TaxTMI 
TaxTMI 
2023 (4) TMI 280
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....961 ("the Act") by invoking provisions of section 263 of the Act. 2. On facts and in the circumstances of the case and in law, the PCIT erred in fact and in law in revising the assessment framed u/s 143(3) by invoking powers u/s 263 despite the fact that the conditions stipulated for invoking such extra ordinary jurisdiction were not satisfied. 3. On facts and in the circumstances of the case and in law, the learned PCIT erred in directing to frame fresh assessment on an issue already considered and verified during the course of assessment u/s. 143(3). 4. On facts and in the circumstances of the case and in law, the learned PCIT erred in fact and in law in holding that order passed by the AO u/s 143(3) is erroneous and prejudicial to the interest of revenue without appreciating the fact that the order passed by the learned AO was after due verification of the issue, was passed after due application of mind and based on one of the possible views. 5. On facts and in the circumstances of the case and in law, the learned PCIT erred in fact and in law in passing the order u/s. 263 without controverting the facts and submissions made by the Appellant d....
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....ited towards revenue expenditure on R&D under various on expenditure were shown at Rs. 10,81,53,957/- as against 8,08,31,676/- claimed in schedule ESR of the return of income. On perusal of the case records, the PCIT observed that the Assessing Officer has not made any verification or inquiry on this issue which should have been made during the course of assessment proceedings. 4. In the 263 proceedings, the assessee submitted that detailed inquiries were conducted by the Assessing Officer during the course of assessment proceedings on the allowability of claim u/s. 35(2AB) of the Act. He drew attention of the PCIT to various notices issued by the Assessing Officer and assessee's reply to the same. The assessee further submitted that vide Form 3CM dated 07-10-2015, the DSIR passed order on approval of in house research and development facility u/s. 35(2AB) of the Act. Copy of the said approval was submitted during the course of assessment proceedings vide letter dated 09-12-2019. The assessee further submitted before PCIT that the assessee had duly submitted auditor's report certifying the prescribed details as required under Form 35CLA before the due date of filing of return of....
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....owever, the assessee did not submit the necessary documentary evidences i.e. Form-3CL issued by the prescribed authority [DSIR, New Delhi]. The assessee has also not submitted Form 3CLA which is the prescribed audit report mandatoily to be filed before the DSIR on or before due date of filing of return of income w.e.f 01/04/2010 and accordingly deductions 35(2AB) of IT Act is not allowable. It was noticed that the assessee has submitted only a certificate for recognition of in house R & D Unit at PO Box No. 20, Royakottah Road Hosur during the course of assessment proceedings. As per the amendment in Rule (A) of the Income tax Rules, the deduction under Section 35(2AB) of the IT Act will be subject to the condition that the prescribed authority shall quantity the expenditure incurred during the previous year and eligible by weighted deduction in Part B of Form 3CL. Therefore, after the amendment in Rule 6(7A) of the Income tax Rules, there is specific provision that the expenditure and amount eligible to deduction shall be quantified by the prescribed authority. However it was noticed that the expenditure and eligible deduction us 35(2AB) of the IT. Act was not quantified by the pr....
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....Rs.10, 89,53,957/- as against Rs. 8, 08,31,676/- claimed in the Schedule ESR of the return of income. However on perusal of the case record it was noticed that the Assessing Officer has not made any verification of inquiry for this issue also which should have been made during the course of assessment proceedings." 6. The assessee is in appeal before us against the aforesaid order passed by PCIT. Before us, the counsel for the assessee drew our attention to notice u/s. 142(1) of the Act issued by the Assessing Officer dated 09-09-2019 and drew our attention to question nos. 2, 5, and 6 in the aforesaid notices by which the Assessing Officer enquired into the eligibility of the assessee's claim of deduction u/s. 35(2AB) of the Act. He further drew our attention to page 40 of the paper book, at question no. 2 that where the Assessing Officer enquired regarding the expenses of Rs. 8,08,31,676/- incurred on account of R& D debited to the profit and loss account and further deduction of Rs. 12.03 crores claimed in computation but amount of Rs. 8.08 cores which is not added back. Further, the counsel for the assessee drew our attention to page 43 of the paper book to the notice issued....
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....e Assessing Officer had made detailed inquiries into the claim of deduction of the assessee u/s. 35(2AB) of the Act. The assessee had filed replies in relation to the queries raised by the ld. Assessing Officer and after considering replies filed by the assessee, the Assessing Officer allowed the claim of the assessee u/s. 35(2AB) of the Act. Therefore, evidently, it is not a case where there was any lack of inquiry on the part of the Assessing Officer regarding claim of deduction u/s. 35(2AB) of the Act. The next issue for consideration is whether the view taken by the ld. Assessing Officer was a legally tenable view or could it be inferred that ld. Assessing Officer had taken an incorrect view in the instant facts and therefore the order passed was erroneous and prejudicial to the interest of the Revenue. We observe that the in the case of Provimi Animal Nutrition India Pvt. Ltd. vs. PCIT Bangalore 124 taxman.com 73 (Bangalore Trib), the ITAT held that prior 01-07-2016, Form 3CL granting approval by prescribed authority in relation to quantification weighted deduction u/s. 35(2AB) of the Act had no legal sanctity and it was only w.e.f. 01-07-2016 that quantification of weighted d....