TaxTMI 
TaxTMI 
2024 (2) TMI 224
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....of the Income-tax Act, 1961 [hereinafter referred to as "the Act"], for the Assessment Year (AY) 2014-15. 2. The grounds raised by the assessee are as under:- "(1) That on facts, and in law, the learned CIT has grievously erred in assuming jurisdiction u/s. 263 of the Act, without recording a satisfaction as to how the assessment order passed u/s 143(3) of the Act is erroneous and prejudicial to the interest of Revenue. (2) That on facts, and in law, the proceedings u/s. 263 are void as the original assessment order was passed u/s. 143 (3) of the Act after due inquiry and application of mind / and is not erroneous and prejudicial to the interest of the Revenue. (3) That on facts, and in law the learned CIT has ....
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....this issue. 4. Having said so, we shall now proceed to bring out the facts relating to the present case before us. 5. As transpires from the order of the ld. PCIT, he noted two irregularities in the assessment order passed in the case of the assessee so as to assume jurisdiction for revision under Section 263 of the Act. (i) Incorrect allowance of additional depreciation; (ii) Wrong claim of Bad Debts These facts find mention at paragraph nos. 2 & 2.1 of the order of the ld. PCIT as under: "2. Incorrect allowance of additional depreciation:- On verification of records, it is seen that during the year under consideration, you have claimed additional depreciation of Rs. 190,48,38,998/- and the same was allo....
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....book profit u/s 115JB of the Act and hence the order passed u/s 143(3) of the Act is erroneous & it was prejudicial to the interest of revenue." 6. With respect to the issue of allowance of additional depreciation, the ld. Counsel for the assessee has fairly conceded that he has no case since an identical issue of incorrect allowance on additional depreciation in identical set of facts, and on which revisionary jurisdiction was exercised u/s 263 of the Act, was upheld by the ITAT in the case of Dakshin Gujarat Vij Co. Ltd. (supra). Copy of the order was placed before us. 6.1. Therefore, we have no hesitation in holding that with respect to the finding of error by the Ld. PCIT in the assessment order on account of incorrect allowance o....
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....mount in Opening Balance 4,87,15,74,512/- Add: Provision For Bad debts 22,44,07,363/- Less: Actual Bad debts written off 3,28,28,979/- Closing Balance 5,06,31,32,987/- In view of the above, it is submitted that the company has rightly offered the provision made for doubtful debts for disallowance and has rightly claimed the deduction on account of Bad Debts and the same does not require any revision." 8. After considering the same, ld. PCIT noted the claim of the assessee to be in order, but still went on to hold the assessment order erroneous since the Assessing Officer had not examined the case. His findings in this regard are at paragraph No. 4.1 of his order as under:- "4.1 The submission of ....
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.... error in the assessment order in allowing the above claims to the assessee. The ld. PCIT was satisfied that these claims had been rightly allowed to the assessee on the basis of the assessee's explanation and the documents filed before him. When the ld. PCIT himself was satisfied that there was no error in the order of the Assessing Officer vis-à-vis irregularities noted by him initially, there can be no case for exercising any revisionary power u/s 263 of the Act. The provisions of the section are very clear. The concerned authorities can exercise revisionary powers only on fulfillment of the essential conditions of finding error in the order sought to be revised and the error being such as causing prejudice to the Revenue. In the ....
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.... error in the assessment order himself, there was possibly no scope of the issue being examined again by the AO, an officer junior in Rank to the Ld. PCIT. There was no case therefore, we hold, for the Ld. PCIT to exercise any revisionary power u/s 263 of the Act on the issue. 13. Merely because the Assessing Officer had not examined these issues during assessment proceedings does not make the assessment order erroneous particularly when the ld. PCIT finds, on the basis of explanation and documents furnished to him, that the assessee's claim was eligible as per law. At the cost of repetition, it may be stated that the powers of revision can be exercised only when the orders are found to be in error with regard to any application of law o....