S. 263 — In revision proceedings CIT cannot travel beyond reasons for revision given by him in show-cause notice.

Geometric Software Solution Co. Ltd. v. ACIT

A.Y. : 2003-04. Dated : 10-7-2009

S. 263 — In revision proceedings CIT cannot travel beyond
reasons for revision given by him in show-cause notice.

For the relevant assessment year, the assessee’s claim for
deduction u/s.10A was allowed in the assessment u/s.143(3). The CIT noticed
that the assessee had incurred certain expenses in foreign currency in the
relevant assessment year, which were mainly in the nature of travel expenses
and sales and marketing expenses which were to be excluded while working out
the deduction u/s.10A and not doing so had resulted in excess allowance of
deduction. The CIT, accordingly, issued show-cause notice to the assessee as
to why the assessment order passed by the Assessing Officer should not be set
aside. Thereafter, the CIT, having considered the assessee’s reply, set aside
the assessment order stating another ground also that some of the sale
proceeds were yet to be received by the assessee in India at the relevant
time.

The Tribunal held as under :

(1) The CIT had revised the assessment order passed
u/s.143(3) by issuing show-cause notice only with regard to not reducing the
expenditure incurred in foreign currency from the total export turnover
while computing the deduction u/s.10A, but in the revision order the
assessment was set aside on another ground also that some of the sale
proceeds were yet to be received by the assessee.

(2) The revision u/s.263 is not like the reopening of the
assessment where once the assessment is reopened entire assessment is open
before the Assessing Officer to be reconsidered in accordance with law.

(3) In the revision proceedings the CIT cannot travel
beyond the reasons given by him for revision in the show-cause notice.
Therefore, the revision on the ground that part of the sale proceeds were
yet to be received by the assessee was not tenable.