AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 846
X X X X Extracts X X X X
X X X X Extracts X X X X
....263 of the Act without appreciating the fact that order u/s 143(3) passed by the Ld. AO was neither erroneous nor prejudicial to interests of the Revenue and therefore the proceedings are bad in law. 2.0 That on the facts and in the circumstances of the case, the Ld. PCIT was not justified and grossly erred in holding that, the assessee has incurred on payment of interest on delayed payment of TDS to the tune of Rs. 92,01,623 without appreciating the fact that the same has been actual expense which was disallowed last year u/s 40(a)(ia) of the Act and claimed as allowance in captioned AY on payment of TDS, which was fully justified and in-line with the prevailing provisions of the law. 3.0 That on the facts and in the circumstances of the case, the Ld. PCIT was not justified and grossly erred in holding that, the assessee has incurred expense on payment of interest on TDS u/s. 201(1A) and 206C (7) without appreciating the fact that the expense was fully justified and in-line with the prevailing provisions of the law, which had been duly examined by the Ld. AO in assessment proceedings. 4.0 That, on the facts and in the circumstances of the case, the Ld. P....
X X X X Extracts X X X X
X X X X Extracts X X X X
....at, as per the amendment vide Finance Act 2009, section 80G registration were given perpetual validity. Further, the Ld. AO in the assessment proceedings has duly verified by making specific enquires on the above aspects." 4. Since the issues raised by way of additional ground are legal issues which can be decided on the basis of material available on record, the same are admitted in view of the ratio laid down by the Hon'ble Supreme Court in National Thermal Power Co. Ltd. vs. CIT, reported in (1998) 229 ITR 383 (SC). 5. The main grievance of the assessee, in the present appeal, is against the invocation of revisionary proceedings under section 263 of the Act by the learned PCIT. 6. The brief facts of the case as emanating from the record are: The assessee is engaged in producing dyed polyester yarn. For the year under consideration, the assessee filed its return of income on 02.02.2021, declaring a total income of Rs. 16,91,91,270/-. The return filed by the assessee was selected for complete scrutiny for the following reasons: a. Lower amount disallowed under section 40(a)(i) in ITR in comparison to default found under section 201 as per data received from CIT (....
X X X X Extracts X X X X
X X X X Extracts X X X X
....the tune of Rs. 9,54,000/- and had claimed 50% of the same as deduction u/s. 80G amounting to Rs. 4,77,000/-. The expenditure for which deduction is claimed is purely CSR expenditure on which 80G deduction is not allowable as: CSR expenditure by the assessee forms part of the mandatory requirement of the Companies Act 2013 and consequently not eligible for deduction us 80G of the IT Act. Allowing deduction under section 80G will result in subsidizing these expenses incurred by the corporate which is not the intent of the legislature. The main characteristic of charity is that it is purely voluntary and there is no legal obligation to make that contribution. The amounts spent on CSR activities, even though is contributed to the areas where 80G deduction is available, but the same lacks voluntary character and partakes the nature of an obligation to be fulfilled, a necessary requirement imposed by law in accordance with Section 135 of the Companies Act 2013. In view of the above, the assessee is not eligible for deduction u/s. 80G of the Income Tax Act, 1961 to the tune of Rs. 4,77,000/-. And the same needs to be disallowed and added back to the to....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ough various other submissions filed during assessment proceeding, following discrepancies are further noted: (i) There is purchase of foreign currencies by the assessee to the tune of Rs. 9.71 crores and the A.O has not carried out any enquiries and its implication on computation of total income. (ii) There is sale of immovable property being Daman factory land & buildings on 13/08/2019 whereas full depreciation is being claimed which included Rs. 80.05 lacs depreciation on machinery. No enquiries are found to have been done by the A.O during assessment proceedings. (iii) There is royalty payment of Rs. 5 crores to its own CFO of the assessee Company for patent lease which has also gone without enquiry during assessment as regards its allowability. (iv) Details of donation paid include Rs. 6 lacs donated to Vishwakarma Kaushal Kendra whose 80G certificate validity is for the period 09.07.2008 to 31.03.2010. This payment is thus not eligible for deduction u/s. 80G of the Act." Being aggrieved, the assessee is in appeal before us. 12. We have considered the submissions of both sides and perused the material on record. At the outset, it is ev....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ent year 2019-20, forming part of the paper book, submitted that the assessee made an addition of Rs. 1,75,01,997/- being the expenses on which TDS was not deducted while computing its total income. Furthermore, while referring to the computation of total income for the assessment year 2020-21, the learned AR submitted that during the year under consideration, the assessee claimed a deduction of expenditure amounting to Rs. 92,01,623/- on payment of TDS, on which TDS was not deducted in the last year. Thus, the learned AR submitted that the learned PCIT had incorrectly presumed such expenditure to be the interest on delayed payment of TDS, which, in fact, pertains to expenditure on which TDS was paid in this year and accordingly claimed as a deduction. 16. On the contrary, the learned Departmental Representative ("learned DR") submitted that the AO during the assessment proceedings neither raised any query on this issue nor sought any information/details from the assessee. Further, even in response to the notice issued under section 263 of the Act, the assessee chose not to file any submission/details. 17. Having considered the submission of both sides and perused the materia....
X X X X Extracts X X X X
X X X X Extracts X X X X
....on. 19. Having considered the submissions of both sides, we agree with the submissions of the learned DR that the issue whether the amount of Rs. 6,87,150/- payable as interest under section 201(1A)/section 206C(7) of the Act was not examined by the AO during the assessment proceedings and the details as referred to now, on behalf of the assessee, were not produced for verification before the AO. Accordingly, we are of the considered view that the learned PCIT rightly invoked the provisions of section 263 of the Act and directed the AO to modify the assessment order after conducting a necessary inquiry on this issue. Therefore, we uphold the impugned order passed by the learned PCIT under section 263 of the Act, limited to this issue. 20. The last issue on which notice under section 263 of the Act was issued by the learned PCIT pertains to the allowability of deduction under section 80G of the Act in respect of CSR expenses. The learned PCIT on the basis that the assessee has claimed deduction under section 80G of the Act to the tune of Rs. 4,77,000/- in respect of the expenditure incurred on CSR held that the assessment order is erroneous in so far as prejudicial to the inte....
X X X X Extracts X X X X
X X X X Extracts X X X X
....stage, it is relevant to note the following observations of the Hon'ble Bombay High Court in PCIT vs. Postal Gujarat Power Ltd, reported in (2019) 10 taxmann.com 418 (Bom):- "9. The Revenue may be correct in contending that, the Assessing Officer had not carried out detailed enquiries with respect to this claim of assessee. However, this by itself would not be sufficient to enable the Commissioner to exercise revisional power. In a given case, as in the present one, if the answer to the legal issue can be had on the basis of the material already on record, there would be no useful purpose in asking the Assessing Officer to carry out the same exercise and come to the same conclusion as the Tribunal in the present case has. In this context, we do not accept the contention of the Counsel for the Revenue that, answer in law had to come from the Assessing Officer and not the Tribunal. He had argued that even if the Tribunal was right in law, since the Assessing Officer had not come to the said conclusion, the order of the Commissioner should not be disturbed. In our opinion, if the Tribunal has come to the correct conclusions in law and said conclusions are based on materia....