TMI Blog2020 (7) TMI 369X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, it is undisputed that the matter on the issues in question is pending before the CIT(A). Thus, we find that the Commissioner has no jurisdiction to consider these issues in revisionary proceedings under Section 263 of the Act in terms of clause (c) to Explanation 1 to Section 263 of the Act. Decided in favour of assessee. - ITA No. 3576/Mum/2019 - - - Dated:- 8-7-2020 - Shri Pawan Singh, Judicial Member And Shri Rajesh Kumar, Accountant Member For the Appellant : Shri Yogesh Thar (AR) For the Respondent : Shri Rajeev Harit (DR) ORDER PER PAWAN SINGH, JUDICIAL MEMBER : 1. This appeal by assessee is directed against the order of learned Commissioner of Income Tax (LTU) hereinafter referred as ld.CIT , Mumbai passed under section 263 dated 27-03-2019 for assessment year 2013-14. The assessee has raised the following grounds of appeal: Ground No.1- Revision Order Under Section 263 Of the Income Tax Act, 1961 ( the Act ) is bad-in-law: 1. On the facts and in the circumstances of the case and in law, the Ld. Commissioner of Income Tax- LTU (hereinafter referred to as CIT ) was not justified and grossly erred in invoking the revision pro ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... der otherwise for AY 2009-10 to 2011-12. It was further noted that the same is covered by Explanation 1(a) under section 115JB(2) of the Act and therefore, required to be added to the book profit. Omission to do so resulted in short computation to book profit by ₹ 14.44 crore. 3. The show-cause notice was duly contested by assessee by filing detailed reply vide its reply dated 25.03.2019. In the reply, the assessee objected for revision of the assessment order. The assessee in reply to the show-cause notice stated that the AO while passing the assessment order examined the issue in relation to the provision of interest under section 234D and has disallowed/added back to same while determining of Minimum Alternate Tax (MAT) provision. Accordingly, the assessee submitted that revising the item of income which has been specifically examined and disallowed would amount to taxing the same amount twice and that making the double disallowance. The assessee also objected that notice does not specify as to what prejudice has been caused to the revenue. In without prejudice and in alternative submission, the assessee further submitted that issue which is sought to be revised is a su ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ee during the year on grant of pre-assessment refund for AY 2011-12) and credited to Profit Loss Account that may be withdrawn on completion of assessment for the said AY otherwise, and (b) provision of interest under section 234D of ₹ 14.44 crore estimated to be imposed on completion of assessment order otherwise for AY 2009-10 to 2011-12 to possible withdrawal of preassessment refund granted under section 143(1)/154. The ld. AR of the assessee explained that the total amount of ₹ 30.14 Crore, disallowed by AO while passing the assessment order consists of ₹ 15.70 crore and ₹ 14.44 crore. The ld. AR of the assessee submits that all these facts are explained in the Notes appended to the calculation of book profit under section 115JB. The ld. AR of the assessee submits that against the disallowance, the assessee has filed already filed appeal before the ld. CIT(A) which is pending. 6. In other alternative submission, the ld. AR of the assessee submits that once the order is passed after examining the fact and detailed order is passed by taking one of the possible views, the order cannot be said to be erroneous. The ld. AR of the assessee further submi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... does not represent interest charged under the Act and is only a provision following the mercantile system of accounting. The assessee stated that as per Explanation 2 to Section 115JB of the Act, income tax shall only include any interest charged under the Act. However, the amount of ₹ 30,14,80,247/- represents amount estimated by the assessee of the likely interest to be levied under the provisions of the Act. 17.2 The contention of the assessee is not acceptable. On perusal of the explanation, it is apparent that the amount paid or payable under the Act needs to be added back. Similar issue has been discussed in the AY 2012-13. Since there is no change in the facts, an amount of ₹ 30,14,80,247/- is added back to the book profits. Penalty proceedings u/s. 271(1)(c) of the I.T. Act is being initiated separately for furnishing inaccurate particulars of income. 9. The ld. CIT(A) before revision the assessment order issued show-cause notice identifying the issue that assessee has debited provision for interest under section 234D of ₹ 14.44 crore in account which was estimated to be imposed on completion of assessment or otherwise for AY 2009-10 to 2011-12 a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt, namely that the order is erroneous, is absent. Similarly, if an order is erroneous but not prejudicial to the interest of the revenue, then the power of suo moto revision cannot be exercised. And every erroneous order cannot be subject matter of revision because the second requirement must be fulfilled. There must be some prima facie material on record to show that tax which was lawfully eligible has not been imposed or that by the application of the relevant statue, on an incorrect or incomplete interpretation, a lesser tax than what was just has been imposed. When exercise of statutory power is dependent upon the existence of certain objective facts, the authority before exercising such power must have material on record to satisfy in that regard. If the action of the authorities challenged before the court, it would be open to the courts to examine whether relevant objective factors were available from the records called for and examined by such authority. 11. The coordinate bench of this Tribunal in Everest Industries (supra) while considering the validity of order passed under section 263, when similar issue was pending adjudication before CIT(A) held as under; ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ction 234D towards withdrawal of excess refund is nothing but income tax and same is levied and accounted as such in accounts of Department, it is covered by explanation 1(a) under section 115JB (2) of the IT Act and therefore required to be added with Book Profit. 7. In nutshell, the AO is directed to pass the order as per provisions of Income Tax Act, 1961 by making interest charged u/s 234D of ₹ 14.44 crores added to book profit. The AO is directed to give effect to the above mentioned order and issue demand notice. 13. We have further noted that in the reply to the show-cause notice, the assessee specifically contended that the assessee has already filed appeal before the CIT(A). The assessee also placed on record the copy of Form-35 [Appeal format before CIT(A)], wherein the assessee has raised specific grounds of appeal i.e. That on the facts and in the circumstances of the case, the ld ACIT was not justified and grossly erred in adding ₹ 30,14,80,247/- being provision for interest on income tax in computing book profit under section 115JB, following stand taken by AO in assessment for the previous year . 14. The ld. CIT-DR while making his submissio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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