TaxTMI 
TaxTMI 
2026 (4) TMI 717
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....es, on which TDS was deducted. However, as per the return of income, legal and professional charges have been claimed at Rs. 3,27,75,797/-. He observed that, there is a difference to the tune of Rs. 2,17,96,049/- between the expenses incurred and the amount claimed in the return of income. Ld. PCIT was of the view that, the Assessing Officer has not sought any explanation to reconcile this difference. Similarly, he observed that assessee has paid salary to the extent of Rs. 11,55,18,514/- on which TDS was deducted. However as per the return of income, the salary was claimed at Rs. 20,93,51,160/-. Thus there is a difference of Rs. 9,38,32,646/-. No explanation was sought from the assessee to explain the same by the Assessing Officer. On the basis of above discrepancy, he came to the conclusion that the assessment order is prima facie erroneous in so far as it is pre-judicial to the interest of revenue. Accordingly, a show cause notice u/s 263 of the Act was sent to the assessee, and opportunity was given to the assessee to explain as to why the assessment order u/s 143(3) read with section 144B of the Act should not be set aside and a fresh assessment be directed. In the above said ....
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....e interest of revenue. 2. That on facts and circumstances of the case and in law, the PCIT erred in arbitrary holding that the assessment order passed under section 143(3) of the Act is erroneous and prejudicial to the interest of the revenue, without bringing on record as to how the twin conditions are getting satisfied in case of the Appellant. 3. That on facts and circumstances of the case and in law, the PCIT erred in assuming jurisdiction under section 263 of the Act by merely setting aside the assessment order passed by the Assessing Officer ("AO"): (1) especially when the issues were verified by the AO during the assessment proceedings, and (ii) by not bringing in the order under section 263 as to how the claim made by the Appellant was erroneous and prejudicial to the interest of the revenue. 4 That on facts and circumstances of the case and in law, the PCIT erred in invoking section 263 of the Act alleging that purported difference of INR 2,17,96,049 existed in the amount of legal & professional expenses incurred and legal & professional expenses claimed in return of income and thus was liable to be treated as unexplained expenditure, without app....
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....ubmitted that even though assessee had submitted detailed submissions before Ld. PCIT, however, Ld. PCIT has not given any findings on the discrepancy in the information submitted by the assessee. Therefore, Ld. PCIT has not given any clear finding how the assessment order is erroneous as well as pre-judicial to the interest of the revenue. In this regard he submitted as under:- a) It is submitted that for initiating revisionary proceedings under the provisions of section 263 of the Act, following two-fold conditions need to be satisfied, i.e., the order sought to be revised must be: (i) erroneous, and (ii) prejudicial to the interest of the revenue Assessment order not erroneous: b) At the outset, it is submitted that the Appellant's case was selected for complete scrutiny assessment, whereby, the AO had duly examined relevant material on record and passed assessment order dated September 06, 2022. c) However, the PCIT under the revisionary proceedings has arbitrarily sought to disregard the inquiry undertaken by the AO and submissions of the Appellant without elucidating any defect in deduction claimed under section 80JJAA....
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....he point of view of the Commissioner: - PCIT vs Asiatic Bearing Co.: [2025] 304 taxman 533/ITA No. 331 of 2024 (Gujarat) - PCIT vs. Ambika Co-Operative Credit Society Ltd.: [2025] 174 taxmann.com 532/ITA No. 171 of 2024 (Gujarat) - Shree Siddhi Infrabuild (P.) Ltd. vs. PCIT: [2025] 172 taxmann.com 232/SLP No. 5619 & 5621 of 2022 (Gujarat) - PCIT vs Sampark Management Consultancy LLP: [2025] 170 taxmann.com 49/ITA No. 78 of 2024 (Allahabad) - CIT vs. Genpact Consulting Singapore PTE Ltd.: [2024] 169 taxmann.com 441/ITA No. 103 of 2023 (Delhi) - PCIT vs Clix Finance India (P.) Ltd. [2024] 298 Taxman 217/ITA No. 1428 of 2018 (Delhi) - CIT vs Vikas Polymers: [2012] 341 ITR 537 (Delhi) - CIT vs Sunbeam Auto Ltd. [2011] 332 ITR 167 (Delhi) - Olympic Decor LLP vs. PCIT: [2025] 174 taxmann.com 972/ITA No. 423 of 2024 (Ahd - Trib.) - PCIT vs. Kutch District Co. Op. Milk Producers Union Ltd. [2025] 174 taxmann.com 868 (Gujarat) - HSBC Lifesciense Private limited vs PCIT: [2024] ITA No. 328 of 2023 (Ahd.- trib.) - Mahesh Reddy vs PCIT: [2024] 167 taxmann.com 297/ITA No. 13798936 of 2024....
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....sment is "erroneous" and "prejudicial to the interests of the revenue" on the point of disallowance of deduction under section 80JJAA of the Act. In the absence of any such specific finding, the allegation cannot be sustained. d) Support for this proposition is found in Surjit Singh vs PCIT [ITA No. 31 (Chd.) of 2021 (Chd-Trib.)], wherein the Tribunal held that when a particular issue is not addressed in the Commissioner's final findings under section 263, it is to be presumed that the Commissioner is no longer pursuing that issue. Consequently, an issue not supported by a finding in the 263 order cannot be invoked against the assessee. In view of the above, the order of the PCIT passed under section 263 of the Act is bad in law and deserves to be quashed. 10. On the other hand, Ld. DR submitted that as per the Explanation 2a to the Section 263 of the Act the assessment order passed without making enquiries or verification which should have been made specially deemed to be erroneous insofar as it is pre-judicial to the interest of the revenue. In this regard, he relied on the decision of Hon'ble Supreme Court in the case of Malabar Industries case and relie....