TaxTMI 
TaxTMI 
2019 (1) TMI 2010
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....o law and facts of the appellant's case as the orders passed u/s 143(3) are neither erroneous in so far as it is prejudicial to the interest of the Revenue nor covered under newly inserted Explanation2 of section 263 w.e.f 1st June, 2015 on the issue of allowability of deduction u/s 35AD of the Act. 2. That the proceedings u/s 263 of the Act by the Pr. CIT-4 have been initiated on account of 'change of opinion' on the basis of suggestion by Audit part by taking view than the view expressed by the Department in response to the audit objection by not accepting the audit objection and defending that the activity of the company is fully covered u/s 35AD, which is not permitted by law.] 3. The jurisdiction u/s 263 by the Pr. CIT-4 wrongly as....
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....the main observation of the survey team was that the assessee-company has made certain payments to Doctors who have referred patients to the hospital which are debited to P & L Account under the head 'referral payments'. A.O. observed subsequent to survey operations, vide letter dated 04.02.2014 the assessee agreed for the disallowance of a portion of payments to the Doctors to avoid further litigation and accordingly, the A.O disallowed a sum of Rs. 11,30,073/- and brought it to tax. Subsequently, the CIT assumed jurisdiction u/s 263 of the Act and on perusal of the assessment record, he came to the conclusion that the assessee was allowed deduction u/s 35AD of the Act by the AO without proper verification and thus according to the CIT, t....
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....e proceedings dated 17/10/2012 on the basis of letter dated 09/10/2012 received from Central Govt Health Scheme based on information gathered and certified by the Additional Director CGHS evidencing hospital is having 122 beds." 4. Thus, according to the Learned Counsel for the Assessee, relevant material has been submitted before the A.O. and after being satisfied with the allowability of the assessee's claim only, the A.O. has allowed the deduction u/s 35AD of the Act. Further, he also submitted that the CIT has not brought out as to how the assessment order has caused prejudice to the interest of Revenue and therefore, the twin conditions of section 263 of the Act are not satisfied and the revision order needs to be set-aside. He relied....
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....sment order erroneous. It is settled law that to revise an assessment order, the CIT should be satisfied that the order of the A.O. is erroneous in so far as it is prejudicial to the interest of the Revenue. We find that during the proceedings u/s 263 of the Act, the assessee has filed all the details before the CIT, but he has failed to consider the same. Without bringing on record as to how the non-consideration of the claim u/s 35AD has caused prejudice to the interest of revenue, he has remitted the matter to the file of the A.O with a direction to re-do the assessment after examining the claim u/s 35AD in detail. Therefore, according to us, the CIT has failed to fulfil the twin conditions u/s 263 of the Act for making the revision. 7.....