis for exercising revisionary powers. It was submitted that since the AO had allowed the assessee's claim after making comprehensive inquires, the 6 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT invocation of revisionary powers of the Ld. Pr. CIT was a mere change of opinion which will not fall within the scope of section 263 of the Act. 3.2 It was also submitted that the Ld. Pr. CIT's assertion that the initial assessment order from which the deduction was allowable was incorrect was also factually wrong because provisions of section 80IA (2) provided that the deduction can be claimed for any ten consecutive years out of the fifteen years beginning from the year in which the undertaking or the enterprise starts providing telecommunication services, It was submitted that the contention of the Ld. Pr. CIT that the first year of claim has to be the year of commencement of the business operations was contrary to the provisions of the Act as well as CBDT Circular No. 1/2016 dated 15th February, 2016.
3.3 On the issue of migration from IP-VPN licence to NLD/ILD licence, it was submitted that the assessee company had commenced providing telecommunication services prior to March 31, 2005 under the terms of IP-VPN licence granted by DoT and during the year 2005 the DoT issued a directive mandatorily requiring migration of IP-VPN services into NLD/ILD. It was submitted that the assessee company continued to offer the eligible telecommunication services without any change. It was submitted that the grant of NLD/ILD licence did not result in creation of 7 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT a new undertaking. It was submitted that the Ld. Pr. CIT's contention that the new undertaking had been created on migration from one licence to another was incorrect the assessee had continued to render the same telecommunication services as were being originally rendered under the IP-VPN licence. It was also submitted that the same infrastructure continued to be used by the assessee under the pre existing arrangement and further the same operational, technical, marketing and administrative personnel were continued to be used by the assessee on migration to the new licence. It was also submitted that the same bank account of the assessee for the receipt and payments continued to be used. Our attention was also drawn to clause e(ii) of the Press Note issued by the DoT which permitted the assessee to adjust the entry fee paid to the DoT for providing IP-VPN services against the entry fees payable for obtaining NLD/ILD licence. It was submitted that it was just an extension of the existing undertaking and no new undertaking had come into existence as alleged by the Ld. Pr. CIT. 3.4 Our attention was also drawn to page 3 of the Transfer Pricing study of the assessee which contained the assessee's profile. It was submitted that as per the Transfer Pricing Study, the assessee's activities included providing telecom services under ILD/NISP licence and, thus, 8 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT the Ld. Pr. CIT had erred in holding that the assessee was only into providing operating support. It was also submitted that even on the principle of consistency the assessee was allowable for deduction u/s 80IA as there was no change in the factual circumstances.
4. In response, the Ld. CIT (DR) read out extensively from the order passed u/s 263 and also referred to the show cause notice issued by the Ld. Pr. CIT. The Ld. CIT (DR) vehemently argued that the assessee was not an independent service provider but was a subsidiary of the parent company and was getting reimbursement for providing services to the parent company. It was submitted that the Ld. Pr. CIT was legally correct in passing the order u/s 263 as the assessee did not provide the services on a stand-alone basis. The Ld. CIT (DR) also submitted that each year assessment has to be considered separately and the principle of res judicata did not apply in income tax proceedings. It was submitted that the order passed u/s 263 be upheld.
