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Income Tax Appellate Tribunal, ‘B’ BENCH, BENGALURU
O R D E R
Per INTURI RAMA RAO, AM :
This is an appeal filed by the assessee company directed against the order of the ld. Commissioner of Income-tax, LTU, [CIT] Bangalore, dated 11/03/2014 passed under section 263 of Income Tax Act,1961 [hereinafter referred to as ‘the Act’].
The assessee raised the following grounds of appeal:
3. Briefly, facts of the case are as under: The assessee is a company duly incorporated under the provisions of the Companies Act 1956. It is engaged in the business of design and development of computer software. The return of income for the assessment year 2008-09 was filed on 30/09/2008 declaring income of Rs.98,03,41,570/-. Against the said return of income, the assessment was completed by the Additional Commissioner of Income- tax, LTU, Bangalore, vide order dated 25/01/2012 passed under section 143(3) read with section 144C at total income of Rs.289,91,51,955/- after making several disallowances. The additions are being contested by the assessee-company before appellate authorities.
While the matter stood thus, the ld.CIT issued notice dated 13/11/2013 under section 263 proposing to revise the assessment on the following grounds:
In response to the show cause notice, the assessee filed reply vide letter dated 23/12/2013 which is extracted by the ld.CIT vide impugned order in pages 5, 6, 7, 8 and 9. After considering the submissions filed by the assessee company, the ld.CIT held that the transitional liability arose due to change in accounting method in respect of provision for gratuity fund and provision for leave encashment, are not allowable as deduction. In the operating portion of the order passed under section 263, the ld.CIT concluded that no proper enquiry has been made by the AO while passing the assessment order.
Being aggrieved by the above order, the assessee is in the present appeal before us. The learned authorised representative of the assessee- company vehemently contended that the observation made by the ld.CIT on the issues sought to be revised run counter to the conclusion reached by the ld.CIT while passing the impugned order. Thus, he prayed that modification of the direction of the ld.CIT is required. He expressed no objection if the order under section 263 is modified with the direction that the assessment order is set aside on the issues sought to be revised and to pass the consequential order after affording the opportunity to the assessee company in accordance with law.
The ld.CIT(DR) expressed no objection to the proposition canvassed by the learned authorized representative of the assessee.
After hearing the rival submissions and perusing the material on record, we are of the considered opinion that the issue in the appeal can be disposed of by modifying the direction of the ld.CIT and order as follows:
“The assessment order on the issues sought to the revised is set aside to the file of the Assessing Officer with a direction to pass consequential order in accordance with law after affording an opportunity of being heard to the assessee company.”
In the result the appeal filed by the assessee is partly allowed for statistical purposes.