When the mandatory provision not followed leading to evasion of tax by way of excess relief granted to the assessee, the remedy open to the officer is to revise the assessment by invoking powers under Section 147

M/s IVL India Pvt. Ltd. Vs. Commissioner of Income Tax (High Court of Kerala at Ernakulam) – – Assessee while working out the eligible deduction did not exclude 90% of the income received by way of consultancy charges which is to be specifically excluded by virtue of mandatory provision contained in Explanation (d) of Section 80HHE of the Act. In fact, since there is an omission to apply the statutory provision in the working out of eligible deduction of profit on export of software, the assessment could even be rectified through rectification proceedings under Section 154. In any case when the mandatory provision is not followed leading to evasion of tax by way of excess relief granted to the assessee, the remedy open to the officer is to revise the assessment by invoking powers under Section 147.

HIGH COURT OF KERALA AT ERNAKULAM

ITA. No. 10 of 2010()

M/S.IVL INDIA PVT. LTD., Vs THE COMMISSIONER OF INCOME TAX,

Dated : 05/01/2011

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