TaxTMI 
TaxTMI 
2024 (12) TMI 1215
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....ating the same as erroneous and prejudicial to the interest of the revenue and directing the Assessing Officer ("AO") to pass a fresh order after examination of the facts of the case. 2. Ld. Pr. CIT, inter-alia, erred in observing that the AO has not examined the issues during the assessment proceedings even when the AO has verified the issues. Ld. Pr. CIT, inter-alia, failed to appreciate that: i. Provisions of section 263 of the Act cannot be invoked when assessment order is passed after making enquiries; ii. Provisions of section 263 of the Act cannot be invoked where two views are possible and AO has adopted a possible view; iii. the pre-requisites for invoking provisions of section 263 of an order being erroneous in so far as is prejudicial to the interest of the revenue are not satisfied in the facts of the present case; iv. Notice issued on erroneous facts is bad-in-law and accordingly the order u/s. 263 of the Act ought to be quashed. v. Merely because the order of AO is not speaking, it does not tantamount to non enquiry or non application of mind by the AO. 4. The Appellant prays that it be held that ....
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....or for that matter even considering the detailed contentions made by the assessee before him, who we find made out a fair enough case before the Ld. PCIT of there being no error in the order of the Assessing Officer on the issues identified by ld. PCIT. 3.2 Our detailed reasoning leading to our findings as above follows. 4. The order of the ld. PCIT reveals that he found the assessment order passed by the AO u/s 143(3) of the Act in the case of the assessee for the impugned year erroneous causing prejudice to the revenue on two counts, for the AO having allowed the assessee: (i) claim of employers contribution to staff provident fund in excess of 27% of the salary, which was contrary to Rule 87 of the Income Tax Rules, 1962, (ii) depreciation on addition of new plant and machineries amounting to Rs. 35,73,93,105/- while the same ought to have been limited to the amortized value of the assets amounting to Rs. 4,81,095/-. 5. Ld. Counsel for the assessee during the course of hearing before us demonstrated that with respect to both the issues the assessee had filed detailed submissions to the Ld. PCIT to the effect that the impugned issues were examined durin....
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....wance of the same. Submissions made before PCIT on the issue of excess claim of contribution to PF 7. The ld. counsel for the assessee further pointed out that the facts relating to the issue which were explained to the Assessing Officer were also pointed out to the ld. PCIT. That it was explained to him that the limit of contribution to provident fund and superannuation fund as per rule 87 of the rules was applicable only with respect to PF and superannuation fund and did not include other funds. That the excess noted by the ld. PCIT was of contribution made to other funds like gratuity fund, NPS, leave encashment etc. The Ld. Counsel for the assessee pointed out that detailed working of the contribution made to PPF and superannuation fund was also furnished to the Ld. PCIT demonstrated the contribution being to the tune of 4.07% of salary, which was well within the limit of 27% prescribed rule 87 of the Income Tax Rules. He also pointed out that the Ld. PCIT had noted this explanation of the assessee of having made no contribution in excess of the prescribed limit of 27% as per Rule 87 of Income Tax Rules, 1962 but of only 4.04% of the salary wages and bonus paid at para 4 ....
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.... PCIT that there was several rulings of the ITAT including Special Bench of the ITAT in the case of ACIT vs. Progressive Construction Ltd. (2018) 92 taxman 104, Hyderabad holding that even in the case of assets acquired through concessionaire agreement, the assessee was entitled to depreciation and not amortization of the same. It was pointed out that the Special Bench in the said case had held the CBDT Circular No. 9 of 2014 dated 23-01-2014, relied on by the revenue for allowing only amortization of acquired assets, to be not applicable. Besides that, it was pointed out, several other decisions were referred before PCIT ruling in favour of assessee allowing depreciation on assets acquired for a specified period by virtue of concessionaire agreements. 10. It is evident from the above that the assessee had made detailed submissions on both the issues being examined by the AO during assessment proceedings and also of the same being rightly claimed by the assessee in accordance with law. 11. We find that at para 4, the PCIT briefly notes the contentions of the assessee before him with respect to both the issues which were to the effect: (i) on the issue of contribution....
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....e of) Assessment year 2010-11 High Court by impugned order held that Commissioner has power to consider all aspects which were subject matter of Assessing Officer's order, if in his opinion, they were erroneous, despite assessee's appeal on that or some other aspect Whether SLP filed against impugned order of High Court was to be dismissed - Held, yes [Para 2] [In favour of revenue] In view of the above jurisprudence, the undersigned can exercise jurisdiction u/s 263 of the Act when the A.O. did not go into issue with respect to whole amount. Therefore, the A.O. while making addition should have restricted the depreciation to the amortized value of Rs. 4,81,095/- instead of whole amount of Rs. 35,73,93,105/-. The erroneous order of the A.O. resulted in underassessment by Rs. 35,69,12,010/- thereby short levy of taxes to such extent. Therefore, the order of the A.O. is erroneous and prejudicial to the interest of the revenue. Further, it is seen that the maximum allowable deduction as per Rule 87 of IT Rules comes to Rs. 31,85,190/- whereas the A.O. has allowed excess deduction as contribution to PF and other funds by Rs. 5,71,810/- (Rs.37,57,000- Rs. 31,85....
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....onstrated both the issues being examined by the AO and even the ld. PCIT notes the same in his order. He however finds to the contrary that the Assessing Officer had not made inquiry with respect to these issues without specifying as to how he found so. No attempt has been made by the Ld. PCIT to contradict the contention of the assessee before him after dealing with the specifics relating to the same. It is just a general cursory finding of the Ld. PCIT, without considering or dealing with the contention of the assessee before him. 17. With regard to his finding of the assessment order being erroneous for having wrongly allowed the contribution made by the assessee to PF in excess of the limit specified u/r87 of the Rules, we find that the assessee had explained no excess claim to have been made and had pointed out the demonstration of this fact to the AO with details during assessment proceedings. He had also explained how the excess had been erroneously calculated by the Ld. PCIT by considering contribution to funds which were not covered u/R87 of the Rules. The ld. PCIT however we find completely ignores these submissions and goes on to record a contrary finding, of the asse....