“Malabar Industrial”

Judicial DoctrinesMalabar - 263Malabar - 2631,099 judgments

The decision most relied on for Malabar Industrial is Malabar Industrial Co. Ltd. v. CIT (243 ITR 83), cited in 2,943 judgments on BharatTax.

Leading authorities on Malabar Industrial

Malabar Industrial Co. Ltd. v. CIT

243 ITR 83 · 2000 · Supreme Court

2,943

citing judgments

For revision under Section 263, the Assessing Officer's order must be both erroneous and prejudicial to the interests of the revenue; if either condition is not met, the revisionary jurisdiction cannot be invoked. An order is not erroneous merely because the Assessing Officer did not record the details of enquiries conducted, provided due enquiries were made.

CIT v. Max India Ltd.

295 ITR 282 · 2007 · Supreme Court

1,162

citing judgments

Under Section 263, an assessment order is not erroneous and prejudicial to the interest of the revenue merely because the Principal Commissioner disagrees with the Assessing Officer's (AO) view, particularly if the AO has adopted one of two permissible views in law, unless that view is completely unsustainable. If due inquiries were made, the AO's order does not become erroneous solely because the fact of inquiries was not recorded.

Rampyari Devi Saraogi v. CIT

67 ITR 84 · 1968 · Supreme Court

616

citing judgments

An assessment order is erroneous and prejudicial to the Revenue's interests if the Assessing Officer accepts a sum offered as income by an assessee, even when that sum was not actually earned, thereby allowing revision under Section 263.

CIT v. Amitabh Bachchan

384 ITR 200 · 2016 · Supreme Court

264

citing judgments

The Commissioner's revisional power under Section 263 of the Income Tax Act is not limited to the points specified in the show-cause notice, nor is the exercise of this power contingent upon issuing a show-cause notice.

Mantola Co-operative Thrift & Credit Society Ltd. v. CIT

50 Taxmann.com 278 · 2014 · High Court

242

citing judgments

A cooperative society is not entitled to deduction under Section 80P(2)(a)(i) for interest income earned from investments and deposits which are not attributable to its primary business. An assessment order erroneously allowing such a deduction is revisable under Section 263 as being erroneous and prejudicial to the revenue, or subject to reassessment under Section 147.

Narayan Tatu Rane v. ITO

70 Taxmann.com 227 · 2016 · ITAT

220

citing judgments

Before revising an assessment order under Section 263, the CIT/PCIT must conduct their own inquiries or verifications to establish that the Assessing Officer's order is erroneous and unsustainable in law, rather than merely directing further inquiry or pointing out the AO's lack of inquiry.

DIT v. Jyoti Foundation

357 ITR 388 · 2013 · High Court

210

citing judgments

An assessment order cannot be deemed erroneous and prejudicial to the interest of revenue under Section 263 if the Assessing Officer conducted an inquiry and applied their mind during the original assessment, as Explanation 2 to Section 263 does not permit unending inquiries by the revisional authority.

Grasim Industries Ltd. v. CIT

321 ITR 92 · 2010 · High Court

194

citing judgments

This case clarifies the scope of the Commissioner's revisional powers under Section 263 of the Income-tax Act, holding that an assessment order can only be revised if it is both erroneous and prejudicial to the interests of the revenue, echoing the principles laid down in Malabar Industrial.

Judgments citing Malabar Industrial

Haris Kalandan Mohammed, Mangaluru vs. Principal Commissioner of Income Tax (Central), Bengaluru

In the result, the appeal filed by assessee stands allowed on merits

ITA 435/BANG/2022[2018-19]Status: DisposedITAT Bangalore21 Sept 2022AY 2018-19

Bench: Shri. Chandra Poojari & Smt. Beena Pillaiassessment Year : 2018-19 Shri Haris Kalandan Mohammed, The Principal D.No. 23-10-810, Commissioner Of Umay Bagh, Income Tax 1St Cross, [Central], Yemmekere, Vs. Bengaluru. Mangaluru – 575 001. Pan: Abjph9234P Appellant Respondent Assessee By : Shri V. Srinivasan, Advocate : Shri Praveen Karanth, Cit- Revenue By Dr Date Of Hearing : 14-09-2022 Date Of Pronouncement : 21-09-2022 Order Per Beena Pillaipresent Appeal Is Filed By Assessee Against Order Dated 22/03/2022 Passed By Ld.Pr.Cit U/S. 263 For A.Y. 2018-19 On Following Grounds Of Appeal: “1. The Order Of Revision Passed By The Learned Principal Commissioner Of Income Tax [Central], Bengaluru, Under Section 263 Of The Act Dated 22/03/2022, In So Far As It Is Against The Appellant Is Opposed To Law, Weight Of Evidence, Probabilities, Facts & Circumstances Of The Appellant'S Case. 2. The Learned Principal Commissioner Of Income Tax Is Not Justified In Law & On Facts To Set Aside The Assessment

