TaxTMI 
TaxTMI 
2025 (3) TMI 1337
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....red in holding that the assessment order dated 21.06.2021 passed by the learned Assessing Officer ('ld. AO') was erroneous as due verification was not undertaken by ld. AO on the issues identified in the said Order dated 29.03.2024. 3. That the Id. Pr. CIT failed to appreciate that the provisions of section 263 of the Act can be applied only when the twin conditions of an order being erroneous as well as prejudicial to the interest of the revenue are satisfied. 4. That the ld. Pr. CIT had mechanically initiated the proceedings by identifying as many as 30 items in his SCN dated 04.12.2023 without even alleging how the conclusion drawn by the Id. AO on such items was erroneous as well as prejudicial to the interest of revenue. 5. That the Id. Pr. CIT has erred in law and on facts in holding that order passed by the Id. AO dated 21.06.2021 is erroneous and prejudicial to the interest of the revenue, without appreciating that the assessment order cannot be said to be erroneous where the AO has taken one of the permissible views. The Id. Pr. CIT ought to have appreciated that if two views are possible, revision u/s 263 is not permissible. 6. That the learned Pr. CIT gro....
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....ddition of interest income of Rs. 8,77,84,114/- and by invoking Section 115JB of the Act. The income of the Assessee has been assessed at Rs. 667,09,13,138/-. Aggrieved by the assessment order dated 21/06/2021, the Assessee has preferred an appeal before the Ld. CIT(A), which is reported to be pending consideration. 4. Subsequent to passing of the assessment order dated 21/06/2021, the Ld. PCIT invoked revisionary power conferred on him u/s. 263 of the Act and held that the assessment order dated 21/06/2021 is erroneous in so far as prejudicial to the interest of the Revenue and directed the A.O. in following manner vide order impugned dated 29/03/2024. "1. To verify and examine the correctness and admissibility of the B01A claims of assessee amounting to Rs. 328.73 crores. While verifying the correctness of the claim, assessing officer is directed to verify whether separate books of accounts and separate balance sheet and P&L accounts are maintained for each of the eligible units and to verify the correctness of such accounts for each of the undertaking. 2. Regarding various goods and services acquired by the eligible units as per column B of form 10CEB, the same may be exami....
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.... PCIT has grossly erred in passing the order impugned and submitted that the Ld. CIT(A) has not considered the fact that provisions of section 263 of the Act can be invoked only when duel conditions are fulfilled i.e. an order being erroneous as well as prejudicial to the interest of the Revenue. The Ld. PCIT without even identifying how the conclusion drawn by the A.O. was erroneous as well as prejudicial to the interest of the Revenue, invoked the provisions of Section 263 of the Act. Thus, sought for allowing the Appeal. 6. Per contra, the Ld. Departmental Representative submitted that, the case of the Assessee was selected for 'complete scrutiny' wherein 14 issues were identified, however, the A.O. examined only three issues. The A.O. has not applied his mind on all the 14 issues. The Ld. Departmental Representative submitted that the Explanation 2 to 263 of the Act has been invoked since the assessment order deemed to be erroneous in so far as it is prejudicial to the interest of the Revenue in the opinion of the PCIT. Therefore, same cannot be interfered by the Tribunal, accordingly, sought for dismissal of the Appeal. 7. We have heard both the parties and perused the mater....
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....2(7) of Questionnaire dated. 03.07.2019 (PB P.no. 573). "Deductions claimed u/s 801A/801AB/80IAC/80IB/80IC/80IB A/80ID/80IE/10A/10AA by the assessee during the year is significantly more than the deduction claimed during preceding year?" The assessee has replied to the specific query of ld. AO vide point no 7 of submission dated 30.07.2019 (PB P.no 598) along with Form 3CEB (PB P.no 103-106) and details of Form 10CCBs. 8. Apart from the queries raised by the A.O. on the claim of deduction u/s 80IA of the Act, the same was subject to consideration before the Transfer Pricing Officer. It is found that the Ld. TPO has also called for various details duringthe TP proceedings for determination of Arm's Length Price ('ALP') of specified domestic transaction carried out by the eligible unit of the Assessee with the object of verifying the claim of deduction u/s 80IA of the Act. The said queries of the TPO has been replied by the Assessee by submitting the details by producing the copy of the agreements, Form 10CCBsof the each eligible unit, power accounts including balance sheet and profit and loss account of each eligible units. Considering the documents produced by the Assessee, tra....
