“(i) In cases where the
Assessing Officer adopts one of the courses permissible, in law, or where two
views are possible and the Assessing Officer has taken one of the possible
views, the Commissioner cannot exercise his powers u/s.263 to differ with the
view of the Assessing Officer, even if there has been a loss of revenue.
(ii) It is also clear that
while passing an order u/s.263, the Commissioner has to examine not only the
assessment order, but also the entire record. Since the assessee has no
control over the way an assessment order is drafted and since generally the
issues which are accepted by the Assessing Officer, do not find mention in the
assessment order and only those points are taken note of on which the
assessee’s explanations are rejected and additions/disallowances are made, in
the instant case, the mere absence of the discussion of the provisions of S.
80-IB(13), r/w. S. 80-IA(9), would not mean that the Assessing Officer had not
applied his mind to the said provisions.
(iii) When a regular
assessment is made u/s. 143(3), a presumption can be raised that the order has
been passed upon an application of mind. No doubt, this presumption is
rebuttable, but there must be some material to indicate that the Assessing
Officer had not applied his mind.
(iv) In the instant case,
there was no material
to indicate that the Assessing Officer had not applied his mind to the
provisions of
S. 80-IB(13), r/w. S. 80-IA(9). The presumption, that the assessment order
passed u/s.143(3) by the Assessing Officer had been passed upon an application
of mind, had not been rebutted by the Revenue. No additional facts were
necessary before the Assessing Officer for the purpose of construing the
provisions of S. 80-IB(13), r/w S. 80-IA(9). It was only a legal consideration
as to whether the deduction u/s.80HHC was to be computed after reducing the
amount of deduction u/s.80-IB from the profits and gains.
(v) There was no doubt
that the Assessing Officer had allowed the deduction u/s.80HHC without
reducing the amount of deduction allowed u/s.80-IB from the profits and gains.
He did not say so in so many words, but that was the end result of his
assessment order. It could not be said that the Assessing Officer had failed
to make any enquiry because no further enquiry was necessary and all the facts
were before the Assessing Officer.
(vi) The validity of an
order u/s.263 has to be tested with regard to the position of law as it exists
on the date on which such an order is made by the Commissioner. From the
narration of the facts in the Tribunal’s order, it was clear that on the date
when the Commissioner had passed his order u/s.263, the view taken by the
Assessing Officer was in consonance with the view taken by the several Benches
of the Tribunal. Therefore, the conclusion of the Tribunal, that the
Commissioner could not have invoked his jurisdiction u/s.263, was correct. As
a result, the Tribunal was correct, in law, in cancelling the order passed by
the Commissioner u/s.263.”