For Appellant: Shri V. Srinivasan, Advocate

Section 115BSection 132Section 132(4)Section 143Section 143(3)Section 153DSection 263Section 68

that the impugned order is liable to be quashed accordingly. 6. In the result, appeals are allowed." 7. Sri R.K. Upadhyay had relied upon Malabar Industrial Co. Ltd. Vs. Commissioner of Income Tax, (2000) 243 ITR 83 and Commissioner of Income Tax Vs. Kwality Twxtile Associate ... revisionary proceedings are based on mere change of opinion. He placed reliance on the decision of Hon’ble Supreme Court in case of Malabar Industrial Co. Ltd. vs. CIT reported in 243 ITR 83. On the contrary, the Ld.DR relied on orders passed by authorities below. We have perused

Navunda Abdulla Badruddin, Udupi vs. Principal Commissioner of Income Tax, Central, Bangalore

In the result, the appeal filed by the assessee is dismissed

ITA 508/BANG/2022[2018-19]Status: DisposedITAT Bangalore20 Sept 2022AY 2018-19

Bench: Shri N.V. Vasudevan & Ms. Padmavathy S.Shri Navunda Abdulla Badruddin Vs Pcit, Central O Thuwfeeq Manzil C.R. Building, Queen'S Road Maski Navunda, Kundapur Bengaluru 560001 Udupi 576224 Pan – Aevpa6893G (Appellant) (Respondent) Assessee By: Shri V. Narendra Sharma, Advocate Revenue By: Shri Manjunath Karkihalli, Cit-Dr Date Of Hearing: 14/09/2022 Date Of Pronouncement: 20/09/2022 O R D E R Per: Padmavathy, A.M. This Is An Appeal Filed By The Assessee Against The Order Of The Principal Commissioner Of Income Tax(Pcit) U/S.263 Of The Income Tax Act 1961 (The Act), Bangalore In Appeal No. 263/Pr.Cit(C)/2001-02 Dated 28.03.2022 For Ay 2018-19. 2. The Assessee Has Raised The Following Grounds Of Appeal: - “1. The Order Of Revision Passed By The Learned Principal Commissioner Of Income Tax [Central], Bengaluru, Under Section 263 Of The Act Dated 28/03/2022, In So Far As It Is Against The Appellant Is Opposed To Law, Weight Of Evidence, Probabilities, Facts & Circumstances Of The Appellant'S Case. 2. The Learned Principal Commissioner Of Income Tax Is Not Justified In Law & On Facts To Set Aside The Assessment Order Passed Under Section 143[3] R.W.S. 153D Of The Act Dated 19/12/2019 & Direct

For Appellant: Shri V. Narendra Sharma, AdvocateFor Respondent: Shri Manjunath Karkihalli, CIT-DR

Section 115BSection 143Section 153DSection 263Section 69C

ease of Electro House (supra) and to more so on the basis of the observations and law as declared in the case of Malabar Industrial Co. Ltd. (supra) we are fully satisfied that a situation where a deduction of the present nature is allowed or in the sense deducted from ... which is not logical or rational and not acceptable and at any rate on the authority of the Supreme Court in the case of Malabar Industries Co. (supra) is not an acceptable submission. 23. Though learned counsel for the assessee have placed strong reliance on two judgments of the Bombay

Dishant Jain, Gadag vs. Principal Commissioner of Income Tax, Hubli

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 384/BANG/2022[2017-18]Status: DisposedITAT Bangalore13 Sept 2022AY 2017-18

Bench: Smt. Beena Pillai & Shri Laxmi Prasad Sahuassessment Year : 2017-18

For Appellant: Shri S.V Ravishankar, Advocate by RevenueFor Respondent: Shri Binod Kumar Singh, CIT (DR) by

