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2018 (10) TMI 1294 - AT - Income TaxRevision u/s 263 - CIT observed that, re-assessment made was concluded without any apparent examination of items of expenditure that were the subject of verification in the Special Audit u/s 142(2A) that the assessee company was subjected to - treat the reassessment order to be an erroneous so far as it is prejudicial to the interest of the revenue in terms of section 263 - time barred - Held that:- It is evident that apart from the specific items from the special audit report mentioned in the reasons recorded for reopening, in these reasons itself the entire special audit report and the various discrepancies therein have been made part of the reasons recorded. In this view of the matter, the assessee’s claim that the items mentioned above in relationship of impugned claim of expenditures were not subject matter of reassessment, is not tenable. As evident from the assessee’s response given to the ld. CIT itself, it has been mentioned that Software support charges, Share service cost and SAP license fees were duly mentioned in the special audit report and were made part of the reasons recorded as all items dealt in the special audit report were mentioned to be part of reasons recorded. Hence, the assessee’s plea that these items were not subject matter of reassessment is not at all sustainable and is totally against the facts arising out of the appeal. This aspect has also escaped the attention of the CIT who has justified the power to invoke section 263 otherwise on the plank that Explanation 3 of section 147 which in his opinion empowers him to do, despite the issue not being subject matter of reassessment. However, this Explanation 3 alone cannot empower the ld. CIT to exercise the jurisdiction over items which are not subject matter of the reassessment as held by the exposition of the Hon'ble jurisdictional High Court in the case of ICICI Bank Ltd. [2012 (2) TMI 308 - BOMBAY HIGH COURT]. The entire premise that these items were not made subject matter of reassessment fails inasmuch as these items were duly mentioned in the special audit report and all the items dealt in the special audit report were made part of the reasons recorded and the assessee is very much aware about the page numbers of the special audit report where these items are dealt with. Hence, the entire plea of the assessee that the order passed u/s. 263 of the Act on the above items is time barred fails as these were subject matter of reassessment order passed on 30.03.2016. The notice for revision was issued on 28.06.2016 and, hence, the same is well within the period of limitation, qua these issues. Regarding Legal and professional charges - CIT observed that A.O. needed to make further enquiry. - Held that:- If the ld. CIT was not in agreement with the view of AO, as in his opinion, some other amount was required to be disallowed, he should have spelt out the same. It is also not the case of the ld. CIT that there was something more in the special audit report on this issue which has not been examined by the A.O. The ld. CIT has not spelt out any such figure rather he has asked the A.O. to make further enquiry. In our considered opinion, this direction by the ld. CIT is not at all sustainable on the anvil of the decision of Gabriel India Ltd . [1993 (4) TMI 55 - BOMBAY HIGH COURT] mentioned by the ld. Counsel of the assessee before the ld. CIT himself. It is also settled law that if there are two views possible and if the A.O. has adopted one view with which the ld. CIT does not agree, the same will not give rise to the jurisdiction by the ld. CIT. Order u/s 263 confirmed with respect to 3 issues but quashed with respect to legal and professional charges. - Decided partly in favour of assessee.
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