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Income Tax Appellate Tribunal, ‘A’ BENCH, CHENNAI
Before: SHRI CHANDRA POOJARI & SHRI G. PAVAN KUMAR
आदेश / O R D E R PER G. PAVAN KUMAR, JUDICIAL MEMBER:
The appeal filed by the Department is directed against order of the Commissioner of Income-tax (Appeals)-3, Chennai in ITA No.86/14-15/A-3, dt 31.12.2015 for the assessment year 2009-2010 passed u/s.143(3) r.w.s. 263 and 250 of the Income Tax Act, 1961 (herein after referred to as ‘the Act’).
ITA No.611/Mds/2016. :- 2 -:
The Revenue has raised the following grounds:- 2.
“2. The ld. CIT(A) has erred in not considering the fact that the department has filed an appeal before the High Court against the order of the Hon’ble ITAT setting aside the order passed by the Commissioner of Income Tax u/s.263 of the Income Tax Act.
The ld. CIT(A) has erred in not deciding the appeal of the assessee on merit but allowing the relief on the basis of I.T.A.T. decision which has been contested in High Court of Madras.’’
The Brief facts of the case is that the assessee is engaged in 3. the business of Refilling Hydro Fluorocarbons Gases and filed return of income with total income of �95,55,830/-. The assessment was completed u/s.143(3) of the Act on 28.12.2011. Subsequently, the ld. Commissioner of Income Tax-V, Chennai vide order u/s.263 of the Act, dated 18.03.2014 has set aside the assessment order u/s.143(3) of the Act passed on 28.12.2011 as erroneous and prejudicial to the interest of the revenue and modified the assessment order to the extent of disallowance of brand building expenses of �1,99,13,832/- as capital in nature and enhancement of income on account of excess claim u/s.35D of the Act �18,53,614/-. As per the directions of ld. Commissioner of Income Tax, the ld. Assessing Officer issued notice u/s.143(2) r.w.s. 263 of the Act dated 25.03.2014 and in compliance, the assessee filed request letter to adjourn proceeding till the disposal
ITA No.611/Mds/2016. :- 3 -: of appeal filed by the assessee against the order u/s.263 of the Act dated 18.03.2014 with Tribunal. The ld. Assessing Officer considered the Tribunal proceedings as separate and directed assessee to submit the details and the ld. Assessing Officer relied on the directions of the ld. Commissioner of Income Tax and the material on record and disallowed the claim and assessed total income at �3,24,29,797/- and passed order u/sec. 143(3) r.w.s 263 dated 27.06.2014 and raised demand. Aggrieved by the order, the assessee filed an appeal before the Commissioner of Income Tax (Appeals).
In the appellate proceedings, the ld. Authorised Representative filed written submission that the order of the ld.CIT passed u/s.263 dated 18.03.2014 was cancelled by ITAT vide order in dated 09.9.2014 and the ld. Assessing Officer has no jurisdiction of passing an order as order u/s. 263 of the Act was is cancelled. The ld. Commissioner of Income Tax (Appeals) based on the order of ITAT found that there is no error in the findings of the Assessing Officer in accepting the claim of the assessee in treating the advertisement expenses as Revenue in nature, since the ITAT has set aside the order of CIT, the order u/s.143(3) r.w.s. 263 dated 27.06.2014 does not survive and allowed the appeal of the assessee for statistical purpose. Aggrieved by the order of ITA No.611/Mds/2016. :- 4 -:
Commissioner of Income Tax (Appeals), the Revenue has assailed an appeal before Tribunal.
Before us, the ld. Departmental Representative argued that the department has not accepted the decision of ITAT on setting aside the order of the CIT u/s.263 of the Act and the ld. Commissioner of Income Tax (Appeals) erred on relying on the ITAT order without deciding the appeal on merits and prayed for allowing the appeal.
Contra, the ld. Authorised Representative relied on the order of Commissioner of Income Tax (Appeals) and opposed the grounds of the Revenue.
We heard rival submissions, perused the material on record and evidence. The only contention of the Department before the Tribunal that the Revenue has not accepted the order of Tribunal and an appeal has been filed in Madras High Court. This Tribunal is of the considered opinion that mere filing of appeal in High Court cannot be a reason to take a different view. The order of Tribunal is binding on all the authorities in the State of Tamil Nadu and Union Territory of Pondicherry. Therefore, the Commissioner of Income Tax (Appeals) has rightly allowed the claim of the assessee by following the Co- ordinate Bench decision in assessee’s own case in ITA
ITA No.611/Mds/2016. :- 5 -:
No.972/Mds/2014, assessment year 2009-2010 observed at para 10 and 11 as under:-
‘’10. The Chandigarh Bench of the Tribunal in the case of Sh.Jaswinder Singh Vs. CIT (supra) has held that exercise of revisional power on the basis of audit objection is not tenable in law. The co-ordinate Bench of the Tribunal while coming to such a conclusion has taken into consideration the decision of the Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Sohana Woollen Mills reported as 296 ITR 238 and the decision of the Hon'ble Calcutta High Court in the case of JeewanLal (1929) Ltd.,Vs. ACIT reported as 108 ITR 407 (Calcutta).
The Hon'ble Punjab & Haryana High Court in the case of CIT Vs. Sohana Woollen Mills (supra) has held that mere audit objection and merely because a different view can be taken are not enough to say that order of the Assessing Officer is erroneous or prejudicial to the interest of revenue.
In the facts and circumstances of the case, we are of the considered opinion that the Commissioner of Income Tax without examining the records and proper application of mind has invoked the provisions of section 263 in disallowing the advertisement expenditure claimed by the assessee. There is nothing on record to suggest that the order of Assessing Officer is not sustainable in law. We do not find any error in the findings of Assessing Officer in accepting the claim of the assessee with regard to treating advertisement expenses as revenue in nature. In view of the above, the impugned order is set aside and the appeal of the assessee is allowed’’.
The ld. Counsel for the assessee submitted copy of the order of ITAT in for assessment year 2009-2010 dated 09.09.2014 and we find the order of the ITAT has been decided on ITA No.611/Mds/2016. :- 6 -: merits and we respectfully following the order of Co-ordinate Bench dismiss the appeal of the Revenue.
In the result, the appeal of the Revenue is dismissed. 8.
Order pronounced on Tuesday, the 24th day of May, 2016, at Chennai.