TaxTMI 
TaxTMI 
TaxTMI 
2025 (11) TMI 28
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.... 1.1 On the facts and in the circumstances of the case and in law, the learned Principal Commissioner of Income Tax-6 ('PCIT') erred in assuming jurisdiction, and thereby erred in initiating, continuing and concluding the proceedings under section 263 of the Income-tax Act, 1961 ('the Act') The Appellant prays that the order passed by the PCIT, initiating revisionary proceedings under section 263 of the Act be held as void and liable to be quashed, and that the assessment order dated 19 July 2022 passed by the assessing officer under section 143(3) read with section 1440(13) of the Act be restored as not being erroneous or prejudicial to the interests of revenue. Without prejudice to Ground no 1 - Ground No. 2: Denial of deduction under Chapter VI A under section 80G of the Act 2.1. On the facts and in the circumstances of the case and in law, the learned PCTT erred in holding that deduction claimed under section 80G of the Act was erroneously allowed in the assessment order and disregarding the fact that the said amount is deductible in accordance with the law The Appellant prays that the learned AO be directed to allow....
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....under the head 'ESOP expenditure-Ind AS adjustment' which was added back in the computation of total income. However, it claimed deduction of Rs. 9,22,27,077/- out of the said expenses u/s.37(1). 4. As mentioned in para 2 of the impugned revisionary order, ld. PCIT from the perusal of the records noted that there were objections raised by the Revenue audit based on which took up the matter for revision on the above stated two issues by issuance of show-cause notice dated 30.01.2024 u/s.263. Before the ld. PCIT, assessee reiterated its submissions which were made in the original assessment proceedings, corroborated by documentary evidences. It also submitted that both the issues are squarely covered by the decision of the Co-ordinate Bench in assessee's own case for immediately preceding year i.e. A.Y.2017-18 in ITA No. 2645/Mum/2024, dated 29.07.2024. Ld. PCIT took note of the submissions made by the assessee in para 8 of the impugned order. He also took note of the decisions of the Co-ordinate Bench (supra) whereby, the revision u/s.263 was set aside on both the issues which are raised in the present appeal. 5. We note that he has expressed his disagreement with ....
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.... 14A (As per TAR) 77,052 Corporate Social Responsibility 16,72,37,651 Amount of Interest paid to Micro, Small and Medium Enterprises (As per Sec 23 of MSMED) 29,43,000 Expenses allocable to Income from House Property 4,09,562 Municipal Tax allocable to Income from House Property 11,70,880 Income under section 41(3) - Sale of RTC asset 30,502 Employee Stock Option debited to P&L - IND AS adjustment 9,41,63,548 Disallowance under section Sec 40(a) (as per TAR) 35,92,56,632 Disallowance under section Sec 43B (as per TAR) 5,87,47,640 Amortisation of Prepaid Expenses for Security Deposited (INDAS) 1,75,82,362 Loss on sale of Fixed Assets 16,58,981 Provision for Doubtful Debt 15,30,330 Gratuity + Pension benefits considered in Comprehensive Income 1,64,59,336 Disallowance us 40A(3) 38,372 Pe....
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....D TO 9,92,46,65,071 Tax @ 30% on Other than Capital Gain 2,97,73,99,521 Tax @ 20% on Capital Gain - 2,97,73,99,521 Surcharge @ 12% 35,72,87,943 Education CESS @ 3% 10,00,40,624 Total tax payable including surcharge 3,43,47,28,088 Tax payable u/s. 115JB - MAT 2,09,68,56,443 Higher of the two 3,43,47,28,088 Less: MAT credit Net tax liability 3,43,47,28,088 Less: Credit u/s 91 Less: Tax Deducted Source 2,72,18,632 Balance Payable 3,40,75,09,456 Less: Advance Tax paid June 15, 2017 40,00,00,000 Sept 15, 2017 1,00,02,00,000 Dec 14, 2017 1,02,00,00,000 Mar 15, 2018 90,80,00,000 Balance payable/(Refundable) 8,74,99,310 3,....
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.... TAX COMPUTATION FOR THE YEAR ENDED MARCH 31,2017 Net Profit before tax as per P&L 8,514,292,799 ADD: DISALLOWANCES Donation 165,200 Depreciation/Amortisation as per books 1,332,427,842 Disallowance under section 14A (As per TAR) 145,150 Corporate Social Responsibility 155,806,642 Amount of Interest paid to Micro, Small and Medium Enterprises (As per Sec 23 of MSMED) 2,897,173 Expenses allocable to Income from House Property 359,109 Municipal Tax allocable to Income from House Property 1,170,880 Income under section 41(3) - Sale of RTC asset 55,556 Employee Stock Option debited to P&L - IND AS adjustment 88,569,795 Disallowance under section Sec 40 (a) (as per TAR) 113,008,030 Disallowance under section Sec 43B(as per TAR) 32,337,902 Amortisation of Prepaid Expenses for Security Deposit (INDAS) 16,298,560 ....
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....; Section 80G(2) -Donations 15,042,600 Section 80JJAA - Workmen 7,667,132 22,709,732 TOTAL INCOME 7,676,625,145 ROUNDED TO 7,676,625,140 Tax @ 30% on Other than Capital Gain 2,302,987,542 Tax @ 20% on Capial Gain - Surcharge @ 12% 276,358,505 Education CESS @ 3% 77,380,381 Total tax payable including surcharge 2,656,726,428 Tax payable u/s 115JB -MAT 1,792,136,224 Higher of the two 2,656,726,428 Less: MAT credit Net tax liability 2,656,726,428 Less: Credit u/s 91 Less: Tax Deducted Source 27,414,267 Balance Payable 2,629,312,161 Less : Advance Tax paid June 15,2016 350,000,000 Sept 15,2016 850,000,000 ....
