Law: Income Tax Act, 1961

Section: 36(1)(viii),263

Section 36(1)(viii), read with section 263, of the Income-tax Act, 1961 - Financial corporation, reserve created by (Conditions precedent) - Whether where revenue has not preferred any appeal against an order, it should not challenge subsequent order on same issue; and in case appeal is preferred from subsequent order, then, an affidavit pointing out distinguishing features in present case from earlier case warranting different view should be filed - Held, yes - Assessee-bank was granted deduction under section 36(1)(viii) - CIT revised said order and withdrawn deduction holding that assessee-bank was ineligible for said claim-Tribunal in Union Bank of India v. Asstt. CIT [2011] 16 taxmann.com 304 held that deduction is to be allowed to Government Banks - Whether since said decision had not been challenged by revenue, there was no occasion for Commissioner to exercise his power under section 263 - Held, yes [Para 5 and 7] [In favour of assessee] FACTS â–  The Assessing Officer granted deduction to the assessee-bank under section 36(1)(viii). â–  The Commissioner exercised its power of the revision under section 263 on the question of deduction claimed under section 36(1)(viii) and held that assessee bank was ineligible for deduction. â–  On appeal: HELD â–  In CIT v. Smt. Veena G. Shroff [IT Appeal No. 71 of 2013], the Court held that Revenue has accepted the order by not preferring an appeal against the earlier order, the revenue should not challenge the subsequent order on the same issue. In case an appeal is preferred from the subsequent order, then the Memo of appeal must indicate the reasons as to why an appeal is being preferred in later case where no appeal was preferred from the earlier order of the Tribunal which has merely been followed in the later case. In any case, the Officer concerned must atleast file an Affidavit before the matter comes up for admission, pointing out distinguishing features in the present case from the earlier case, warranting a different view in case the appeal is being pressed. The absence of this being indicative of non-application of mind, does undoubtedly given an opportunity to the revenue to…

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