Section 115JSection 143(3)Section 263

Supreme Court in Rampyari Devi Saraogi v. CIT[1968] 67 !TR 84. Smt. Tara Devi Aggarwal v. CIT[1973] 88 ITR 323 (SC), and Malabar Industrial Co. Ltd. 's case (supra). 5 Considering the facts discussed above, it is clear that the Assessing Officer has not conducted necessary enquiries ... erroneous and prejudicial to the interests of Revenue in terms of section 263. 6. This view is supported by the following juridical decisions: 1 Malabar Industrial Co., Ltd [2000] 243 ITR 83 (SC) 2. Daniel Merchants P. Ltd. 2017- TIOL-455-SC-IT 3. Rajmandir Estates

R V Deshpande HUF, Bangalore vs. Principal Commissioner of Income Tax, Bangalore-1, Bangalore

In the result, the appeal by the assessee is partly allowed

ITA 340/BANG/2022[2017-18]Status: DisposedITAT Bangalore09 Sept 2022AY 2017-18

Bench: Shri N.V. Vasudevan, Vice Preseident & Shri Padmavathy Sassessment Year : 2017-18

For Appellant: Shri S V Ravishankar, AdvocateFor Respondent: Shri V S Chakrapani, CIT(DR)(ITAT), Bengaluru

Section 143Section 143(3)Section 263

requirement is absent, recourse cannot be had to section 263 of the Income Tax Act, 1961. Reliance placed in the case of Malabar Industrial Co. Ltd., (2000) 243 ITR 83 (SC). 8. The Principal Commissioner of Income Tax failed to appreciate the fact that when the Assessing Officer made proper

Vijay Grihnirman P.Ltd, Mumbai vs. ACIT CC 15 & 16, Mumbai

In the result, both the appeals filed by the assessee are allowed

ITA 3279/MUM/2016[2007-08]Status: DisposedITAT Mumbai05 Sept 2022AY 2007-08

Bench: Us.

Section 271Section 271(1)(c)Section 274

impugned order, therefore, suffers from non- application of mind. It was also bound to comply with the principles of natural justice. (See Malabar Industrial Co. Ltd. v. CIT [2000] 2 SCC 718]" 9. Factually speaking, the aforesaid plea of assessee is borne out of record and having regard

M/S. Eta Star Infopark, Bengaluru vs. The Principal Commissioner of Income Tax, Bengaluru-1, Bengaluru

ITA 248/BANG/2021[2016-17]Status: DisposedITAT Bangalore02 Sept 2022AY 2016-17

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Annamalai, A.RFor Respondent: Dr. Manjunath Karkihalli, D.R

Section 143(3)Section 2Section 263

issue decided by the AO. 2.29 The Ld. A.R. placed reliance on the judgement of Hon’ble Supreme Court in case of Malabar Industrial Company Ltd. vs CIT - 243 ITR 83 (SC) has laid down the following legal positions on exercising powers under section ... Supreme Court in the case of CIT vs Max India Ltd (2007) 295 ITR 282 (SC), wherein referring its decision in case of The Malabar Industrial Co. Ltd. vs CIT (supra) and also by the judgement of the Calcutta High Court in the case of Russell Properties

M/S. Eta Star Infopark, Bengaluru vs. Principal Commissioner of Income Tax-1, Bengaluru

ITA 415/BANG/2020[2015-16]Status: DisposedITAT Bangalore02 Sept 2022AY 2015-16

Bench: Shri Chandra Poojari & Smt. Beena Pillai

For Appellant: Shri Annamalai, A.RFor Respondent: Dr. Manjunath Karkihalli, D.R

Section 143(3)Section 2Section 263

Mfe Formwork Technology Sdn Bhd, Mumbai vs. The CIT (Intl Tax), Mumbai

In the result, the appeal is allowed

ITA 890/MUM/2022[2017-18]Status: DisposedITAT Mumbai30 Aug 2022AY 2017-18

Section 143(3)Section 263

prejudicial to the interest of the revenue, the provisions of Section 263(1) cannot be put into service. In the case of Malabar Industrial Co Ltd Vs CIT [(2000) 243 ITR 83 (SC)], the Hon’ble Supreme Court has elaborated upon this point and observed that “A bare reading

