Recently,  ITAT has again reiterated that the CBDT circulars are burning on the Officers.

Let us have a short overview of the case:

Heera Kerala Developers Pvt Ltd (ITA 243 / COCH / 2019)

Facts:

1. The AO made additions U/S 68, which was set off against the losses from business and profession. However the PCIT invoked Sec 263 and did not allow set off of losses against the additions made under Section 115BBE(1).

2. The Circular No. 3/2017 of the Board dated 20th January, 2017, regarding amendment made in section 115BBE(2) of the Act mentions that the pre-amended provision of section 115BBE of the Act did not convey the intention that losses shall not be allowed to be set-off against income referred to in section 115BBE of the Act.

3. The assessee contended that the amendment in Sec 115BBE, inserting the words ‘or set off of any loss’ is applicable with effect from pt of April, 2017 and applies from assessment year 2017-18 onwards. The year under consideration is AY 2014-15.

ITAT Cochin held as below:

1. The Revenue officers are bound to follow the circular issued by the CBDT but here in this case the learned PCIT has exercised his jurisdiction in spite of the clear cut clarification of the CBDT in the circular cited above.

2. Therefore, the learned PCIT’s order is not sustainable. Accordingly the order passed by the AO which is para materia with the circular issued by the CBDT is not erroneous and not prejudicial to the interest of Revenue