TMI Blog2021 (4) TMI 206X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment order date 30.01.2015 passed under section 143(3). The ld. PCIT passed order under section 263(1) of the Act on 07.12.2018, which is beyond the two (02) years period of limitation, therefore, the order passed by the ld. PCIT is barred by limitation, which we hold so. Even on merit, we find that the assessee in reply to show cause notice under section 263 of the Act has specifically stated that the assessee has earned total exempt income of ₹ 2,02,337/- and the maximum disallowance should not exceed to the exempt income. The ld. PCIT instead of accepting the contention of assessee proceeded to direct the AO to frame the de-novo assessment. Considering the fact that it is settled law that disallowance under section 14A of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 2,02,337/-. 3. It is therefore prayed that above order passed by Pr. CIT u/s. 263 may please be quashed or modified as your honours deem it proper. 4. Appellant craves leave to add, alter or delete any ground (s) either before or in the course of hearing of the appeal. 2. Brief facts of the case are that assessee is a private limited company engaged in the business of Dyeing and Printing works on job basis and sale of grey fabrics filed its return of income for impugned assessment year on 29.09.2012 declaring return of ₹ 9,40,110/-. The case was selected for scrutiny. The Assessing Officer (AO) while passing the assessment order made disallowance under section 14A of the Act of ₹ 2,35,039/-. The AO before making d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tly. The AO held that entire interest expenditure attributable to exempt income. However, it must be computed under Rule 8D of the Income Tax Rules. Omission to do so, the disallowance was correctly computed to ₹ 2,35,039/- instead of ₹ 5,25,310/-, which resulted into underassessment of income of assessee by ₹ 2,90,271/-. Thus, the assessment order passed by the AO is erroneous and prejudicial to the interest of the Revenue. The assessee filed its reply. The reply of assessee is extracted in para 2.1 of the assessment order. Besides the other contention, the assessee in its reply stated that the AO while passing the assessment order under section 143(3) of the Act on 30.01.2015 the A.O. made disallowance of ₹ 2,35,03 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gh in concluding part of assessment order set-aside the assessment order under section 143(1) of the Act dated 28.02.2017. In fact, there is no addition/disallowance issued of 14A of the Act in this assessment order dated 28.02.2017. The issue of 14A of the Act was raised, discussed and disallowed by the AO in assessment order dated 30.01.2015 passed under section 143(3). The learned AR for the assessee submits that order dated 30.01.2015 could be revised up to 31.03.2017. As per section 263(2) of the Act. Admittedly, the order under section 263 of the Act is passed on 07.12.12018, which is beyond the prescribed period of limitation of two years from the end of relevant assessment year when the assessment order was passed. In support of his ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ection 147 on the issue of deduction under section 80IA of the Act. In the re-assessment order the A.O. has not examined the issue of section 14A. Thus, from the facts it is clear that the Ld. PCIT, while revising the assessment order in fact revised the assessment order date 30.01.2015 passed under section 143(3). The ld. PCIT passed order under section 263(1) of the Act on 07.12.2018, which is beyond the two (02) years period of limitation, therefore, the order passed by the ld. PCIT is barred by limitation, which we hold so. 8. Even on merit, we find that the assessee in reply to show cause notice under section 263 of the Act has specifically stated that the assessee has earned total exempt income of ₹ 2,02,337/- and the maximum ..... X X X X Extracts X X X X X X X X Extracts X X X X
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