TaxTMI 
TaxTMI 
2023 (9) TMI 1304
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....der dated 17.02.2020, and the total income was determined at Rs. 95,52,38,865/-. 4. Thereafter PCIT called for the assessment records. After perusing the assessment records PCIT was of the view that the assessment order framed by the AO u/s. 143 r.w.s. 144C(3) was erroneous and prejudicial to the interest of Revenue. He thereafter issued notice u/s. 263 of the Act, which was sent to the assessee on 08.03.2022. PCIT after considering the submissions filed by the assessee concluded that the assessment order passed by the AO was erroneous, in so far as prejudicial to the interest of Revenue as per explanation 2A to section 263 of the Act. The basis for arriving at the aforesaid conclusion by PCIT was inter alia for the reason that the provision for bad debts was not examined by the AO with regard to the genuineness of the bad debts. He thereafter vide order passed u/s. 263 dated 25.03.2022 in DIN & Order No. ITBA/REV/F/REV5/2021-22/1041531884(1), set aside the assessment order passed by AO and directed him to pass fresh assessment order after considering the observations made by him. 5. Aggrieved by the order of PCIT, assessee is now in appeal and has raised the following grounds:- ....
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....f net expense of INR 12,72,99,842 debited to Profit and Loss Account) representing bad debts written off during the year was duly claimed by the Appellant in its return of income for the assessment year 2016-17 in accordance with the provisions of the Act and the decision of the Hon'ble Supreme Court in the case of TRF Ltd. v. CIT (2010) 323 ITR 397 as well as Hon'ble CBDT Circular no. 12/2016 dated May 30, 2016. 5.3 Without prejudice to the above grounds, that, Ld. PCIT failed to appreciate that amount of INR 15,26,05,340 (part of net expense of INR 12,72,99,842 debited to Profit and Loss Account) representing write-off of interest receivable during the year was duly claimed by the Appellant in its return of income for the year under consideration in accordance with the provisions of the Act and the decision of the Hon'ble Supreme Court in the case of TRF Ltd. v. CIT (2010) 323 ITR 397 as well as Hon'ble CBDT Circular no. 12/2016 dated May 30, 2016. 6. Without prejudice to the above grounds, that, Ld. PCIT failed to appreciate that "amortization of foreign currency monetary item translation difference account" amounting to INR 25,18,95,557 (part one of INR 25,59,....
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....which depends on possibility of guess work but it should be actual error either of facts or of law. With respect to the invoking of explanation 2A to section 263 of the Act, learned AR submitted that the law is now very well settled that the revisionary jurisdiction u/s. 263 of the Act could be invoked only when an assessment was completed without making enquiries or verification and not where enquiries were made. In support of his aforesaid contentions he placed reliance on the decision rendered by Hon'ble Delhi High Court in the case CIT vs. Sunbeam Auto Ltd. reported in 189 Taxman 436 (Delhi), and Delhi High Court in the case of Vikas Polymers [2010] 236 CTR 476 (Delhi) and other decisions cited in his synopsis. 9. He thereafter submitted that the revisionary proceedings u/s. 263 have been invoked in respect of deduction of provision for bad debts which were written back amounting of Rs. 38,18,704/- from the total income of the assessee in the year under consideration on the presumption that no enquiries were conducted by the learned AO with respect to the aforesaid claim, in the course original assessment. Learned AR thereafter pointed to the notice issued u/s. 142(1) dated 23....
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....t of enquiry cannot be the reason based on which powers u/s. 263 of the Act can be invoked to interdict an assessment order. He also pointed to the reply given by the assessee before PCIT and submitted that no enquiry of finding has been rendered by the PCIT on the issue. He therefore submitted that the order of PCIT be set aside. 10. Learned DR on the other hand took us through the order of PCIT and supported his order. 11. We have heard the rival submissions and perused the materials available on record. The issue in the present case is about the invoking of provisions of Section 263 by Ld. PCIT. Section 263(1) of the Act, the powers under which Learned PCIT has assumed power for revision reads as under : "(1) The Principal Chief Commissioner or Chief Commissioner or the Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such or....
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....as charged to P & L account therefore the same has been claimed as deduction in the current assessment year i.e. A.Y. 2016-17 to avoid double taxation of the same item". (Refer PB 33 of the paper book). It is also a fact that after the receipt of the aforesaid reply no query was raised by the AO on the issue of provision for doubtful debts vide notice u/s 142(1) dated 12.12.2019 (page 48 of the paper book) nor any further details were furnished by assessee on the issue as is evident from the letter to AO dated 04.12.2018 (copy placed at page 67 of the paper book). It is thus evident that though the assessee was asked to justify the claim of expenses with necessary evidences, the assessee had merely explained its position by way of note without giving its details like in which year the amount of provision that was written back, what was its breakup. It is also a fact that no reconciliation of the same was furnished by the assessee to AO and the AO had accepted the contentions of the assessee by not making any addition of the amount of such provision for doubtful debts. In such a situation, we are of the view that though the AO had called for the required information of the issue and....