TaxTMI 
TaxTMI 
2026 (2) TMI 1359
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....of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') on 31.03.2022 in response to which the assessee filed its return of income on 22.04.2022 declaring total income at Nil and after claiming deduction u/s 80P under the Part-C of Chapter VI-A amounting to Rs. 8,40,004/-. The Assessing Officer completed the assessment u/s 147 r.w.s. 144B of the Act accepting the returned income. 3. Subsequently the Ld. PCIT examined the records and observed certain discrepancies in the assessment order which according to him appeared to be prejudicial to the interest of the Revenue. He, therefore, issued a show cause notice u/s 263 of the Act asking the assessee to explain as to why the return filed by the assessee should not be revised. The contents of the notice issued u/s 263 of the Act read as under: "Please refer to the order passed us 147 r.w.s. 1448 of the IT Act for the A. Y. 2018-19 dated 13/03/2023 in your case. Based on the information available with the Department, it is seen that the assessee had made cash deposit in its bank account during the F. Y. 2017-18 to the tune of Rs. 61,19,654/- however the assessee did not file its return of income u/s 139(1)....
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....roposed to be revised. 4. In this connection, you are given opportunity of being heard by the undersigned. The attendance on the date of hearing is not insisted, you may furnish the reply through e-portal on or before 18/03/2025. Necessary documentary evidences, wherever required, may also be submitted. Please note that in case your reply is not received by the given date, the proceedings will be completed on the basis of material available on record. 5. Timely compliance to the notice will be appreciated considering the limitation of time." 4. However, despite number of opportunities granted by the Ld. PCIT the assessee did not respond for which the Ld. PCIT decided the issue on the basis of material available on record. He noticed that the assessee has made cash deposit of Rs. 61,19,654/- and thus the gross receipts of the assessee exceeded the maximum amount not chargeable to income tax during the assessment year 2018-19. The assessee was obligated to furnish return of income u/s 139(1) of the Act. However, he failed to file its return of income within the prescribed due date nor did it file the return within the extended period allowed u/s 139(4) of the Act....
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...., the PCIT is correct in invoking provision under Section 263 for disallowance of deduction under section 80P, without appreciating that compliance under section 80AC is not mandatory and it is discretionary and further, by implication, AO had accepted one of the views in case of debatable issue. 3. The assessee craves leave to amend, alter or delete any of the above grounds of appeal. 4. It is prayed that the above claims and allowances be allowed. 7. None appeared on behalf of the assessee but the assessee has filed its written submission with a request to consider the same. It has been mentioned in the written submission that the issue of cash deposit was examined by the Assessing Officer during the course of assessment proceedings and in the assessment order in para 3.4 at page 3, the Assessing Officer has stated that no variation is proposed on the issue of cash deposit by the assessee society in its bank. It has been mentioned that the Assessing Officer has exhausted his jurisdiction as soon as he was satisfied that the cash deposit of Rs. 61,19,654/- in the bank account of the assessee for which the case of the assessee was reopened under the provisions ....
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.... Gram Sewa Sahakari Samiti Litd. Vs. ITO vide ITA No.1116/JP/2024 order dated 08.01.2025 for assessment year 2015-16 iii) Jaspreet Singh Sidhu vs. PCIT vide ITA No.335/CHD/2024 order dated 18.09.2024 for assessment year 2016-17 iv) Ashok Kumar vs. PCIT (2024) 207 ITD 583 (Delhi - Trib.) v) Sipura Developers (P.) Ltd. Vs. PCIT (2024) 168 taxmann.com 543 (Del) vi) Aishwarya Rai Bachchan vs. PCIT (2022) 194 ITD 272 (Mumbai-Trib.) 13. The Ld. DR on the other hand has also filed a detailed written submission. He submitted that reliance of the assessee on the decision of Hon'ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. (supra) is mis-placed. In that case, the Hon'ble Bombay High Court has held that if the original reason for reopening u/s 147 fails, the Assessing Officer cannot make additions on other issues which were not part of the recorded reasons. This ruling is strictly confined to (a) re-assessment proceedings u/s 147 / 148 (b) the jurisdictional validity of reopening. The Hon'ble High Court has not dealt with the provisions of section 263, changes in law by retrospective or clarificatory amendments, eligibility condition....
