TaxTMI 
TaxTMI 
2025 (9) TMI 1574
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....om investments held with Cooperative Banks and secondly regarding the allowing of provisioning of expenses at Rs. 13,70,000/- during the assessment proceedings. 3. Brief facts of the case are that the assessee is a Cooperative Society and return for A.Y. 2020-21 filed on 25.12.2021 declaring Nil income. Ld. Assessing Officer (AO) initiated the assessment proceedings u/s. 143(3) of the Act by issuing valid notices u/s. 143(2) and 142(1) of the Act. Various details called for including those relating to claiming deduction under Chapter VIA. After examining the details filed by the assessee, ld. AO assessed the income at Nil. 4. Thereafter, ld. PCIT called for the assessment records and observed that even though the assessee is not eligible for deduction u/s. 80P(2)(d) of the Act at Rs. 45,75,176/-, ld. AO has allowed the claim and secondly he observed that provisioning of expenses at Rs. 13,70,000/- have also been allowed during the assessment proceedings thus making the assessment order erroneous and prejudicial to the interest of Revenue. Ld. PCIT issued show cause notice u/s. 263 of the Act on 30.01.2025 calling for the submission of details by 07.02.2025 to which necessary ....
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.... 7. So far as the allowability of provisioning of expenses at Rs. 13,70,000/- he submitted that the said amount has already been disallowed in the computation of income and is part of the total disallowance offered in the income-tax computation at Rs. 17,56,526/-. He further submitted that even after adding/disallowing of the provisioning of expenses, the increased amount is eligible for deduction u/s. 80P of the Act for the activity carried out by the assessee society. 8. Ld. DR on the other hand supported the order of ld. PCIT. 9. We have heard the rival contentions and perused the record placed before us. In the instant case, ld. PCIT has assumed jurisdiction u/s. 263 of the Act for the two issues namely allowability of deduction u/s. 80P of the Act at Rs. 45,75,176/- and allowing of provisioning of expenses at Rs. 13,70,000/-. 10. We find that the provision of Section 263 of the Act has direct bearing on the issue raised before us, therefore, it is pertinent to take note of this section which reads as under: "263(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the ....
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...., the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded." 11. On a bare perusal of the sub section-1 would reveal that powers of revision granted by section 263 to the learned Commissioner have four compartments. In the first place, the learned Commissioner may call for and examine the records of any proceedings under this Act. For calling of the record and examination, the learned Commissioner was not required to show any reason. It is a part of his administrative control to call for the records and examine them. The second feature would come when he will judge an order passed by an Assessing Officer on culmination of any proceedings or during the pendency of those proceedings. On an analysis of the record and of the order passed by the Assessing Officer, he formed an opinion that such an order is erroneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The lear....
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....s and prejudicial to the interests of the revenue - RampyariDevi Saraogi v. CIT [1968] 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC). [Emphasis Supplied]" 13. Now examining the facts of the case in light of the settled judicial precedents and the provisions of section 263 of the Act, we firstly find that specific query was raised by the AO regarding the claim of deduction under Chapter VIA and the same has been complied by the assessee which has been duly mentioned in the assessment order also. Secondly, regarding the disallowance of provisioning of expenses at Rs. 13,70,000/- we note that the assessee has added back the provisioning of expenses to the net profit which are part of the total disallowance at Rs. 17,56,526/- and the same was very much available before the AO and after necessary verification has accepted the claim. Therefore, since both the issues have already been examined by the AO, ld. PCIT failed to assume jurisdiction u/s. 263 of the Act. 14. Even otherwise on merits of the case, deduction u/s. 80P of the Act for the interest income earned from investments held with Cooperative Banks at Rs. 45,75,176/-, issue has come up for adj....