The Commissioner Of Income Tax (Central), Hyderabad v. M/S. Raghava Estates Ltd., Vijayawada

Kalyan Jyoti Sengupta, C.J:— This appeal is preferred against the judgment and order dated 4.8.2011 of the learned Tribunal and is sought to be admitted on the following suggested question of law:

1) Whether on the facts and in the circumstances of the case, the learned Tribunal is correct in setting aside the order of the Commissioner of Income Tax passed under Section 263 of the Income Tax Act?

2. The learned Tribunal came to the fact finding as follows:

“From the discussions made in the appeal filed by the revenue for the assessment year 2006-07 in the preceding paragraphs, it is clear that the issue of allowing deduction under Section 801B(10) of the Act in respect of “Narayanapuram Housing Colony” is a debatable issue on which two views are possible.”

3. The learned Tribunal further found on fact that the Assessing Officer has taken one of the two possible views in the assessment order.

4. From the aforesaid fact findings of the learned Tribunal, it is thus clear that the Commissioner of Income Tax should not have invoked the jurisdiction under Section 263 of the Act as it is settled position of law that if there is a debatable issue and when two views are involved and if the Assessing Officer takes one of the two possible views, the Commissioner of Income Tax cannot substitute his views to attract the provisions of Section 263 of the Act. The learned Tribunal has recorded correct legal position by dismissing the revenue's contentions and allowing the assessee's contentions.

5. Hence, we dismiss this appeal.