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....y PB P.no 115) inquired: - The information documents asked b were already asked vide Point Ne Questionnaire 08.02.2021 (PB P Query No.8 Substantiate your claim R&D expenses as to what research has been carried out by you. Submit all the documents submitted by you to DSIR and the approval received from DSIR under Form 3CL. What products were launched subsequent to these researches? Where is your centre located and what all assets are deployed. Furnish the complete details of employees undertaking those researches with their complete bio-data. The AO raised queries in this Point No. 10 of C dated. 08.02.202 608). 10 "With respect expenditure c 35(2AB), kindly following: - a. Kindly details manufacture activity undertaken by company the year consideration. b. Details revenue and expenditure undertaken company house research development facility. C. Name, PA address of the party to whom p have been m d. Mode of with sup documentary evidence e. Details of TDS deducted thereof f. Copy of agreement with the prescribed authority. g. Copy of letter of approval from the prescribed authority Department of scientific and industrial research (DSIR) h. Copy of Form No. 3CM and 3CL ....
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....ther we have shown excise duty of Rs 3,28,47,85,792/-You may please recheck at your end and confirm." PCIT further vide Notice dated 23.02.2024 inquired vide query no. 12 You are requested to submit how much import/custom duty you have paid. As per your submissions you have paid excise duty amounting to Rs. 382.47 crores. Please confirm that no custom duty was imposed on you on imports made by you during the year. No. further query was raised by Ld. A.O. after receipt of such response. 12. From the above, it is found that it is not a case wherein the Assessing Officer failed to conduct enquiry rather it is the case wherein the Assessing Officer has conducted an elaborate enquiry and adopted one of the two views which was plausible view. The question would be as to whether in such circumstances the power u/s 263 of the Act would be invoked or not. The above said question is no longer res-integra and the said issue is well settled in several decisions. In the case of Malabar Industrial Co. Ltd. vs. Commissioner of Income Tax, (2000) 243 ITR 83 (SC). The Hon'ble Supreme Court held as follows :- "The phrase "prejudicial to the interests of the Revenue" has to be read in c....
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....IT [ [2024] 158 taxmann.com 64 (Dehradun - Trib.)] e) Ambuja Cements Ltd. Vs. CIT [2022] 140 taxmann.com 347 (Mumbai- Trib.) f) Tata AIA Life Insurance Company Ltd. Vs PCIT [2023] 147 taxmann.com 56 (Mumbai-Trib.) g) Reliable Educational Alliance Society vs Commissioner of Income-tax (Exemption) [[2023] 153 taxmann.com 341 (Delhi - Trib.)] h) Pawan Kumar vs PCIT [[2024] 159 taxmann.com 61 (Delhi - Trib.)] 14. On bare reading of the order of the Ld. PCIT, it has not been stated how the assessment order dated 21.06.2021 is erroneous and prejudicial is bad in law. Further, the Ld. PCIT has not conducted necessary enquiries or verification in order to come to conclusion that the finding given by AO is erroneous. The Ld. PCIT has failed to give reasoning that the view taken by the AO is unsustainable in law and has simply expressed the view that the AO should have conducted enquiry in a particular manner as desired by him. Such a course of action of the PCIT is not in accordance with the mandate of the provisions of sec. 263 of the Act. 15. The provisions of Section 263 of the Act can be invoked only in a case where cumulative twin conditions i.e. The assessment order sought t....