TaxTMI 
TaxTMI 
2024 (7) TMI 1819
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....f Rule 18(6) of the ITAT Rules, 1963. 4. Briefly stated the facts of the case are that, the assessee is a commercial bank having its head office in France. It has eight (8) branches in India and is involved in normal banking activities including financing of foreign trade and foreign exchange transactions. The return for the year under consideration was filed on 30/11/2017 declaring total income at Rs.7,10,44,21,630/-. The return was selected for CASS scrutiny assessment and accordingly statutory notices were issued and served upon the assessee. The return of income was assessed at Rs.7,66,12,56,920/-, vide order dt. 08/04/2021 framed u/s 143(3) r.w.s. 144C(13) of the Act. 5. Assuming jurisdiction cast upon him by the provisions of Section 263 of the Act, the CIT(IT), Mumbai-1, issued a show-cause notice u/s 263 of the Act which reads as under :- "I have called for and examined the records of IT proceedings in your case for A. Y. 2017-18. It is seen that the order passed u/s 143(3) of the Income Tax Act, 1961 by DCIT(IT)-1(3)(1) dated 08.04.2021 has been passed without making enquiries and verification which should have been made. It is seen from computation....
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....by him tantamounts to being erroneous and prejudicial to the interest of the revenue. 7. All that we have to see is whether sufficient enquiry was made by the AO during the assessment proceedings. Vide notice dt. 18/11/2019 u/s 142(1) of the Act, the AO raised the following queries :- "Sir/Madam/ M/s, In connection with the assessment for the assessment year 2017-18 you are required to: a) Furnish or cause to be furnished on or before 21/11/2019 at 03:45 PM the accounts and documents specified overleaf. b) Furnish and verified in the prescribed manner under Rule 14 of 1.T. Rules 1962 the information called for as per annexure and on the points or matters specified therein on or before 21/11/2019 at 03:45 PM. c) The above mentioned evidence/information is to be furnished online electronically in 'E-Proceeding' facility through your account in 'e-filing' website of Income Tax Department. d) Para(s) (a) to (c) are applicable if you have an account in e-filing website of Income Tax Department. Till such an account is created by you, assessment proceedings be carried out either through your e-mail account or manual....
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.... Rs 30,248,620 has been added back to the net profit as per profit and loss account while computing income under the head 'Profits and gains of business or profession'. An amount of Rs 15,124,310 representing 50% of the aforesaid amount of donations made has been claimed as a deduction in accordance with the provisions of section 80G of the Act. The Assessee humbly wishes to submit that the deduction under section 80G of the Act is not a deduction allowed under the head 'Profits and gains of business or profession' but a general deduction allowed under Chapter VIA of the Act while computing the total income. Thus, it is submitted that section 80G of the Act does not require an Assessee to necessarily have a business purpose in order to claim a deduction under that section as such deduction is available even if an Assessee does not carry on any business. 2. Details of Other expenses and need of the same for business purpose. The details of 'Other expenses' have been submitted with your office vide our letter dated 24 October 2019 (please refer to Annexure 3 of that letter). The Assessee wishes to submit that the entire expenditure h....
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....Proceeding' facility through your account in 'e-filing' website of Income Tax Department. d) Para(s) (a) to (c) are applicable if you have an account in e-filing website of Income Tax Department. Till such an account is created by you, assessment proceedings shall be carried out either through your e-mail account or manually (if e-mail is not available) e) In cases where order has to be passed under section 153A/153C of the Income Tax Act, 1961 read with section 143(3), assessment proceedings would be conducted manually. This office calling for the details of various expenses to confirm that they are following basic principles of governing admissibility of deduction u/s 30 to 44AD. The donation receipts are not submitted by you which shows the amount of donation, date of donation. exemption certificate from person who received donation and mode of payment, etc. Details of insurance details, date of payment mode of payment details of goods/premises against which insurance taken, etc. For your further clarification it is requested that any type of deduction and exemption claim made by you are to be substantiate with th....
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....ue. 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 it is not erroneous but is prejudicial to the Revenue -- recourse cannot be had to section 263(1) of the Act. The provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer, it is only when an order 7 is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous ". 15. The Hon'ble Bombay High Court in the case of Gabriel India Ltd 203 ITR 108 has held as under: "The power of suo motu revision under subsection (1) is in the nature of supervisory jurisdiction and the same can be exercised only if the circumstances specified therein exist. Two circumstances must exist to enable the Commissioner to exercise power of revision under this sub- section, viz., (i) the order is erroneous; (....
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....e said in such a case that in the opinion of the Commissioner the order in question is prejudicial to the interests of the Revenue. But that by itself will not be enough to vest the Commissioner with the power of suo motu revision because the first requirement, viz., that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the interests of the Revenue, then also the power of suo moto revision cannot be exercised. Any and every erroneous order cannot be the subject-matter of revision because the second requirement also must be fulfilled. There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. We, therefore, hold that in order to exercise power under sub-section (1) of section 263 of the Act there must be material before the Commissioner to consider that the order passed by the Income-tax Officer was erroneous in so far as it is prejudicial to the interests of the Revenue. We have already held what is erroneous. It must be an order which is....
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....ner on satisfaction of twin conditions, i.e., the assessment order should be erroneous and prejudicial to the interest of the Revenue. By 'erroneous' is meant contrary to law. Thus, this power cannot be exercised unless the Commissioner is able to establish that the order of the Assessing Officer is erroneous and prejudicial to the interest of the Revenue. Thus, where there are two possible views and the Assessing Officer has taken one of the possible views, no action to exercise powers of revision can arise, nor can revisional power be exercised for directing a fuller enquiry to find out if the view taken is erroneous. This power of revision can be exercised only where no enquiry, as required under the law, is done. It is not open to enquire in case of inadequate inquiry. Our view is fortified by the decision of Hon'ble High Court of Bombay in the case of CIT vs. Nirav Modi, [2016] 71 Taxmann.com 272 (Bombay)". 17. The Hon'ble High Court of Gujarat in the case of CIT us. Nirma Chemical Works Ltd. 309 ITR 67 has observed as under: "if assessment order were to incorporate the reasons for upholding the claim made by an assessee, the result would be an epit....