Proctor & Gamble Home Products Pvt. Ltd, Mumbai vs. Pr. Comm of Income Tax Mumbai -2, Mumbai

In the result, the appeal filed by the assessee is partly allowed for statistical purposes

ITA 1221/MUM/2022[2015-16]Status: DisposedITAT Mumbai30 Aug 2022AY 2015-16

Bench: Shri Baskaran Br & Shri Pavan Kumar Gadaleprocter & Gamble Home Vs. Pr. Cit – 2 Products Pvt Ltd., Room No. 344, 3Rd 495 P&G Plaza, Cardinal Floor, Aayakar Gracias Road, Chakala, Bhawan, M.K.Road, Andheri (E), Mumbai -400020. Mumbai- 400099. Pan/Gir No. : Aaacp4072C Appellant .. Respondent Appellant By : Mr. Yogesh Thar & Mr. Jishaan Jain.Ar Respondent By : Mr. Ganesh Bare.Dr Date Of Hearing 23.08.2022 Date Of Pronouncement 29.08.2022 आदेश / O R D E R Per Pavan Kumar Gadale Jm: The Assessee Has Filed The Appeal Against The Revision Order Of The Pr.Commissioner Of Income Tax(Pr.Cit) -2, Mumbai Passed U/S 263 Of The Act. The Assessee Has Raised The Following Grounds Of Appeal:

For Appellant: Mr. Yogesh Thar &For Respondent: Mr. Ganesh Bare.DR

Section 143(1)Section 143(2)Section 143(3)Section 263Section 37Section 92C

Thus twin Conditions are to be satisfied for the exercise of power u/s 263 of the Act/Basic Principles. i. As in the case of Malabar Industrial Co. Ltd. vs. CIT[2000] 243 ITR 83(SC), the Supreme Court held that there must be two conditions namely that the order

Mallikarjun Virupaxappa Yarasi, Gadag vs. Principal Commissioner of Income Tax, Hubli

In the result, the appeal of the assessee is dismissed

ITA 437/BANG/2022[2017-18]Status: DisposedITAT Bangalore30 Aug 2022AY 2017-18

Bench: Shri N.V. Vasudevan & Shri Chandra Poojariassessment Year: 2017-18

For Appellant: Shri S.V. Ravishankar, A.RFor Respondent: Sri Manjunath Karkihalli, D.R

Section 142(1)Section 143(2)Section 143(3)Section 263

appellant places reliance on the below mentioned cases which enunciate the limitations of section 263 of the Act: A. MALABAR INDUSTRIAL CO., LTD. Vs CIT [2000] 243 ITR 83 [SC] B. CIT Vs SUNBEAM AUTO LTD. [2011] 332 ITR 167 [DEL] m) Ld. A.R. submitted further that there ... erroneous order prejudicial to the revenue. Reliance is placed on the decision of the Hon'ble Apex Court in the case of .-(i) Malabar Industrial Co. Ltd., reported in 243 ITR 83 and also in the case of CIT Vs. Max India Ltd., reported in 295 ITR 282. The assessee

Gopa Investment Co. P. Ltd., Mumbai vs. Pr. CIT -2, Mumbai

In the result, the appeal is allowed

ITA 772/MUM/2021[2016-17]Status: DisposedITAT Mumbai26 Aug 2022AY 2016-17

Section 115JSection 143(3)Section 263Section 263(1)

order is prejudicial to the interests of the revenue. 5. As observed by Hon’ble Supreme Court, in the case of Malabar Industrial Co Ltd Vs CIT [(2000) 243 ITR 83 (SC)], “A bare reading of this provision makes it clear that the pre-requisite to exercise of jurisdiction

M/S. Champion Dreams, Mumbai vs. Pr. Comm of Income Tax, Mumbai

In the result, the appeal filed by the assessee is partly allowed

ITA 421/MUM/2022[2011-12]Status: DisposedITAT Mumbai25 Aug 2022AY 2011-12

Section 139(1)Section 142(1)Section 147Section 148Section 263

interests of revenue. In this regard, we derive support from the decision rendered by Hon’ble Supreme Court in the case of Malabar Industrial Co (243 ITR 83)(SC). 10. We have noticed that the Ld PCIT was not fully correct in holding that the entire expenses claimed as Compensation