5. We have heard the rival submissions and have perused the material on record. The Ld. AR has drawn our attention to various pages in the paper book which support the assessee's claims that the A.O., during the assessment proceedings u/s 143(3) of the Act, had made extensive enquiries about the assessee's claim of deduction u/s 80IA. 9
ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT Therefore, it will be wrong to infer that there has been no application of mind by the A.O while considering the claim of the assessee although he might not have expressed it in terms of a lengthy discussion on the issue. The Hon'ble Delhi High Court in CIT vs. Sunbeam Auto Ltd 332 ITR 167 (Del) has opined in Para 17 of its order as under:-
"17. We have considered the rival submissions of the counsel on the other side and have gone through the records. The first issue that arises for our consideration is about the exercise of power by the Commissioner of Income-tax under section 263 of the Income- tax Act. As noted above, the submission of learned counsel for the Revenue was that while passing the assessment order, the Assessing Officer did not consider this aspect specifically whether the expenditure in question was revenue or capital expenditure. This argument predicates on the assessment order, which apparently does not give any reasons while allowing the entire expenditure as revenue expenditure. However, that by itself would not be indicative of the fact that the Assessing Officer had not applied his mind on the issue. There are judgments galore laying down the principle that the Assessing Officer in the assessment order is not required to give detailed reason in respect of each and every item of deduction, etc. Therefore, one has to see from the record as to whether there was application of mind before allowing the expenditure in question as revenue expenditure. Learned counsel for the assessee is right in his submission that one has to keep in mind the distinction between "lack of inquiry" and "inadequate inquiry". If there was any inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under section 263 of the Act, merely because he has a different opinion in the matter. It is only in cases of "lack of inquiry" that such a course of action 10 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT would be open. In Gabriel India Ltd. [1993] 203 ITR 108 (Bom), law on this aspect was discussed in the following manner (page 113):
"... From a rending of sub-section (1) of section 263, it is clear that the power of suo motu revision can be exercised by the Commissioner only if, on examination of the records of any proceedings under this Act, he considers that any order passed therein by the Income-tax Officer is 'erroneous in so far as it is prejudicial to the interests of the Revenue'. It is not an arbitrary or unchartered power, it can be exercised only on fulfillment of the requirements laid down in sub-section (1). The consideration of the Commissioner as to whether an order is erroneous in so far as it is prejudicial to the interests of the Revenue, must be based on materials on the record of the proceedings called for by him. If there are no materials on record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity. (See Parashuram Pottery Works Co. Ltd. v. ITO [1977] 106 ITR 1 (SC) at page 1 0 ) . .
From the aforesaid definitions it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as 11 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualize a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualized where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the Commissioner he would have estimated the income at a figure higher than the one determined by the Income- tax Officer. That would not vest the Commissioner with power to reexamine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at a conclusion and such a conclusion cannot be formed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion . . . There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. . . We may now examine the facts of the present case in the light of the powers of the Commissioner set out above. The Income-tax Officer in this case had made enquiries in regard to the nature of the expenditure incurred by the assessee. The assessee had given detailed explanation in that regard by a letter in writing. All these are part of the record of the case. Evidently, the claim was allowed by the Income-tax Officer on being satisfied with the explanation of the assessee. Such 12 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT decision of the Income-tax Officer cannot be held to be 'erroneous' simply because in his order he did not make an elaborate discussion in that regard. "
5.1 Similarly, the Hon'ble Delhi High Court in ITO vs. DG Housing Projects Ltd. 343 ITR 329 (Del) opined as under:
"16. Thus, in cases of wrong opinion or finding on merits, the CIT has to come to the conclusion and himself decide that the order is erroneous, by conducting necessary enquiry, if required and necessary, before the order under Section 263 is passed. In such cases, the order of the Assessing Officer will be erroneous because the order passed is not sustainable in law and the said finding must be recorded. CIT cannot remand the matter to the Assessing Officer to decide whether the findings recorded are erroneous. In cases where there is inadequate enquiry but not lack of enquiry, again the CIT must give and record a finding that the order/inquiry made is erroneous. This can happen if an enquiry and verification is conducted by the CIT and he is able to establish and show the error or mistake made by the Assessing Officer, making the order unsustainable in Law. In some cases possibly though rarely, the CIT can also show and establish that the facts on record or inferences drawn from facts on record per se justified and mandated further enquiry or investigation but the Assessing Officer had erroneously not undertaken the same. However, the said finding must be clear, unambiguous and not debatable. The matter cannot be remitted for a fresh decision to the Assessing Officer to conduct further enquiries without a finding that the order is erroneous. Finding that the order is erroneous is a condition or requirement which must be satisfied for exercise of jurisdiction under Section 263 of the Act. In such matters, to remand the matter/issue to the Assessing Officer would imply and mean the CIT has not examined and decided whether or not the order is erroneous but has directed the Assessing Officer to decide the aspect/question.13
ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT
17. This distinction must be kept in mind by the CIT while exercising jurisdiction under Section 263 of the Act and in the absence of the finding that the order is erroneous and prejudicial to the interest of Revenue, exercise of jurisdiction under the said section is not sustainable. In most cases of alleged "inadequate investigation", it will be difficult to hold that the order of the Assessing Officer, who had conducted enquiries and had acted as an investigator, is erroneous, without CIT conducting verification/inquiry. The order of the Assessing Officer may be or may not be wrong. CIT cannot direct reconsideration on this ground but only when the order is erroneous. An order of remit cannot be passed by the CIT to ask the Assessing Officer to decide whether the order was erroneous. This is not permissible. An order is not erroneous, unless the CIT hold and records reasons why it is erroneous. An order will not become erroneous because on remit, the Assessing Officer may decide that the order is erroneous. Therefore CIT must after recording reasons hold that the order is erroneous. The jurisdictional precondition stipulated is that the CIT must come to the conclusion that the order is erroneous and is unsustainable in law. We may notice that the material which the CIT can rely includes not only the record as it stands at the time when the order in question was passed by the Assessing Officer but also the record as it stands at the time of examination by the CIT [see CIT vs. Shree Manjunathesware Packing Products, 231 ITR 53 (SC)]. Nothing bars/prohibits the CIT from collecting and relying upon new/additional material/evidence to show and state that the order of the Assessing Officer is erroneous.
18. It is in this context that the Supreme Court in Malabar Industrial Co. Ltd. vs. Commissioner of Income Tax, (2000) 243 ITR 83 (SC), had observed that the phrase "prejudicial to the interest of Revenue‟ has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of Revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of Revenue. Thus, when the Assessing Officer had adopted one of the courses permissible and available to him, and this has resulted in loss to Revenue; or two views were 14 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT possible and the Assessing Officer has taken one view with which the CIT may not agree; the said orders cannot be treated as an erroneous order prejudicial to the interest of Revenue unless the view taken by the Assessing Officer is unsustainable in law. In such matters, the CIT must give a finding that the view taken by the Assessing Officer is unsustainable in law and, therefore, the order is erroneous. He must also show that prejudice is caused to the interest of the Revenue. "
5.2 Again, the Hon'ble Delhi High Court in CIT vs. Delhi Vs. New Delhi Television Ltd. 360 ITR (Del) held as under:-
"18. In the present case, jurisdictional pre-conditions stipulated in Section 263 of the Act are not satisfied. The Assessing Officer did conduct investigation and accepted the claim under Section 80HHF on being satisfied that the conditions stipulated in the said Section are satisfied. It is not the case of "no investigation". It is also not a case where per- se further investigation was required. Commissioner in his order, as noticed above, has been tentative and hesitant and did not decide whether the claim under Section 80 HHF has been rightly allowed by the Assessing Officer. He has noted the stand of the respondent, before him and before the Assessing Officer, but refrained from forming any opinion as to whether the acceptance of the claim by the Assessing Officer was erroneous or not. Power of review under Section 263 of the Act can be invoked only if the order is erroneous and for this the Commissioner must record the reason that the order was erroneous and the claim under Section 80FIFIF was wrongly allowed. Once the said claim was considered and examined by the Assessing Officer, Commissioner cannot set aside the order without recording contrary finding. This will be contrary to Section 263 of the Act. In paragraph 6 of the order 15 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT dated 29th March, 2007, the Commissioner uses the expressions 'erroneous and prejudicial to the interest of Revenue' but did not cite any reason or ground for the said conclusion. Use of the words without elucidation indicates, that the said observation are presumptive or a suspicion and mere repetition of words but this does not satisfy the requirements under Section 263 of the Act. Order under Section 263 must be clear and must set out logical ground and reason as to why the assessment is erroneous and prejudicial to the interest of the Revenue. Decision in Gee Vee Enterprises (supra) is not applicable as enquiry was conducted by the Assessing Officer and he formed an affirmative opinion accepting the claim of the respondent.
