CAVINKARE PRIVATE LIMITED,CHENNAI vs. DCIT, CHENNAI

ITA 1603/CHNY/2016Status: DisposedITAT Chennai23 December 2022AY 2011-1227 pages
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What did the Tribunal hold?

The Tribunal held that the Principal CIT's assumption of jurisdiction under Section 263 was bad in law. The Tribunal found that the assessee was engaged in manufacturing personal care products, not cosmetics, as per the DSIR approval. Furthermore, the decision of the prescribed authority (DSIR) regarding the nature of the activity is final and cannot be questioned by the Assessing Officer or the Principal CIT.

What were the facts?

The assessee claimed deduction under Section 35(2AB) for scientific research expenditure. The Principal CIT initiated revision proceedings under Section 263, holding the assessment order allowing the deduction as erroneous and prejudicial to revenue because the assessee was allegedly engaged in manufacturing cosmetics, which are listed in the Eleventh Schedule.

What were the issues?

Whether the Principal CIT was justified in revising the assessment order under Section 263 when the assessee's eligibility for deduction under Section 35(2AB) was approved by the prescribed authority (DSIR).

Which sections of the Income-tax Act were involved?

Section 35(2AB),Section 263

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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI

Before: SHRI MAHAVIR SINGH, VICE- & SHRI MANOJ KUMAR AGGARWAL

Hearing: 23.12.2022

PER MAHAVIR SINGH, VP:

This appeal by the assessee is arising out of revision

order passed by the Principal CIT, Central-2, Chennai, u/s.263

of the Income Tax Act, 1961 (hereinafter ‘the Act’) vide order

C.No.2744/C-2/2015-16/1 dated 31.03.2016. The assessment

was framed by the Deputy Commissioner of Income Tax,

Company Circle-I(3), Chennai, for the relevant assessment

year 2011-12 u/s.143(3) of the Act vide order dated

20.

03

The order continues below.

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