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....2021, the assessee filed a detailed reply which is exhibited at pages 126 to 131 of the paper book supported with documentary evidence placed at pages 132 to 136 of the paper book. The relevant part is extracted for ready reference :- 2) In relation to Chapter VIA deduction payment details, we have claimed deduction under section 80G of the Act and we have attached herewith bank statements at Annexure 3 highlighting major payments. Name of Donee NR Eligible INR Network In Thane By People 1,535,200 50% 767,600 Water For People India Trust 13,000,000 50% 6,500,000 Pratham Mumbai Education 1,000,000 50% 500,000 Seva Mandir 8,000,000 50% 4,000,000 Action Aid Association 50,000 50% 25,000 Social Empowerment And Economic Devel 6,500,000 50% 3,250,000 Grand Total 30,085,200 15,042,600 5) In relation to "Any Other Amount Allowable as deduction" we had already provided a break up in our submission dated March 5,2021. We further submit the brief explanation at Annexure 13 and supporting attached from Exhibit 1 to 4." Sr No. Particulars Amount in INR 1 244A I....
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.... not reduced from Profit Before Tax amount in the financials. 79,067,369 7 VRS deduction u/s 35DDA of the Act - 1/5th of the amount being 2nd year of deduction. We had incurred INR 29.26 crore expenses which is allowable under section 35DDA of the Income tax Act to be claimed over a period of 5 years. Attaching VRS scheme for your reference at Exhibit 4. 58,510,841 Add: Amount allowed in computation of Income - (A) 8 As per IND AS the Company has fair valued these security deposits. Difference between the fair value and transaction value of the security deposit has been recognized as prepaid expense. Since it is notional and debited to P&L it is disallowed 16,298,560 9 Employee Stock Option debited to P&L - Under Ind AS, the cost of equity shares is recognised based on the fair value. 88,569,795 Less: Amount disallowed /added back in computation of income- (B) 104,868,355 Net Amount allowed as deduction in ITR ( A - B ) 203,366,118 8.3. Page 120 of the paper book is the copy of the e-mail sent along with annexures. All these evidences go on to show the level of enquiry made by the AO at th....
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....he assessment proceedings, we are of the opinion that the AO has examined each and every issue thoroughly with vortex of evidence. Therefore, it would be unjust if the PCIT says that the impugned assessment order was erroneous and prejudicial to the interest of the revenue because of non-enquiry on part of the AO. 12. While coming to the aforementioned conclusion, we draw support from the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd., 243 ITR 83 (SC), where the Hon'ble Supreme Court has laid down the following ratio :- "A bare reading of section 263 of the Income-tax Act, 1961, makes it clear that the prerequisite for the exercise of jurisdiction by the Commissioner suo moto under it, is that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent -- if the order of the Income-tax Officer is erroneous but is not prejudicial to the Revenue or if i....
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....nt to giving unbridled and arbitrary power to the revising authority to initiate proceedings for revision in every case and start re-examination and fresh enquiries in matters which have already been concluded under the law. As already stated it is a quasi judicial power hedged in with limitation and has to be exercised subject to the same and within its scope and ambit. So far as calling for the records and examining the same is concerned, undoubtedly, it is an administrative act, but on examination "to consider" or in other words, to form an opinion that the particular order is erroneous in so far as it is prejudicial to the interests of the Revenue, is a quasi-judicial act because on this consideration or opinion the whole machinery of re-examination and reconsideration of an order of assessment, which has already been concluded and controversy which has been set at rest, is set again in motion. It is an important decision and the same cannot be based on the whims or caprice of the revising authority. There must be materials available from the records called for by the Commissioner. 14. We may now examine the facts of the present case in the light of the powers of the C....
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....igh Court in the case of Russell Properties (P.) Ltd. v. A. Chowdhury, Addl. CIT [1977] 109 ITR 229 at 243. 2. At this stage we may clarify that under para 10 of the judgment in the case of Malabar Industrial Co. Ltd. (supra) this Court has taken the view that the phrase "prejudicial to the interest of the revenue" under section 263 has to be read in conjunction with the expression "erroneous" order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the revenue. For example, when the Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue, unless the view taken by the Income-tax Officer is unsustainable in law. According to the learned Additional Solicitor General on interpretation of the provision of section 80HHC(3) as it then stood the view taken by the Assessing Officer was unsustainable in law and therefore ....
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....ubmit your representation, if any alongwith supporting documents/information in support of the issues involved (as mentioned below). If you wish that the Revision proceeding be concluded on the basis of your written submissions/representations filed in this office, on or before the said due date, then your personal attendance is not required. You also have the option to file your submission from the e-filing portal using the link: incometaxindiaefiling.gov.in 1. You have filed the return of income for AY 2017-18 on 29.11.2017 declaring a total income of Rs. 767,66,25,140/ -. The assessment was completed u/s 143(3) rws 144C(13) on 17.02.2022 determining the total income at Rs. 1329,94,00,950/ -. 2. On perusal of assessment order u/s.143(3) rws 144C(13) dated 17.02.2022, it is observed that the order is erroneous and prejudicial to the interest of revenue for the following reasons: 2.1 On verification of the records, it is seen from the P & L A/c and Computation of Income, that you have incurred expenses of Rs. 15,58,06,642/- and Rs. 1,65,200/- towards CSR expenses and "Donation", which have been added back in the computation of income as disallowable. It is further seen tha....