Assessing Officer's Actions Upheld, Jurisdiction Assumption Unjustified

The Tribunal found that the Assessing Officer had adequately considered the relevant issues during the assessment proceedings for both assessment years. Consequently, the Principal Commissioner of Income Tax's assumption of jurisdiction under section 263 was deemed unjustified. The Tribunal set aside the revision orders and partly allowed the appeals for both assessment years 2013-14 and 2014-15.

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Issues:
- Validity of assumption of jurisdiction u/s 263 by the ld. PCIT for assessment years 2013-14 and 2014-15.
- Treatment of subsidy received from the Government of Maharashtra under the Package Scheme Incentives- 2007 for depreciation purposes.

Analysis:

*Assessment Year 2013-14:*
The appellant challenged the order under section 263 of the Income Tax Act, 1961, passed by the Principal Commissioner of Income Tax-1, Aurangabad, dated 28.03.2019. The issue revolved around the treatment of subsidy received from the Government of Maharashtra under the Package Scheme Incentives- 2007 for depreciation purposes. The ld. PCIT held that the Assessing Officer failed to enquire and verify the applicability of Explanation 10 to section 43(1) as well as discrepancies between income shown in the return of income and receipts reflected in Form 26AS. The ld. PCIT set aside the assessment order directing a de novo assessment. The appellant contended that the Assessing Officer had examined the issue during assessment proceedings and took a plausible view. The Tribunal held that the ld. PCIT cannot invoke jurisdiction u/s 263 as the Assessing Officer had applied his mind, and no further enquiry was necessary. The order of revision u/s 263 was set aside, and the appeal was partly allowed.

*Assessment Year 2014-15:*
Given the identical facts and issues in both appeals, the decision in the assessment year 2013-14 was applied mutatis mutandis to the assessment year 2014-15. The appeal for the assessment year 2014-15 was also partly allowed. In conclusion, both appeals of the assessee were partly allowed. The order was pronounced on January 4th, 2023.

Overall, the Tribunal found that the Assessing Officer had considered the relevant issues and took a plausible view during the assessment proceedings. Therefore, the ld. PCIT was not justified in exercising the power of revision under section 263 of the Act. The Tribunal set aside the orders of revision and partly allowed the appeals for both assessment years.

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