TaxTMI 
TaxTMI 
2026 (7) TMI 962
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....gned assessment proceeding the assessee filed the return u/sec. 139(1) of the Act of 28.11.2018 by declaring total income of Rs. 1093,44,26,340/- under the normal provision of the Act and Rs. 1737,48,46,739/- as book profit under provision of section 115JB of the Act. The assessee's case was selected for scrutiny assessment and the Ld. AO had dealt with the following issues which are considered in impugned assessment order passed under Section 143(3) r.w.s. 144C(3) r.w.s. 144B of, date of order 18.11.2021. The reasons for complete scrutiny noted in assessment order are reproduced as below: "1. The case was selected for Complete Scrutiny assessment under the E-assessment Scheme, 2019 on the following issues:- S. No. Issues i. Claim of Any Other Amount Allowable as Deduction in Schedule BP ii. Stock Valuation iii. Double Taxation Relief u/s 90/91 iv. International Related Party Transactions in Services v. Duty Drawback vi. Refund Claim vii. ICDS Compliance and Adjustment viii Foreign Financial InterestS. No. viii. Deduction Claimed for Industrial Undertaking u/s 80IA/80IAB/80IAC/IB/IC/IBA/80ID/80IE/10A/10AA X. ....
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....ines. b) Short disallowance u/s. 14A and c) Wrong claim of CSR u/s. 80G. FAO was intimated by this office on 20.02.2023 to take necessary action on these issues. However, these issues were not examined at all by the FAO. However, Order u/s. 147 r.w.s. 144B was passed on 29.02.2024 on the returned income of Rs. 1268,40,12,110/- without taking remedial action against the audit objections as pointed out by this office. 2. In view of the above, notice for hearing u/s. 263 was issued on 20.02.2025 requesting the assessee to show cause as to why the order u/s. 143(3) r.w.s. 144 of the Income Tax Act, 1961 should not be revised as it was erroneous and prejudicial to the interest of revenue. Further, on change of incumbent, fresh notice of hearing was given to assessee on 18.08.2025 In this regard, assessee has submitted reply vide submission dated 25.08.2025. The submission of the assessee and finding and directions are discussed in the following paras." 5. In compliance with the notice issued under Section 263 of the Act, the assessee furnished the requisite explanations and supporting evidence. However, the Ld. PCIT, by exercising the revi....
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....s in view of Hon'ble SC Judgment in the case of (Apex Laboratories[(2022) 442 ITR 1 SC)] 9 Submission in response to notice u/s148 of the Act (Refer to page No.180 to 305 of the FPB) 24 May 2022 - 10 Audit objections raised by Revenue Audit Party (RAP) on the Assessment order dated 18^th November 2021 12 May 2022 Issues * Gift to doctors in violation to MCI guidelines * Short computation of disallowance u/s14A; * Wrong claim of CSR claim u/s80G of the Act 11 Intimation to FAO by the office of PCIT to take necessary action basis the audit report 20 Feb 2023 - 12 Reassessment order passed u/s147 of the Act(Refer to page no.21 to 31 of the Appeal set) 29 February 2024 No variation proposed as the issue raised in the reassessment notice with respect to alleged bogus purchase issue already disallowed in return of income filed u/sec. 148 of the Act (as part of Sales Promotion Expenses) 13 Date of receipt of show-cause u/s 263 of the Act for revision of reassessment order passed u/s 147 of the Act (Refer Page Nos. 309 to 313 of the FPB) 20 February 2025 - 14 Response filed in response to show-....
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....tion to MCI guidelines * Short disallowance u/s 14A * Wrong claim of CSR u/s 80G of the Act 19. The Id. PCIT has initiated the revisionary proceedings u/s 263 of the Act in respect of the reassessment order passed under section 143(3) r.w.s 147 of the Act dated 29 February 2024. The reassessment proceedings were initiated vide notice u/s 148 dated 20 April 2022 in relation to allegation of accepting bogus bills for purchases from Shree Ram Enterprises. However, as the Appellant in the return of income filed in response to notice u/s 148 dated 18 May 2022, suo-moto disallowed sales promotion expenses amounting to Rs. 124.21 crores following Hon'ble SC judgement in the case of Apex Laboratories ((2022) 442 ITR 1(SC)] which subsumed alleged bogus purchase from Shree Ram Enterprises, no separate addition was made in course of reassessment proceedings on the bogus purchase issue. 20. Accordingly, it is submitted that the Id PCIT has initiated the revisionary proceedings under section 263 of the Act against the reassessment order passed under section 143(3) r.w.s 147 of the Act dated 29 February 2024, without applying his mind and not understanding....