19. In DLF Power Ltd. (supra), a similar reasoning and ratio was given and reference was made to the decision of a Full Bench of Delhi High Court in CIT vs. Kelvinator of India (2012) 256 ITR 1 (Del.). In the said case, order of remand to the Commissioner of Income Tax for fresh decision was passed after noticing that the Tribunal had considered the question of bifurcation of interest income with reference to the deduction under Section 80IA. It was recorded that this bifurcation and the nature of income was accepted by the Tribunal though the Commissioner of Income Tax had only given a tentative opinion that some elements of income may be eligible. Tribunal had given its own factual finding without there being verification or full and proper rebuttal. In these circumstances, it was observed that where an Assessing Officer does not carry out investigation which was per se required, there would be an error in the sense that the Assessing Officer has failed to carry out the requisite inquiry. This was again a case falling under the exception carved out and mentioned in the case of DG Housing Projects Ltd. (supra).16
ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT
20. In view of the aforesaid discussion, question No. 2 has to be answered against the Revenue and in favour of the respondent assessee and it has to be held that the Assessing Officer during the course of original assessment proceedings, had delved deep into the question of deduction under Section 80HHF and was satisfied that the deduction made were as per law. Question No. 1 is also answered in favour of the respondent assessee and against the Revenue."
5.3 In the instant appeal before us, the AO has conducted an enquiry. The AO has asked the assesseee to substantiate its claim of deduction and the assessee, in compliance, has given a detailed reply. The AO, however, has not launched a lengthy discussion on the issue of deduction but that does not lead to an inference that there has been a lack of enquiry on his part on the issue. It is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an AO, acting in accordance with law, makes a certain assessment, the same cannot be branded as erroneous by the Ld. Principal Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualize a case of substitution of the judgment of the Commissioner for that of the AO. Therefore, it cannot be held that in the instant case the AO's order was erroneous and prejudicial to the interest of the revenue within the terms of section 263 of the Act. Once the said claim was considered and examined by 17 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT the Assessing Officer, The Ld. Pr. Commissioner cannot set aside the order without recording contrary finding. This will be contrary to Section 263 of the Act.
5.4 Further, the year under consideration in the fourth consecutive year in which the assessee had claimed deduction u/s 80IA. It is a matter of record that the assessee's claim was accepted by the AO for Assessment Years 2008-09 and 2009-10 by orders passed u/s 143(3) of the Act. It is also a matter of record that there is no change in the facts this year as compared to the earlier assessment years. The Hon'ble Apex Court in the case of Shasun Chemicals and Drugs Ltd. vs. CIT reported in 388 ITR 1 (SC), while adjudicating an issue relating to section 35D, held that where a benefit is allowed to the assessee for first two assessment years, the same cannot be denied in the subsequent block period as once the claim of the assessee was accepted and the clock had started running in favour of the assessee, it had to complete the entire period of ten years. The same analogy can be applied to provisions of section 80IA also.
5.5 Further, the view of the Ld. Pr. CIT, on the facts of the case, at best can be termed as having a 'different view' from that of the AO. The Ld. Pr. CIT has not brought on record any finding as to why the view of 18 ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT the AO was not legally sustainable. In our considered opinion, section 263 does not envisage the substitution of the view of the AO by the view of the Ld. Pr. CIT especially when there is no legal infirmity in the view taken by the AO. Therefore, without going into the merits of the claim of deduction, in view of the factual matrix of the case and respectfully following the ratio of the various judicial pronouncements as discussed above, we are of the considered opinion that the impugned action of the Ld. CIT u/s 263 of the Act was patently illegal and liable to be quashed. The proceedings u/s 263 of the Act are accordingly quashed.
6. In the final result, the appeal of the assessee is allowed. Stay No. 336/Del/2017
7. Since the appeal has been heard we dismiss the stay application of the assessee as having become infructuous.
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ITA No. 3341//Del/2017 BT Global Communications (India) Private Ltd. vs. Pr.CIT
8. In the final result, the stay application is dismissed.
Order pronounced in the open court on 29.1.2018.
sd/- sd/-
(B.P. JAIN) (SUDHANSHU SRIVASTAVA)
ACCOUNTANT MEMBER JUDICIAL MEMBER
Dated: 29.01. 2018
Veena
Copy forwarded to
1. Applicant
2. Respondent
3. CIT
4. CIT (A)
5. DR:ITAT
ASSISTANT REGISTRAR
ITAT, New Delhi
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