Appeal Against Revisional Order: Havells India Limited vs PCIT Central Delhi-2

Introduction

The Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘B’, presided by Judicial Member Shri Chandra Mohan Garg and Accountant Member Shri Pradip Kumar Kedia, heard the case ITA No. 1070/DEL/2022 concerning Havells India Limited’s challenge against the revisional order passed by the Principal Commissioner of Income Tax (Central), Delhi-2 for the Assessment Year 2018-19.

Background

Havells India Limited appealed against the revisional order dated 30.03.2022, issued under Section 263 of the Income Tax Act, 1961. The order by the Assessing Officer (AO) dated 31.12.2019 was deemed erroneous and prejudicial to the interests of revenue.

The appellant and respondent were represented by Shri Akshat Jain, CA, and Shri T. James Singson, CIT-DR, respectively. The hearing took place on 11.05.2023, with the pronouncement of the order on 17.05.2023.

Arguments and Deliberation

The appellant contended that the twin conditions for the applicability of Section 263 were not met. Specifically, a proposed disallowance of Rs. 1,15,00,000 under the Shahenshah Scheme did not alter the tax liability under Section 115JB of the Act, thus not prejudicing the revenue. With the switch to Section 115BAA from AY 2020-21, the appellant argued no carry forward credit of Minimum Alternate Tax (MAT) would be availed, negating any alleged prejudice to the Revenue.

The Revenue, however, was not convinced, stating the matter was not verifiable at the present and maintained that the revisional order should stand.

Judgment

The Tribunal, after reviewing the assertions and the affidavit by the assessee, concluded that no revenue benefit was derived by the assessee from the alleged error. Consequently, the prerequisites for the invocation of Section 263 were not met, leading to the setting aside and quashing of the revisional order.

Conclusion

The appeal by Havells India Limited was allowed, setting a precedent on the interpretation of revisional powers under Section 263 of the Income Tax Act. The case underscores the importance of clear legislative guidelines and the concept of prejudice against the revenue.

Order Pronouncement

The order was pronounced in the open court on 17/05/2023 by both members, marking the conclusion of a critical interpretation of the law that may influence future cases of similar nature.

Appeal Against Revisional Order: Havells India Limited vs PCIT Central Delhi-2