TaxTMI 
TaxTMI 
2025 (3) TMI 1337
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....mstances of the case and in law, the Id. Pr. CIT grossly erred 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 ....
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.... 501/-, disallowed Rs. 20,50,000/- u/s 14A of the Act, made addition of Rs. 1,12,63,690/- u/s 50C of the Act and also made addition 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 under....
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....d the assessment order after making certain additions and disallowances. The Ld. Assessee's Representative made elaborate submission and contended that the Ld. 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 ....
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....A 10AA in comparison to preceding year. The AO has not made any effort to verify the genuineness of claims made by the assessee and has accepted submissions assessee. The AO had raised specific query vide Point No. 32(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 b....
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....he assessee. The AO should have investigated whether the assessee is entitled for such deductions or not. The claim of the assessee has been accepted by the AO without any enquiry. PCIT further vide Notice dated 23.02.2024, (Supplementary 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 doc....
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.... CBEC).?" In reply to the query of the Id.AO, the assessee had responded vide point no 17 of its letter dated 30.07.2019 (PB P.no 603) as follows: -"As regards your observation regarding custom duty shown in Part A - P&L of ITR, kindly note that no custom duty is shown in P&L A/c and rather 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....
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....ay High court in the case of CIT vs. Development Bank [2010] 323 ITR 206/[2011] 196 Taxman 329. b) Hon'ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd. [2011] 332 ITR 167/[2010] 189 Taxman 436. c) CIT vs. Gabrial India Ltd. [1993] 114 CTR (Bom) 81 [1993] 203 ITR 108 (Bom) d) Smt. Omwati vs PCIT [ [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 si....