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TMI Blog2023 (12) TMI 1028X X X X Extracts X X X X X X X X Extracts X X X X ..... mpugned assessment order must be erroneous and that error must be prejudicial to the interest of the revenue. In the present case, AO has passed the reasoned assessment order after analyzing all details and therefore there was no error in the impugned assessment order so as to justify action u/s 263 of the Act. Under the the very assumption of power u/s 263 of the Act is unjustified and bad in law and therefore, order u/s 263 of the Act deserved to be quashed. 3. The learned CIT has erred in law and on the facts of the case in holding that assessee has claimed deduction of Rs. 41.31.31.877/- u/s 80P as against the correct amount of Rs. 36,73,36,662, resulting into excess claim of Rs. 4.57,95,215/- and accordingly, directing AO to frame the assessment afresh after proper examination, enquiry and verification of all the issues. 4. The learned CIT failed to appreciate that the figurative work given in Para 2.0 of the impugned order, on the basis of which the so called excess claim of deduction u/s 80P has been worked out, is itself baseless. 5. The learned CIT has further erred in law in not coming to any concrete conclusion and without conducting any inquiry or investigating th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 6. The impugned order of the Ld. PCIT has been challenged by the Ld. Counsel for the assessee before us on the following grounds: i. That the PCIT had assumed jurisdiction under Section 263 of the Act on the basis of incorrect facts. ii. That the issue was otherwise examined by the AO. iii. The Ld. PCIT's charge that the assessee had been incorrectly allowed deduction under Section 80P of the Act on income which was otherwise not eligible under law was not based on any fact coming out of records of the assessee and no show cause notice to this effect was given to the assessee while holding so. 7. The Ld. DR has controverted all the arguments raised by the Ld. Counsel for the assessee before us stating that: i. The assessee's contention of claim of jurisdiction under Section 263 of the Act basis incorrect fact was never confronted or contended during revisionary proceeding before the Ld. PCIT and therefore cannot be raised before us. ii. That the Ld. PCIT has clearly brought out the fact that the AO's allowance of claim of deduction to the assessee under Section 80P of the Act was not in accordance with law and therefore the assessee cannot claim any benefit by stating ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 877/-u/s.80(P) (2) (i) of the Act claimed and allowed by the AO is found to be incorrect. 3. From the above discussions, it appears that the said assessment order dated 30/10/2014 is erroneous and prejudicial to the interest of revenue to the extent mentioned above. You are, therefore, requested to show cause as to why the total income assessed u/s. 143(3) of the Act should not be enhanced or modified u/s. 263 of the Act..." 10. The first contention of the assessee, that the jurisdiction was assumed by the Ld. PCIT basis incorrect facts ,rest on the fact that neither the records reveal any expenditure to the tune of Rs. 51.04 Crore incurred by the assessee nor did the Ld. PCIT pointed out as to from where he picked up this figure of expenses of Rs. 51.04 Crore so as to arrive at the profits of the business of the assessee at Rs. 36.73 Crore. 11. To this effect, the Ld. Counsel for the assessee drew our attention to the P&L account of the assessee cooperative society placed before us at paper book Page No.31 pointing out therefrom that the total expenses booked for the year amounted to Rs. 36 Crores only and there was no figure of Rs. 51Crore which can be derived as pertaining t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... how the Ld. PCIT arrived at the finding that the income of the assessee eligible to deduction under Section 80P(2)(a)(i) of the Act was only Rs. 36 Crore and not Rs. 41 Crore as claimed and allowed to the assessee. We have noted that while the assesse claim of deduction of Rs. 41 Crores of profit under Section 80P(2)(a)(i) of the Act emanated from the records including the financial statement, the tax audit report and computation of income filed by the assessee, all documents filed before us in Paper book, and was also examined during assessment proceedings by issuance of notice under Section 142(1) of the Act and replies filed by the assessee placed before us at paper book page Nos. 51 to 54 ,the basis of the Ld. PCIT for holding that the assessee was eligible to only Rs. 36 Crores deduction under Section 80P(2)(a)(i) of the Act is not clear nor does it seen to arise from the records before us. 15. Therefore, we hold that the very basis for assumption of jurisdiction to revise assessment order fails on account of the error in the assessment order having been found by the Ld. PCIT on the basis of incorrect facts. Clearly, the records do not support the finding of the PCIT that th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ess attributable to any one or more such activities only. The interest income earned out of FDs with banks other than co. op. societies is not admissible for deduction as per the provisions of sec. 80P of the Act, thus liable to be disallowed." 17. Ld. Counsel for the assessee has pointed out that no show cause notice was issued to the assessee before holding so and the Ld. DR was unable to controvert the same though he contended that since the assessee himself had pointed out this fact there was no need of any show cause notice. 18. We are not in agreement with the Ld. DR. Even if the Ld. PCIT had noted the fact of assessee having claimed deduction on an ineligible income from the assesses statement of facts before him, it was his bounden duty to confront the assessee that it was ineligible in law for deduction u/s 80P of the Act, before holding the assessment order being erroneous on having allowed the assessee's claim of deduction under Section 80P(2)(a)(i) of the Act on the same. In the absence of any show cause notice being given to the assessee, the finding of error by the Ld. PCIT on account of the same is not sustainable in law and the revisionary order passed, therefore, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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