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2020 (1) TMI 1324 - ITAT KOLKATARevision u/s 263 - allowability of “CSR” expenses borne by a PSU controlled by the Government of India u/s 37 since incurred wholly and exclusively for the purpose of business - HELD THAT:- This assessee has admittedly incurred its corporate social responsibility expenditure as per the Government of India’s guidelines only. It has been further subjected to statutory audits as well qua all the expenses incurred from time to time. The question as to whether the relevant assessment order must expressly discuss the issues in question or not so as to attract sec, 263 revision proceedings stands settled long back in Commissioner of Income Tax vs. Gabrial India Ltd. [1993 (4) TMI 55 - BOMBAY HIGH COURT] that mere non-discussion on an issue in the assessment order does not render it an erroneous causing prejudice to the interest of the Revenue. Hon'ble apex court’s landmark decisions in Malabar Industrial Co. Ltd. [2000 (2) TMI 10 - SUPREME COURT] and Commissioner of Income Tax vs. Max India [2007 (11) TMI 12 - SUPREME COURT] also hold that before an assessment is sought to be revised as erroneous causing prejudicial to the interest of the revenue, these twin conditions must exist simultaneously. Even if it is held that the AO had erred in not carrying out the necessary enquiry / factual verification on the assessee’s claim of its “CSR”, the same could not have caused any prejudice interest of the revenue in case of a public sector undertaking bound by the Government of India’s directions issued on the subject. More particularly before the insertion of Explanation-2 in sec. 37 of the Act in assessment year 2013-14 since the amended legal position carries prospective effect only - CIT’s assumption of revision jurisdiction in these facts and circumstances is not sustainable - Decided in favour of assessee.
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