TaxTMI 
TaxTMI 
2026 (7) TMI 1567
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....n 144B as the faceless assessment made is not covered under section 263 and hence the order passed by the Principal CIT is bad in law 3. The Principal CIT Chennai 3, Chennai erred in not appreciating the fact that only the order passed by the Assessing Officer/TPO is covered under section 263 and not faceless assessment made under the provisions of section 1448 as the assessment is not made by a single officer but after consideration of the case by the following different units consisting of (i) Assessment unit (ii) Verification unit (i) Technical Unit (iv) Review Unit 4. Without properly appreciating the prescribed mandatory, statutory four tiers scrutiny followed before a faceless assessment is made u/s. 1448 dated 21.03.2024, the Principal CIT erred in concluding in para 7 of his order that necessary enquiries were not made by the faceless unit without even indicating what those "necessary enquiries" were and on the vague footing rushing to the conclusion that the assessment made was erroneous and prejudicial to the revenue. 5. Without prejudice to the above grounds, the following grounds are raised a. The P....
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....utiny assessment under CASS to verify the following items : Reason for selection of Case i. Expenditure debited to P&L for earning Exempt Income is very less in comparison to the Investments made to earn exempt income ii. Reduction in profit because of application of Income Computation & Disclosure Standards iii . Addition of assets during the year in the block of assets where rate of depreciationclaimed is 40% or higher iv. Large any other amount allowable as deduction claimed in Schedule BP of return v. High liabilities as compared to low income/receipts vi. Cases in which large addition made in earlier years vii. High ratio of refund to TDS viii. Claim of Large Value Refund ix. Reduction in profit because of application of Income Computation & Disclosure Standards x. Increase in TDS/TCS claim in the revised return Case Category CASS 4. The assessment was completed by the e-Assessment Unit of the Department (hereinafter called 'AO') vide order dated 21.03.2024 passed u/s. 143(3) read with section 144B of the Income Tax Act, 1961 accepting the returned income. 5. Subsequently, the Learned Principal Commissioner of Income Tax, Chennai-3 ....
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.... of the Act, as it does not amount to an assessment order passed u/s. 143(3) of the Income Tax Act and Explanation(1) to section 263(1) of the Act does not specify an order passed u/s. 144B of the Act. He further submits that the assessment order was passed under supervision and control of NFAC headed by Principal Chief Commissioner or Principal Director General of Income Tax and therefore, the Principal Commissioner cannot invoke the powers of revision u/s. 263 against 144B orders. He further submits that the assessment order was passed after considering the replies filed by the appellant company pursuant to the series of notices issued u/s. 142(1) of the Act, he further submits that the issues sought to be revised by the ld.Pr.CIT were raised in those notices and duly replied by the appellant. The replies filed by the appellant are placed at page no.18 to 90 of the paper book. 9. On the merits of the issues sought to be revised u/s. 263 of the Act, the ld.Counsel submits that the appellant had corrected the error in the quantification of the correct amount deductible u/s. 36(1)(vii) in the Income Tax Return for the A.Y.2023-24, therefore, it is a tax neutral transaction, hence....
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....ers or in the performance of functions of the Assessing Officer assigned to him under the orders or directions issued by the Board which clearly falls under Sub-Clause(ii) of Clause(A) of Explanation(1) of sub-section(1) of the Section 263 of the Income Tax Act. 15. With regard to the contention of the appellant company that since the Faceless Assessment Order was passed under direction and supervision of Principal Chief Commissioner of Income Tax of Faceless Assessment Unit, the Principal Commissioner of Income Tax who is below the rank of Principal Chief Commissioner of Income Tax, cannot revise the assessment order in exercise of power vested with him u/s. 263 of the Income Tax Act, on careful perusal of the provisions of section 144B of the Act, there is nothing to show that the assessment order passed u/s. 144B of the Act is passed by Principal Chief Commissioner of Income Tax of Faceless Unit. Therefore, the contention is devoid of any merit, accordingly dismissed. 16. In the result, Ground No.2, 3 & 4 filed by assessee stand dismissed. Ground No.5 : 17. Next, we shall take up Ground of Appeal No.5 challenging the validity of assumption of jurisdiction u/s. 263 of....
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....there was mistake in the computation of correct amount of deduction u/s. 36(1)(vii) of the Income Tax Act which was rectified in the subsequent assessment year i.e. A.Y.2023-24. It is a salutary principle of law that income should be taxed in the right hands and in the right year. Reference in this regard can be placed on the decision of Hon'ble Supreme Court in the case of ITO Vs. Ch.Atchaiah [1996] 218 ITR 239 wherein it was held as under : "7. In our opinion, the contention urged by Dr. Gauri Shanker merits acceptance. We are of the opinion that under the present Act, the ITO has no option like the one he had under the 1922 Act. He can, and he must, tax the right person and the right person alone. By 'right person', we mean the person who is liable to be taxed, according to law, with respect to a particular income. The expression 'wrong person' is obviously used as the opposite of the expression 'right person'. Merely because a wrong person is taxed with respect to a particular income, the Assessing Officer is not precluded from taxing the right person with respect to that income. This is so irrespective of the fact which course is more beneficia....
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....ination 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 coupled with the fact that it is admitting prejudicial to the interest of the revenue, exercise of revisional jurisdiction u/s. 263 of the Act by the ld. Commissioner of Income Tax is proper and valid." 23. The Hon'ble Bombay High Court in the case of PCIT Vs. Zuari Maroc Phosphates Ltd. [2021] 126 taxmann.com 170 (Bom) held as under : "27. In several decisions, it has been held that it is incumbent on the Assessing Officer to investigate the facts stated in the return when the circumstance would make such an inquiry prudent and when the word "erroneous" in section 263 includes failure to make an inquiry, the order becomes erroneous when such an inquiry had been made and not because there is anything wrong with the order if all the facts stated therein are assumed to be correct. Duggal and Co. v. CIT [1996] 220 ITR 456 (Delhi); CIT v. Pushpa Devi [1987] 164 ITR 639 (Patna) and CIT v. Smt. Pushpa Devi [1988] 173 ITR 445 (Patna). 24. Even the Jurisdictional High Court in the case of K. A. Ramaswamy Chettiar v....