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....s raised by the assessee be dismissed. 16. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. PCIT and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. It is an admitted fact that the assessee has not filed its return of income but had made cash deposit of Rs. 61,19,654/- in the bank account for which the case of the assessee was reopened and notice u/s 148 of the Act was issued to the assessee. We find when the assessee filed return of income the Assessing Officer in the order passed u/s 147 r.w.s. 144B of the Act has accepted the returned income wherein he allowed the claim of deduction u/s 80P of the Act to the tune of Rs. 8,40,004/- despite the fact that the assessee is a non-filer for assessment year 2008-09 and has not filed its return of income for the said assessment year within the prescribed time limit u/s 139(1) of the Act and therefore, in view of the provisions of section 80AC w.e.f. 01.04.2018 and the CBDT Circular No.8/2018, dated 26.12.2018 the assessee is not entitled to claim the deduction u/s 80P of the Act. It is the submission of the Ld. C....
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....llowance as referred to in sections 32 and 32A respectively, the Commissioner was justified in invoking revision under section 263 of the Act. The relevant observations of Hon'ble High Court from para 10 to 16 read as under: "10. The law on exercise of jurisdiction under Section 263 of the Act is settled by the decision of the Apex Court in the case of Malabar Industrial Co. Ltd. v. CTT [2000] 243 ITR 83/109 Taxman 66 wherein it has recorded that power of revision under Section 263 of the Art can be exercised only on satisfaction of twin conditions namely the order of the Assessing Officer must be erroneous, and also prejudicial to the interest of the revenue. The Court further observed that where a claim made by the assessee is allowed by the Assessing Officer without having made any enquiry, then the order of the Assessing Officer to the extent it allowed such a claim is erroneous in law. The Apex Court also recorded the fact that where two views are possible, and the Assessing Officer has taken one possible view, then even if the CIT does not agree with the view, it would not give him the jurisdiction to exercise jurisdiction under Section 263 of the Act. 11. I....
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....there was an inquiry made before allowing the claim of deduction under Section 80HHC of the Act at Rs. 92.81 lakhs. This inference is not justified. Mere using the word "allowed" does not mean examination and enquiry before allowing deduction under Section 80HHC of the Act. The words "due verification" would include within its ambit not only inadequate Inquiry/verification but also no enquiry/verification. However, in case the respondent-assessee was of the view that the claim has been examined by the Assessing Officer before allowing it, then respondent-assessee ought to have the statement of case modified/amended so as to bring the aforesaid facts on record, as held by the Apex Court in the case of Calcutta Agency Ltd. (supra). This not being done and now to draw far fetched inference cannot be accepted. It is now settled in view of Malabar Industries (supra) that non-enquiry before allowing the claim would make the order of the Assessing Officer amenable to jurisdiction under Section 263 of the Act. The non-enquiry by the Assessing Officer gives jurisdiction under Section 263 of the Act. Merely because the issue is debatable, it does not absolve the Assessing Officer from examin....
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....on 263 of the Act on 31.03.1995, the decision of the Tribunal in Mysore Exports Ltd (supra) was not available before him as it was rendered on 19.05.1995. 16. Therefore, we are of the view that the Assessing Officer cannot abdicate his responsibility of examining the claim for deduction before allowing it. Absence of examination of the claim made by the assessee while passing an assessment order and allowing the claim made, would render the order of the Assessing Officer erroneous and coupled with the fact that in this case it is admitting prejudicial to the interest of the revenue, exercise of the revisional jurisdiction under Section 263 of the Act by the Commissioner of Income Tax proper and valid." 20. So far as the decision of Hon'ble Bombay High Court in the case of CIT vs. Jet Airways (I) Ltd. (supra) is concerned, we find the said decision is not applicable to the facts of the present case. In that case the ruling was confined to re-assessment proceedings u/s 147 / 148 and the jurisdictional validity of reopening. The Hon'ble High Court has not dealt with revisional jurisdiction u/s 263, changes in law by retrospective or clarificatory amendments, eligibility co....