TaxTMI 
TaxTMI 
2025 (9) TMI 1630
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.... and the assessment was completed under Section 143(3) r.w.s. 144B of the Act on 06.09.2022 at total income of Rs. 11,66,84,640/-. Subsequently, the Ld. PCIT had examined the case records and found that the Assessing Officer did not make addition in respect of the following amounts as reported in Form 3CD: 1) VAT of Rs. 84,12,642/- not paid during the year, which was disallowable under Section 43B of the Act. 2) Employee's contribution of Provident Fund not paid within the due date Rs. 10,65,599/-, which was to be considered as income under Section 2(24)(x) of the Act. 2.1 Therefore, the Ld. PCIT had held that the order of the Assessing Officer was erroneous and prejudicial to the interest of revenue and vide the impugned order he had set aside the assessment order of the Assessing Officer with a direction to pass fresh order, after duly examining the facts. 3. Aggrieved with the order of the Ld. PCIT, the assessee is in appeal before us. The following grounds have been taken in this appeal: - "1. On the facts and in the circumstances of the case as well in law, the Ld PCIT Ahmedabad 1 ("Ld. PCIT") has erred in law and on facts in exercising jurisdi....
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....h merged assessment order under the provision of section 263 of the Act. The Ld. AR further submitted that the issue of belated payment of employee's contribution of PF had attained finality as the assessee was not in appeal before the ITAT against this adjustment made while processing the return and to that extent there was no error, which remained to be rectified. On the second issue of VAT, the Ld. AR submitted that the assessee had preferred appeal before the Tribunal on this issue which was decided vide order dated 12.10.2024 and the matter was sent back to the Assessing Officer for verification. Therefore, this issue also did not require any revision under Section 263 of the Act. The Ld. AR assailed the order of Ld. PCIT on the ground that his remanding back the matter to the Assessing Officer for verification was also not correct. In this regard, he relied on the decision of the Co-ordinate Bench of this Tribunal in the case of Comtrade Commodities Services Limited vs. PCIT, [156 taxmann.com 369]. He further submitted that in the order u/s 263 of the Act, the matter can't be set aside for verification as held by the Co-ordinate Bench of this Tribunal in the case of E-Infochi....
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....able under the provisions of the Act by the Auditor, were added to income. Therefore, the order passed by the Assessing Officer was certainly erroneous and prejudicial to the interest of the revenue. The Explanation to section 263 of the Act stipulates that if the order is passed without making enquiries or verifications which should have been made by the Assessing Officer, the order shall be deemed to be erroneous and prejudicial to the interest of revenue. Since the Assessing Officer did not make any enquiry or verification in respect of unpaid VAT and belated payment of P.F. & ESI, as reported in the Tax Audit Report, the order of the Assessing Officer was certainly erroneous and prejudicial to the interest of revenue. 6.1 The contention of the assessee that the Ld. PCIT could not have revised the order of the Assessing Officer as it had already merged with the order of the Ld. CIT(A), is found to be misplaced. It is found that the adjustment for unpaid VAT and belated payment of P.F. & ESI and certain other additions were made while processing the return u/s 143(1)(a) of the Act. The proceeding under Section 143(3) of the Act is an altogether separate proceeding. The assesse....
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....under Section 263 of the Act cannot be exercised for verification of the issue. There has to be a finding of error causing prejudice to the Revenue, by the ld. Pr. CIT, for valid exercise of revisionary power under Section 263 of the Act. Verification precedes finding of the error. Therefore, any direction for verification of the claim u/s. 263 of the Act is not in consonance with the requirement of law. Accordingly, the ld. Pr. CIT's order, directing verification of claim of carry forward of current year's business loss is also set aside." [Emphasis supplied.] 6.4 It is evident from above that in that case no finding was given by the Ld. PCIT that the order of the Assessing Officer was erroneous and prejudicial to the interest of revenue and the matter was remanded for verification of the claim of the assessee. It was held in that case that only after an error is found in the order of the AO, the verification can be directed and that there can be no verification without finding of an error. In the present case, however, the Ld. PCIT had given a categorical finding that the order of the Assessing Officer was erroneous and prejudicial to the interest of revenue. Considering the f....