TaxTMI 
TaxTMI 
2024 (2) TMI 335
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....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 grievously erred in setting aside the assessment order and directing to frame fresh assessment order on the issues of Interest accrued but not paid to Power Rs. 5,79,50,223/-, Finance Corporation (PFC) of claim of Bad Debts of Rs. 12,78,54,821/- and provision on account of leave encashment of Rs. 23,29,71,801/-, without pointing any error in appellant's claim." 3. The solitary contention of the ld. Counsel for the assessee against the order passed by the ld. PCIT in exercise of his powers of revision u/s 263 of the Act, was to the effect that there was no categorical finding of error in the assessment order by the ld. PCIT. That in fact the ld. PCIT had noted finding merit in the explanation furnished by the assessee to the allegedly incorrect claims allowed by the Assessing Officer for which purpose he had assumed jurisdiction to revise the order of the Assessing Officer u/s 263 o....
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....any has made the provision of Rs. 23,29,71,801/- on account of Leave Encashment as noticed from Annexure 6B of clause 21(B) attached with 3CD form. It is also noticed that the said amount was not paid before filing of Return of Income. However, while working out the taxable income, the assessee company added back an amount of Rs. 15,89,19,530/- only, in its statement of income. The assessee was required to add back total amount of Rs. 23,29,71,801/-. The difference works out to Rs. 7,40,52,271/-. Further, vide submission dated 7th March 2016, the assessee company has also confirmed that the company has made provision of Rs. 23,29,71,801/- on account of leave encashment and amount was unpaid before the due date of filing of Return of Income. Hence, the amount of Rs. 7,40,52,271/- was required to be disallowed at the time of assessment proceedings u/s. 143(3) of the Act." 5. The order further reveals that, when confronted with the same during revisionary proceedings, the assessee explained that all the above claims of the assessee had been rightly allowed by the Assessing Officer in accordance with law. His reply in this regard is reproduced at paragraph no.3 of the order of the L....
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.... 28125000 2557000 28.9.12 53695000 36976623 SCADA 9% 78540000 78540000 7068600 RAPDRP 9% 15450000 15450000 13905000 TOTAL 57950223 As per terms of Sanction Letter of the Loan from PFC, the Loan under RAPDRP Parts and SCADA aggregating to Rs. 6155 Lacs was to be converted into Capital Grant on fulfilment of stipulated conditions. It was provided that if conditions are not fulfilled, the loan shall be repayable in 70 equal monthly instalments over a period of 10 years of Rs. 51.40 Lacs each starting from June 2014. Further the Loan under Part-B of R-APDRP Scheme, amounting to Rs. 1545 Lacs will be converted into Grant upto 50% on fulfilment of stipulated conditions. If conditions are not fulfilled, the loan will be repayable in 150 equal monthly instalments over a period of 15 years of Rs. 7.62 Lacs each, starting from June 2014 Applicable Rate of Interest was 9% p.a. The copy of the relevant Sanction Loan/Agreement is enclosed for immediate reference in Annexure-II. As a matter of fact, the said loan now has been converted into Capital ....
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.... below for reference: Particulars Amount in Rs. /Lacs Treatment in Return of Income Opening Balance of Provision for Bad Debt as on 01.04.2012 10156.32 Add: Fresh Provision in Books for FY 12-13 37.40 Disallowed Less: Amount written off against existing provision in Books (1278.54) Allowed Closing Balance of Provision for Bad Debt as on 31.03.2013 8915.18 In view of the above, it is submitted that the company has rightly claimed the deduction on account of Bad Debts and the same does not require any revision. (3) Provision for Leave Encashment: It has been stated in the notice that the Company has wrongly offered the disallowance on account of provision for Leave Encashment. It is submitted that for the year under consideration, the opening balance of Leave Encashment was Rs. 84,88,77,625/- as on 01.04.2012. There was fresh addition of accrual (including provision of Rs. 7,40,52,271/-) during the year amounting Rs. 15,89,19,530/- which was rightly added back in statement of income and also as reported in the Tax Audit Report vide Form 3CD serial no.21(i)B)(b) (Copy enclosed in Annexure-II....
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....g out that the ld. PCIT noted no error in the assessment order. His findings at paragraph no. 4.2 of the order with respect to the assessee's reply and clarification are that he finds the same to be in order in view of the supporting details filed by the assessee. The same are reproduced hereunder:- "4.2 The submission of the assessee company has been perused and the clarification given on the issues referred above appear to be in order in view of supporting filed during 263 proceedings." 8. Having so noted, the ld. PCIT goes on to hold the assessment order erroneous merely for the reason that these explanations and documents were not filed to the Assessing Officer during assessment proceedings and therefore, the Assessing Officer did not make proper inquiries on these issues. His findings, in this regard, are as under:- "However the assessment record does not show that these were submitted before the assessing officer. Further, the AO failed to examine and verify the facts as now presented by the assessee company. The assessing officer, at the time of assessment proceedings, thus did not make proper enquiries on these three issues and passed the assessment ord....