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2025 Supreme(Online)(ITAT) 3548
INCOME TAX APPELLATE TRIBUNAL (MUMBAI BENCH)
PAWAN SINGH, J
The Ruby Mills Limited – Appellant
Versus
Pr. Commissioner of Income Tax (Central)-5 – Respondent
ITA No. 3035/MUM/2025
For the Appellants/Petitioners: Ms. Simran Dhawan, Ravi Ganatra
For the Respondents: Shri Umashankar Prasad
The court established that the Principal Commissioner of Income Tax cannot revise an assessment order under Section 263 unless it is shown to be erroneous and prejudicial to revenue, which was not proven in this case.
Headnote:(A) Income Tax Act, 1961 - Sections 263 and 80G - Revision of assessment order - The Principal Commissioner of Income Tax directed the Assessing Officer to re-examine the assessment order, claiming it was erroneous and prejudicial to the revenue's interests - The court found that the conditions for invoking Section 263 were not met as the Assessing Officer had adequately examined the CSR expenditure and allowed deductions under Section 80G - The appeal was allowed. (Paras 1-8)
(B) Legal principles - The court reiterated that the revisionary power under Section 263 can only be exercised if the original assessment order is found to be erroneous and prejudicial to the revenue, which was not the case here. (Paras 6-7)
Facts of the case:
The assessee, a company, filed its return showing income of Rs. 31.64 crore, which was scrutinized. The Principal Commissioner later sought to revise the assessment on the grounds that the CSR expenses claimed as deductions under Section 80G were not allowable.
Findings of Court:
The court determined that the Assessing Officer had made a reasonable decision based on the evidence provided and that the revisionary action was not justified.
Issues: The main issues were whether the Principal Commissioner correctly exercised jurisdiction under Section 263 and whether CSR expenses could be allowed as deductions under Section 80G.
Ratio Decidendi: The court held that the Assessing Officer's decision was legally sustainable and that the revisionary power was improperly invoked.
Result: Appeal allowed.
| Table of Content |
|---|
| 1. grounds of appeal and factual background. (Para 1 , 2) |
| 2. court's observations and reasoning on csr deductions. (Para 3) |
| 3. arguments regarding the legality of the pcit's order. (Para 4 , 5) |
| 4. ratio decidendi on jurisdictional issues under section 263. (Para 6 , 7) |
| 5. final conclusion allowing the appeal. (Para 8) |
PER PAWAN SINGH, JUDICIAL MEMBER:
1. This appeal by assessee is directed against the order of Principal Commissioner of Income Tax (PCIT) – 8, Mumbai dated 10.03.2025 for AY 2020-21. The assessee has following grounds of appeal:
1. On the facts and in the circumstances of the appellant's case and in law, the Ld. Principal Commissioner of Income Tax, erred on facts and in law in passing order u/s 263 directing the Assessing Officer to re-examine assessment order dated 29.09.2022 u/s 143(3) of the Income Tax Act, 1961 which is illegal, bad-in-law and void for want of jurisdiction.
2. On the facts and in the circumstances of the appellant's case and in law, the Ld. Principal Commissioner of Income Tax, erred in passing the revisionary order u/s 263 of the Income Tax Act, 1961 despite the fact that the twin perquisites of initiating revisionary action i.e., the order of the Assessing Officer sought to be revised was erroneous; and (ii) it was prejudicial to the interests of the revenue; were lacking simultaneously.
3. On the facts and in the circumstances of the appellant's case and in law, the Ld. Principal Commissioner of Income Tax, erred on facts and in law in passing order u/s 263 of the Act directing the Assessing Officer to pass fresh assessment order as against the assessment order passed u/s 143(3) r.w.s 144 on 29.09.2022 which was passed after in-depth examination, scrutiny and meticulous analysis of the material, information and details placed on record, which cannot be treated as improper enquiries by the Assessing Officer in absence of any new material/ evidence on record of the Ld. Principal Commissioner of Income Tax and therefore, failed to appreciate that Explanation 2(a) u/s 263(1) does not justify revision of any order under the guise of enquiries that may be endless.
4. On the facts and in the circumstances of the appellant's case and in law, the Ld. Principal Commissioner of Income Tax erred on facts and in law by invoking Section 263 of the Act solely due to change of opinion from that of the Ld. Assessing Officer. Such an instance does not empower the Ld. Principal Commissioner of Income Tax u/s 263 of the Act to supersede his opinion in lieu of the lawful opinion formed by the Ld. Assessing Officer without even demonstrating as to how the opinion of Ld. Assessing Officer was irrational or unsustainable in Law in view of law settled by Hon'ble Supreme Court in case of Malabar Industrial Co. Ltd. v. Commissioner of Income-tax [2000] 243 ITR 83 (SC) and followed by Jurisdictional Delhi High Court in many cases.
5. On the facts and in the circumstances of the appellant's case and in law, the Ld. Principal Commissioner of Income Tax erred on facts and in law by going beyond the jurisdictional rights granted u/s 263 of the Income Tax Act, 1961. As the order passed by the assessing officer is not erroneous as per the Explanation 2 to Section 263 of the Income Tax Act, 1961 and thereby making the order u/s 263 is invalid, illegal, unwarranted and bad in law.
6. On the facts and in the circumstances of the appellant's case and in law, the Ld. Principal Commissioner of Income Tax, erred on facts and in law in passing order u/s 263 of the Act directing the Assessing Officer to pass fresh assessment order for making disallowance of CSR Expenditure claimed as deduction u/s 80G of Chapter VIA of the Act to the tune of Rs. 48,54,723/- despite the fact that the said expenditure was eligible for deduction u/s 80G of the Act thereby completely ignoring the decisions of the jurisdictional High Court and Tribunal in the matter.
7. The appellant craves leave to add to, alter, amend, modify and/or delete all or
