TaxTMI 
TaxTMI 
2021 (2) TMI 1028
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.... the assessee filed return of income for the year under consideration declaring loss of (-) Rs. 17,54,54,175/-. The case was selected for scrutiny under CASS and the assessment proceedings have been finalized vide order u/s.143(3) of the Act dated 13.12.2016 accepting the returned loss. 4. That thereafter, vide notice u/s.263 of the Act, it was observed that from BDDR account for the FY 2013-14, the assessee bank has an opening credit balance of BDDR reserve at Rs. 21,08,91,914/- as on 01.04.2013. The closing credit balance as on 31.03.2014 is Rs. 11,98,80,028/-. Further it was noticed that the assessee has also debited an amount of Rs. 12,80,68,490/- separately to the profit & loss account as bad debts written off, but the same have not been added back to the computation of income. However, in view of the proviso to Section 36(1)(vii) of the Act, it is established position in law that in case of an assessee to whom provisions of Section 36(1)(viia) of the Act apply, only such amount of any bad debts written off can be allowed as deduction as in excess of credit balance outstanding in the bad and doubtful debts reserve. Thus, as BDDR reserve in case of the bank carried a credit ba....
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....d the assessment order accepting the documents furnished by the assessee without analyzing or examining them and when no verification has been conducted by the Assessing Officer in that area as highlighted in the order passed u/s.263 of the Act, in such scenario, the assessment order is bound to be erroneous and prejudicial to the interest of the revenue. In this case, it is a claim of written off bad debts as deduction. Whether this was examined and verified categorically by the Assessing Officer or not? 7. The Ld. DR bringing our notice at Page 54 of the paper book, Point No.16 wherein questionnaire is annexed along with notice u/s.142(1) of the Act. Point No.16 reads as under: "16. On perusal of the Schedule BP, it is noticed that you have claimed large other deduction without any income in the profit and loss account. Please furnish the details of the large deduction claimed by you. You are also requested to substantiate the claim of this large deduction." Therefore, it can be seen, when the Assessing Officer had asked for furnishing all the details of the large deduction as claimed by the assessee, he has not asked specifically regarding details of bad debts written off. ....
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....e Assessing Officer justifying that there was mistake committed by the assessee vis-à-vis his filing of original as well as revised return of income. The Ld. AR of the assessee also argued that the view taken by the Assessing Officer may not be a proper one as per the Ld. Pr. Commissioner of Income Tax is concerned nonetheless, it is definitely an appropriate view. We do not agree with the contention of the Ld. AR since taking a view should be backed by reasons and that reasons should be demonstrated in the order itself with evidences brought on record and independent enquiry conducted. In this case, the Assessing Officer has only done the work of extraction of submissions of the Ld. AR and nothing else and therefore, in fact the Assessing Officer has not formed any view. When no view has been taken, no enquiry has been conducted, when no reasons on facts has been placed on record, the order of assessment is bound to be erroneous in so far as prejudicial to the interest of the revenue. Taking the totality of facts and circumstances into consideration and aforesaid case laws, we uphold the order passed u/s.263 of the Act by the Ld. Pr. Commissioner of Income Tax." 11. The....
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.... We are not to travel beyond this point and decide whether the Assessing Officer was correct in his view which he has implied in his order. That only the express verification and examination of facts whether the Assessing Officer has done or not is to be seen, as in this case it is in issue of bad debts written off. The Hon'ble Delhi High Court in the case of CIT Vs. Toyota Motor Corporation (Delhi) (174 Taxmann 395) wherein in this case, the Assessing Officer passed an order whereby he dropped the penalty proceedings initiated in the assessee's case u/s.271C r.w.s.274 of the Act. The Commissioner exercised power conferred u/s.263 of the Act and concluded that the Assessing Officer did not verify several issues and facts as mentioned in the order passed by him nor did he carry out necessary investigations to come to a conclusion that penalty was not leviable. The Commissioner then set aside the order passed by the Assessing Officer u/s.271C of the Act to be reframed afresh. On appeal, the Tribunal however, held that the Assessing Officer had carried out due verification of relevant facts and the assessee had also shown its bona fides and its reasonable belief in not deducting tax a....