PARAKAR HOSPITAL & RESEARCH INSTITUTE PVT. LTD. vs. PRINCIPAL COMMISSIONER OF INCOME-TAX : 2,,

The assessee has raised the following grounds of appeal:-

The present appeal filed by assessee is against order passed by the Commissioner under section 263 of the Act.

Briefly, in the facts of the case, the assessee had furnished return of income declaring Nil income. The case of assessee was picked up for scrutiny and assessment order under section 143(3) of the Act was passed on 30.03.2015 after accepting plea of the assessee that it is entitled to claim deduction under section 80IB(11C) of the Act since the assessee was running multispecialty hospital at Ratnagiri. The Commissioner noted that the assessee had claimed deduction under section 80IB(11C) of the Act at ₹ 40,44,568/-. He further noted the conditions prescribed in the said sub-section and observed that for assessment year 2010-11 it was seen that construction of hospital was made on leasehold land of the Director of the company and even permission was granted for construction before incorporation of assessee company. Further, even the completion certificate was issued by Ratnagiri Municipal Corporation on 10.07.2009 in the name of Director. The Commissioner in assessment year 2010-11 further noted that the Assessing Officer had failed to call for such details and no proper examination was done to ascertain the genuineness and fulfillment of eligibility conditions before allowing deduction under section 80IB(11C) of the Act. The assessment order thus, was found to be erroneous and prejudicial to the interest of Revenue and notice under section 263 of the Act was issued to the assessee. The Commissioner took note of the fact that assessment order passed for assessment year 2010-11 was set aside by his predecessor vide order under section 263 of the Act on 30.03.2015. In view of above said facts and circumstances and after taking note of various judicial precedents, the Commissioner held the assessment order passed under section 143(3) of the Act for assessment year 2012-13 to

The assessee is in appeal against the order of Commissioner.

The learned Authorized Representative for the assessee referred to the show cause notice issued under section 263 of the Act and pointed out that proceedings were initiated by the Commissioner following the order under section 263 of the Act in assessment year 2010-11. He then, referred to the order of Tribunal, which is placed at pages 105 to 111 of Paper Book, wherein the Tribunal in ITA No.795/PUN/2015, relating to assessment year 2010-11, order dated 31.10.2017 had held the order passed by the Commissioner under section 263 of the Act as invalid and bad in law.

The learned Departmental Representative for the Revenue on the other hand, placed reliance on the order of Commissioner passed under section 263 of the Act.

We have heard the rival contentions and perused the record. The issue arising in the present appeal is against exercise of jurisdiction by the Commissioner under section 263 of the Act. The proceedings were initiated by issue of show cause notice and the basic reason for the said show cause notice was similar proceedings under section 263 of the Act being carried out by the predecessor of Commissioner in assessment year 2010-11. The assessee was multispecialty hospital and had claimed deduction under section 80IB(11C) of

We find that the Tribunal in assessee’s own case in assessment year 2010-11 had taken note of the provisions of section 80IB(11C) of the Act and claim made by assessee as to whether it had fulfilled the conditions and it was held that the Assessing Officer during assessment proceedings had verified the claim of assessee and had found that all the conditions were satisfied by the assessee, hence the order allowing deduction claimed by assessee under the said sub-section does not make the order prejudicial to the interest of Revenue. The Tribunal further held that exercise of revisionary powers by the Commissioner under section 263 of the Act was not warranted in the facts of case. The relevant findings of Tribunal are in paras 10 to 12 of the order dated 31.10.2017, which are being referred to but are not being reproduced for the sake of brevity.

The issue arising in the present appeal before us is also against exercise of revisionary powers by the Commissioner under section 263 of the Act on the same grounds as raised in assessment year 2010-11. Since the issue has been decided in favour of assessee and the order of Commissioner passed under section 263 of the Act in assessment year 2010-11 has been held to be both invalid and bad in law, following the same parity of reasoning, we hold that

In the result, the appeal of assessee is allowed.