TMI Blog2022 (12) TMI 756X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee for A.Y. 2013-14 is directed against the order dated 06.02.2018 passed u/s 263 of the Income-tax Act, 1961 (hereinafter referred to as the Act ) by the Pr. CIT, Kolkata-4, Kolkata which is arising from the assessment order dated 28.03.2016 passed by DCIT, Circle-10(1), Kolkata. The assessee has raised the following grounds of appeal : 1. That the learned Pr. Commissioner of Income Tax has erred in law and in fact by passing an order under section 263(1) in accordance with the Explanation 2 (c) whereas no order/ direction has been made to the AO as envisaged in Explanation 2(c). 2. That the learned Pr. Commissioner of Income Tax has erred in law and in fact by passing an order under section 263(1) in accordance with the Explanation 2(c) whereas he has not mentioned anywhere in the order the deficiency of the AO as envisaged in Explanation 2(c). 3. That the learned Pr. Commissioner of Income Tax has erred in law and in fact by passing an order under section 263 particularly when the issue was claiming of excess deduction u/c 80IC and it was proved beyond doubt that no excess claim was made as it was a case of substantial expansion. 4. That the learne ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 3 is initiated on the ground that the relevant assessment year was 7th year of assessment. Hence 30% deduction should be allowed instead of 100% which was allowed by the learned assessing officer. Section 263 proceeding is initiated without considering the fact that it was a case of substantial expansion. In case of substantial expansion, the deduction should be 100%. 2. The assessee company is unable to find out the excess depreciation as alleged in notice amounting to Rs. 97,69,375/- being the difference between Rs. 1,39,56,249/- and 41,86,874/-. 3. It has also mentioned in the aforesaid letter that during the course of assessment, the assessee had not filed 10CCB in support of the claim. Form 10CCB was not filed as it was not asked for. However, we now enclose 10CCB for the assessment year 2013-14 for your kind perusal records. Page number 1 to 6. 4. We wish to draw your kind attention on the relevant page number 5 in which it was mentioned that there was a substantial expansion. The date of substantial expansion mentioned in 10CCB was 13.02.2012. Relevant financial year 2011-12 and the assessment year was 2012-13. 5. The year of substantial expansion the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing substantial specific and. Thus, the issues discussed above remained unverified and order passed u/s 143(3) of the Income Tax Act, 1961 on 28.03.2016 suffers lack of enquiry/inadequate verification causing the order passed u/s 143(3) of the Act erroneous so far as prejudicial to the interest of revenue. 5. The power of revision by the CIT p/s 264 of the Act is very wide and it is in the nature of supervisory jurisdiction. The power u/s 263 can be exercised even in cases where the issue is debatable and such power is not comparable with the power of rectification of mistake u/s 154 of the Act. It is well settled that incorrect assumption of facts or application of law satisfies the requirement of law i.e. order being erroneous and prejudicial to the interest of revenue. The order passed by the AO without application of mind or order showing apparent error of reasoning of the order where the AO simply accepts where the assessee stated in his return of income and fails to make the enquiries which are called for in the facts and circumstances of the case will also call for intervention u/s 263 of the Act by the CIT/Pr. CIT. It is a trite law that the disclosure of facts by the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the facts and the legal position stated above, I am of the view that the order passed on an incorrect assumption of facts or incorrect application of law and without making requisite inquiries will satisfy the requirement of the order being erroneous and prejudicial to the interest of the revenue within the meaning and scope of Section 263 of the Income Tax Act, 1961. The aforesaid decisions postulate that when the officer is expected to make an inquiry of a particular item of income an different he does not make an inquiry as expected, that would be a ground for the Commissioner to interfere with the order passed by the Officer since such an order passed by the Officer is erroneous and prejudicial to the interests of the Revenue (K. A. Ramaswamy Chttiar vs. CIT (1996) 220 ITR 657). 3. However, at the time of hearing, the assessee has failed to satisfy the ld. PCIT in support of its claim, therefore, the ld. PCIT held that the impugned assessment order dated 28.03.2016 framed u/s 143(3) of the Act is erroneous and prejudicial to the interest of revenue and thus he directed the ld. AO pass fresh assessment order after considering the observation made in the impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e ld. DR vehemently opposed the submission made by the ld. AR. Further, he supported the order passed by the ld. PCIT. We from the perusal of the impugned order noticed that the assessee has claimed Rs. 1,39,56,248.58/- in respect of deduction u/s 80IC of the Act. However, the assessee had not filed 10CCB in support of the claim during the course of assessment proceeding and the fact has been alleged by the ld. PCIT in his notice issued to the assessee. During the course of proceedings u/s 263 before the ld. PCIT, assessee has failed to file any supporting evidence to substantiate the claim that the AO has examined the facts while framing the assessment order. On perusal of the assessment order, it reveals that no such issues came for consideration before the ld. AO at the time of framing such assessment order and it cannot be ascertained whether any such fact as well as information were called for by the AO regarding the issue raised / as referred in show cause notice u/s 263 of the Act. 7. Considering the above facts and circumstances of the case, we are unable to find any such document on record which could show that this issue regarding deduction of claim u/s 80IC of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X
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