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....Calcutta High Court [[2025] 176 taxmann.com 470 (Calcutta HC)] (Refer Page Nos. 510 to 515 of the legal paperbook) * Rajesh Kumar Jalan (2024) (208 ITD 349) (Kol. Trib.) * AhlconParenterals (India) Ltd. (ITA No. 769/Del/2021) dated 21 May 2024 (Refer Page Nos. 516 to 519 of the legal paperbook) * Refex Industries Ltd. (ITA No. 972/Mds/2014) dated 9 September 2014 (Refer Page Nos. 520 to 532 of the legal paperbook) The proceedings initiated under section 263 of the Act are barred by limitation as the period of limitation for initiation of 263 proceedings on issues unrelated with the reassessment proceedings has to be seen from the date of original assessment order 24. Further, the Appellant wishes to draw your Honour's attention to provisions of Section 263(2) of the Act, which states that no order of revision can be passed by the Hon'ble Commissioner after expiry of two years from the end of financial year in which the order sought to be revised was passed. The relevant extracts of the said section is reproduced below for your Honours reference: 263.(1) The Principal Chief Commissioner or Chief Commissioner or Principal ....
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.... made during the reassessment proceedings only the said issue pertaining to purchases from "Shree Ram enterprises were discussed. 27. Accordingly, it is humbly submitted that since, the reassessment proceedings were on the sole issue of alleged bogus purchases from "Shree Ram Enterprises and the issues being agitated in the present 263 proceedings pertaining to sales promotion expenses or 14A disallowance or deduction claimed under section 80G of the Act on CSR Expenses (which were part of and were not issue in dispute during the reassessment proceedings), hence, the period of questions and enquiries made during original assessment proceedings u/s 143(3) r.w.s 144C limitation for initiation of proceedings under section 263 of the Act should be determined from the date of original order under Section 143(3) of the Act and not from the date of reassessment order under Section 147 of the Act. 28. In the present case, the time period available for initiating revision proceedings under section 263 of the Act i.e. 2 years from the end of the year in which original assessment order u/s 143(3) of the Act (dated 18 November 2021), expired on 31 March 2024. 29. It ....
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....imitation of exercising powers under section 263 of the Act would be the date of original assessment order issued under section 143(3) of the Act Decision of Hon'ble Supreme Court in case of Alagendran Finance Ltd. [2007] 211 CTR 69 (SC)] dated 27 July 2007(Copy enclosed at page 341 to 347 of the legal paper-book) has held as under: "6. We have carefully gone through the record and considered the rival submissions. In our view, the contentions of the Appellant deserve to succeed. The facts of the case clearly show the claim of lease equalisation fund, if at all accepted, is an error committed by the Assessing Officer in his order passed under section 143(3) of the Act for the assessment year 1994-95 on 27-2-1997, for the assessment year 1995-96 on 12- 5-1997 and for the assessment year on 30-3-1998. The Appellant, no doubt, took up these assessments in appeal before the CIT (Appeals) and thereafter the assessment itself was subject to proceedings under section 148 and ultimately, the orders of reassessment were framed on 28-3-2002. All the subsequent events are in respect of matters other than the allowance of lease equalization fund. In other words, the error, if any,....
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....rs under section 263 of the Act would be the date of the original Assessment Order." 8. The Ld. DR argued and contended that the Ld. PCIT validly passed the order u/sec. 263. The Ld. PCIT has set aside the reassessment order which was passed on dated 29.02.2024 and not the assessment order. So, the impugned order cannot be stated as invalid in point of limitation. The Ld. DR respectfully relied on the order of Coordinate Bench of ITAT Kolkata in the case of Bhargab Engineering Works vs PCIT reported in (2025) 181 taxmann.com 112 (Kolkata- Trib.) the relevant paragraph no.7 is reproduced as below: "7. We have considered the submissions by both the sides and also gone through the facts of the case. Ground No. 1 is relating to the order passed by the ld. PCIT, Central Circle-2, Kolkata dated 25.03.2025 being barred by limitation of time prescribed under the Income Tax Act inasmuch as the period of limitation is applicable from the date of original assessment order dated 21.04.2021 and not the date of reassessment order dated 30.03.2023. This ground of appeal is dismissed as it is evident from the order under section 263 that the ld. PCIT had revised the reassessment order ....
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.... objections. Thus, the audit objections admittedly existed much prior to the completion of the reassessment proceedings dated 29.02.2024. Despite the availability of such audit objections, the reassessment proceedings were neither expanded to examine these issues nor was any addition made by the Ld. AO on those counts. More importantly, these issues admittedly arose from the original assessment proceedings completed on 18.11.2021 and were never the subject matter of the reassessment initiated only on the issue of alleged bogus purchases. 11. The settled position of law is that where reassessment is confined to a distinct issue, the limitation prescribed under Section 263(2) for revising issues unrelated to the reassessment has to be reckoned from the date of the original assessment order and not from the reassessment order. The Hon'ble Supreme Court in Alagendran Finance Ltd. (supra) and again in Industrial Development Bank of India Ltd. (supra) has categorically held that only where the subject matter of revision is the very subject matter of reassessment would limitation commence from the reassessment order; otherwise, it relates back to the original assessment order. The ....