Anup Enterprises, Mumbai vs. The Principal CIT-19, Mumbai

In the result, ground no. 2 & 3 raised by the assessee are also dismissed

ITA 1641/MUM/2021[2011-12]Status: DisposedITAT Mumbai23 Aug 2022AY 2011-12

Bench: Shri Kuldip Singh & Shri Gagan Goyalanup Enterprises, 41, 4Th Floor, Neelkamal, Pedder Road, Mumbai-400026 Pan: Aaafa5067D ...... Appellant Vs. The Pr.Cit-19, Room No. 228, 2Nd Floor, Matru Mandir, Tardeo, Mumbai-400007 ..... Respondent Appellant By : None Respondent By : Smt. Shailja Rai, Cit-Dr Date Of Hearing : 26/05/2022 Date Of Pronouncement : 23/08/2022 Order Per Gagan Goyal, A.M: This Appeal By The Assessee Is Directed Against The Order Of Ld. Principal Commissioner Of Income Tax-19, Mumbai [Hereinafter Referred To As (‘Ld. Pr.Cit) Dated 22.03.2021 For The Assessment Year (Ay) 2011-12. The Assessee Has Raised The Following Grounds Of Appeal:

For Appellant: NoneFor Respondent: Smt. Shailja Rai, CIT-DR

Section 142(1)Section 144Section 147Section 148Section 253Section 263Section 263(1)Section 3

also relying on following judicial pronouncements as having been relied upon by the Pr.CIT in his order as under: “In the case of Malabar Industrial Co. Ltd. v. CIT (2000) 243 ITR 83 (50) has been , held that the pre-requisite to the exercise of jurisdiction by the Commissioner under

Sampkhand Group Seva Sahakari Sangh Limited, Samphkand vs. Principal Commissioner of Income Tax, Hubli

ITA 366/BANG/2022[2017-18]Status: DisposedITAT Bangalore23 Aug 2022AY 2017-18

Bench: Shri Chandra Poojari & Smt. Beena Pillaiassessment Year : 2017-18 M/S. Sampkhand Group Seva Sahakari Sangh Ltd., The Principal No. 104, Sahakari Commissioner Of Sangh, Kumta Road, Income Tax, Janmane, Hubli. Vs. Samphkand – 581 315. Pan: Aanas3902K Appellant Respondent : Shri S.V. Ravishankar, Assessee By Advocate : Shri Sumer Singh Meena, Cit Revenue By Dr-1 Date Of Hearing : 11-08-2022 Date Of Pronouncement : 23-08-2022 Order Per Beena Pillaipresent Appeal By The Assessee Has Been Filed By Assessee Against The Order Dated 29/03/2022 U/S. 263 Passed By The Ld.Pr.Cit, Hubli Relating To Assessment Year 2017-18 On Following Grounds Of Appeal: “1. The Order Of The Learned Principal Commissioner Of Income-Tax Hubli, Passed Under Section 263 Of The Act In So Far As It Is Against The Appellant Is Opposed To Law, Weight Of Evidence, Natural Justice, Probabilities, Facts & Circumstances Of The Appellant'S Case.

For Respondent: Shri S.V. Ravishankar

Section 143(3)Section 263Section 801Section 80PSection 80P(2)(a)Section 8o

income on deposits placed with SBI was not exempt under section 80P. 20. This view is also supported by the following judicial decisions: 1. Malabar Industrial Co. Ltd [2000] 243 ITR 83 (SC) 2. Daniel Merchants P. Ltd. 2017- TIOL-455-SC-IT 3. Rajmandir Estates

ACIT 2(3) (1), Mumbai vs. M/S. Thakkr Housing Development Pvt. Ltd, Mumbai

In the result all the five appeals filed by the learned assessing officer are dismissed

ITA 2135/MUM/2021[2012-13]Status: DisposedITAT Mumbai22 Aug 2022AY 2012-13

Bench: Shri Prashant Maharishi, Am & Shri Rahul Chaudhary, Jm

For Appellant: Shri Rishabh Shah, ARFor Respondent: Shri Amol Kirtane, CIT DR

Section 245D(4)

This is underlying principle in the decision by Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd vs. CIT, 243 ITR 83, wherein the Hon'ble Supreme Court after referring to the earlier ITA nos. 2131to 2135/Mum/2021 decision in the case of Smt. Taradevi Agrawal