TMI Blog2023 (5) TMI 731X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of shares. As regards huge cash deposits during demonetization period, although the assessee has deposited a sum of Rs. 19.53 crores into various bank accounts, but the Assessing Officer has not made any attempts to verify huge cash deposits in light of SOP issued by CBDT for verification of cash deposits during demonetization period. Similarly, the claim of provision for bad and doubtful debts written of was also not verified with reference to provisions of section 36(1)(vii) r.w.s. 36(2) of the Act. From observations of AO, it is very clear that although the assessee did not furnished relevant details called for by the Assessing Officer with reference to increase in share premium, cash deposit during demonetization period and provision for bad and doubtful debts, but the Assessing Officer has completed the assessment on the basis of available information on record and accepted income declared by the assessee for the relevant assessment year. Even though the assessee has not furnished any details with regard to three issues taken up by the PCIT for revision proceedings, AO has completed the assessment and accepted the income declared for relevant assessment years. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that Appellant's Assessment proceedings was completed with through verification and details were submitted in the Proceedings. 6. The Learned CIT 3 ought to have appreciated that the issues considered in the 26 3 Order in the Assessment was properly framed and sec 263 does not warrant for invoking the jurisdiction. For these and among other grounds that may be allowed to be adduced later, the appellant humbly and respectfully prays that the order U/s 263 be deleted and annulled. 3. The brief facts of the case are that, the assessee company is engaged in the business of Micro Finance Institution (MFI) offering loans through its offices located across the country. The assessee has filed its return of income for the assessment year 2017-18 on 28.09.2017, admitting a total income of Rs. 31,89,940/- under normal provisions and Rs. 89,48,699/- under the provisions of section 115JB of the Act. The assessment has been completed u/s. 143(3) of the Act, on 30.12.2019 and accepted income declared by the assessee in the return of income filed for the relevant assessment year. 4. The case has been, subsequently taken up for revision proceedings by the PCIT, Chennai-3 and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he explanation of the assessee that, in the business of micro finances, source for cash deposits is out of receipts from borrowers is not satisfactory. The Assessing Officer, has further failed to examine the claim of the provision for bad and doubtful debts in light of provisions of section 36(1)(vii) r.w.s. 36(2) of the Act. Therefore, rejected arguments of the assessee and set aside the assessment order passed by the Assessing Officer with the direction to complete the assessment after giving reasonable opportunity to the assessee. Being aggrieved by the PCIT order, the assessee is in appeal before us. 6. The Ld. Counsel for the assessee, referring to notice issued by the Assessing Officer u/s. 142(1) of the Act dated 26.12.2019, submitted that the Assessing Officer has called for various details including necessary approval received from registrar of companies for issuing shares at premium. In response to it, the assessee has filed its reply on 27.12.2019 and explained the case of the assessee. The Assessing Officer, had also issued 142(1) notice, dated 26.08.2019 and called for various details including financial statements, return of income filed for relevant assessment ye ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... has claimed deduction for provision for bad and doubtful debts, the Assessing Officer has not applied his mind to relevant provisions of Act, before allowing the claim which rendered the assessment order erroneous in so far as it is prejudicial to the interests of the revenue. 9. The provisions of section 263 deals with the power of the Commissioner to revise the assessment order, in case if he has satisfied that the assessment order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue. In order to assume jurisdiction u/s. 263 of the Act, the PCIT must satisfy that the assessment order passed by the Assessing Officer caused prejudice to the interest of the revenue. In other words, in order to invoke jurisdiction u/s. 263 of the Act, twin conditions embedded therein must be satisfied. The first and foremost condition is assessment order passed by the Assessing Officer must be erroneous and secondly it should be prejudicial to the interest of the revenue. In light of above legal position, if you examine assessment order passed by the Assessing Officer u/s. 143(3) dated 30.12.2019, we are of the considered opinion that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Assessing Officer has failed to verify the issues in light of relevant provisions of the Act and he ought to have verified in light of provisions of section 263 of the Act and Explanation (2) to section 263 of the Act, which rendered the assessment order to be erroneous in so far as it is prejudicial to the interests of the revenue and thus, the PCIT has rightly invoked their jurisdiction u/s. 263 of the Act and set aside the assessment order passed by the Assessing Officer u/s. 143(3) dated 30.12.2019. In so far as case laws relied upon by the assessee on ITAT Visakhapatnam Bench, in the case of Y.V. Ramana vs CIT-1 in ITA No. 177/Vizag/2015, dated 09.12.2016, we find that the facts of the present case does not apply to case laws relied upon by the assessee and thus, the support taken by the assessee from the above judgment is not applicable to facts of the present case. 11. In this view of the matter and considering facts and circumstances of the case, we are of the considered view that the assessment order passed by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, on the issue of increase in share premium, cash deposits durin ..... X X X X Extracts X X X X X X X X Extracts X X X X
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