TaxTMI 
TaxTMI 
2023 (4) TMI 383
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....come Tax Act, 1961 since the order passed by the Assessing Officer (A.O.) was neither erroneous nor prejudicial to the interest of the revenue. 2. That on the facts and in the circumstances of the case, the impugned order passed u/s 263 is grossly arbitrary and bad in law in relation to the issues raised and adjudicated therein and needs to be summarily quashed. 3. That the Ld. Pr. CIT has erred both on facts and in law, in assuming and exercising the jurisdiction u/s 263 of the Income Tax Act, 1961 without considering the material fact that during the course of the assessment proceedings, the assessee had brought on records all the materials and evidences relating to the issues and the same were duly verified by the AO before passing the impugned assessment order. 4. That on the facts and in the circumstances of the case and without prejudice to Ground No. 1, 2 & 3 above, the Ld. Pr. CIT was not justified and grossly erred in directing the AO to examine the claim for exclusion of provision for NPA of Rs. 64,74,97,633/- written back without appreciating the fact that provision for NPA made in earlier years was duly added back. 5. That on the fact....
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....n stated that in case claimed amount in A.Y. 2012-13 & 2013-14 is allowed in appeal, the aforesaid claim be treated as withdrawn. As the matter is pending in appeal, the assessee is not allowed to write back Provision for NPA on protective basis as per the Income Tax Act, 1961, (ii) the assessee has debited CSR expenses to the tune of Rs. 1,27,00,000/-. However, the same is not an allowable expense as per Section 37(1) of the Income Tax Act, 1961 and is required to be added back to the total income of the assessee. (iii) as per Form 3CD it was noted that the assessee company has claimed depreciation of Rs. 3,04,55,58,016/- as per Income Tax Act, 1961. However, on further perusal of additional details (from point no. 18 of Form 3CD) it transpired that the assessee company has claimed excess depreciation of Rs. 87,08,860/- on the Block of Plant and machinery (80%) which is required to be disallowed, the details of which is given below: Block Opening Balance Purchase more than 180 days Purchase less than 180 days Deduction Total depreciation allowable Depreciation Allowed Difference P&M (80%) 65,26,297 3,03,54,407 31,45,10,006 15,53,08,....
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....e. The assessee company has claimed depreciation of Rs. 3,04,55,58,016/- and further perusal of additional details, it transpired that the assessee company has claimed excess depreciation of Rs.87,08,860/- on the Block of Plant and machinery (80%) which is required to be disallowed. The assessee has failed to completely disclose its true and correct income by non-furnishing of details as required under provisions of IT Act, 1961. The A.O. has passed the assessment order without making enquiries or verification which should have been made in the instant case. Clause (a) of Explanation - 2 to Section 263(1) is attracted in this case. Accordingly, it is held that the assessment order is erroneous insofar as it is prejudicial to the interest of the revenue." 5. Aggrieved, the assessee is now in appeal before this Tribunal. Ld. Counsel for the assessee vehemently argued referring to the written submissions placed on record and further, summarising the facts that as regards the issue of provisions of NPA at Rs. 64,74,97,633/- that provision of NPA written back during the year in computation of income for normal provisions was not on protective basis and no appeal has been fil....
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....rector General or Commissioner authorized by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explan....
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....invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the ITO is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, th....
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....,97,633/-. The above write back was on account of gross provision (before write back) made in A.Y. 2012-13 to A.Y. 2014-15. In the assessment u/s 143(3) completed for A.Y. 2012-13 and A.Y. 2013-14, the provision for NPA was added back (net of write back for earlier years). Accordingly, in the computation of book profit above, the assessee has claimed provision for NPA written back against provision made in A. Y. 2012-13 & A.Y. 2013-14 on protective basis. In case claim in A.Y. 2012-13 & 2013-14 is allowed in appeal, the aforesaid claim be treated as withdrawn." The assessee has written back Provision for NPA amounting to Rs.46,75,71,359/- in computation of book profits on protective basis. The said claim of the assessee was not allowed by the learned AO in the assessment order passed u/s 143(3) of the Act. The relevant part of the order is reproduced below: '10. Provision for NPA written back As per the calculation of MAT, the assessee has excluded Rs.46,75,71,539/- on account of provision for NPA written back during the year on the basis that it was added back in earlier year. Since the assessee has not accepted the addition made on account of NPA in MAT....
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....of Rs.71,73,06,600/-, it has claimed write back of provision for NPA amounting to Rs.64,74,97,633/- under normal provisions and Rs.46,75,71,359/- under MAT provisions. The above details were duly submitted during the course of assessment vide letter dated 24-12-2018. Copy of the letter was duly submitted before the learned PCIT also, copy enclosed at page 50-52 of the paper book. It was also submitted that after due verification, the learned AO in his assessment order allowed the deduction of Rs.64,74,97,633/- in computing total income under normal provisions but disallowed the claim of Rs.46,75,71,359/- in computation of income under MAT provisions. Here, it is further submitted that the sum of Rs.64,74,97,633/- was already added back by the assessee in computation of income under normal provisions for AYs 2009-10, 2011-12, 2012-13, 2013-14 and 2014-15, thus adding the same again in the current year would tantamount to double addition of the same income. Thus, it is humbly submitted that this issue was duly examined by the learned AO during assessment and after due verification he has taken a plausible view to add back the sum of Rs.46,75,71,359/- in computation ....
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....ease note that if a query has been raised at the time of assessment and the same was duly responded to by the assessee, it would not lead to the conclusion that the AO has passed the assessment order without making adequate enquiries/verification which he was required to make so as to render the assessment order erroneous and prejudicial to the interests of the revenue. Further, it is a trite proposition that in a case where the AO has taken a plausible view, then the CIT is not permitted to substitute his own view because he disagrees with the view of the AO to warrant initiation of proceedings u/s 263 of the Act." 11. From perusal of the above submissions which remained uncontroverted by ld. D/R, we are satisfied that firstly, ld. AO conducted necessary enquiry on this issue of provisioning for non-performing assets and we also find that in the computation of total income under normal provisions, provision for NPA debited during the year is added back i.e. not claimed as deduction. The assessee submitted that the details for the AY 2009-10 to AY 2014-15 out of the total amount disallowed by ld. AO/suo-moto disallowed by the assessee of Rs. 71,73,06,600/- it claimed write back ....