M/S. The Malabar Industrial Co. Ltd vs Commissioner Of Income-Tax, Kerala ... on 10 February, 2000
The AO examined complete details from books of accounts and was
satisfied with explanation of the assessee and accepted the computation
of income filed by the assessee therefore it is not a case of lack of
enquiry or making improper enquiry into the matter. He has submitted
that since provision of section 10 A or 10 B are similar and there is no
revenue effect therefore it may not be a case of erroneous or
prejudicial to the interest of revenue. The condition of both the
sections are similar and 10A have been satisfied by the assessee. He
has relied upon decision of the Hon'ble Supreme Court in the case of
10
Malabar Industrial Co. Ltd. Vs. Commissioner of Income Tax
[2000]243 ITR 83 in which it was held that before Commissioner to
exercise the jurisdiction under section 263 of the Income Tax Act the
twin condition namely, the order of the AO sought to be revised is
erroneous and it is prejudicial to the interest of revenue have to be
satisfied. It was further held in this case " that every loss of revenue
as a consequence of an order of the Assessing Officer, cannot be
treated as prejudicial to the interests of the Revenue, for example,
when an Income-tax Officer adopted one of the courses permissible in
law and it has resulted in loss of revenue, or where two views are
possible and the Income-tax Officer has taken one view with which the
Commissioner does not agree, it cannot be treated as on erroneous
order prejudicial to the interests of the Revenue unless the view taken
by the Income-tax Officer is unsustainable in law ". He has also
submitted that even if the order passed by the AO is cryptic and no
elaborate discussion is made but when he has applied mind to the facts
and evidence before him, the jurisdiction exercised by the CIT under
section 263 is not valid and assessment order cannot be said to be
"erroneous". In next year claim of assessee u/s 10A is accepted u/s
143(1).