आयकर अपीलीय न्यायाधिकरण में , हैदराबाद ‘ए’ बेंच , हैदराबाद IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad श्री मंजूनाथ जी, माननीय लेखा सदस्य एवं श्री रवीश सूद, माननीय न्याययक सदस्य SHRI G. MANJUNATHA, HON’BLE ACCOUNTANT MEMBER AND SHRI RAVISH SOOD, HON’BLE JUDICIAL MEMBER आयकरअपीलसं./I.T.A.No.790/Hyd/2025 (यनर्ाारण वर्ा/ Assessment Year: 2020-21)

Amara Raja Power Vs. The Deputy Commissioner of Systems Limited, Income Tax, Tirupati. Circle -1(1), Tirupati.

PAN : AABCA9265F (अपीलार्थी/ Appellant) (प्रत्यर्थी/ Respondent)

करदाता का प्रयतयनयर्त्व/ Assessee : Shri E. Phalguna Kumar, Represented by C.A.

राजस्व का प्रयतयनयर्त्व/ Department : Shri U. Mini Chandran, Represented by CIT-DR सुनवाई समाप्त होने की यतयथ/ Date of : 24.07.2025 Conclusion of Hearing घोर्णा की तारीख/Date of Pronouncement : 10.09.2025

O R D E R

प्रयत रवीश सूद, जे.एम./PER RAVISH SOOD, J.M.

The present appeal filed by the assessee company is directed against the order passed by the Principal Commissioner of Income-Tax, Tirupati (for short, “Pr. CIT”) under Section 263 of the Income Tax Act, 1961 (For short, “the Act”) dated 27.03.2025, which in turn arises from the order passed by the Assessing Officer (for short, “A.O”) under Section 143(3) r.w.s. 144B of the Act, dated 26.09.2022 for A.Y. 2020-21.

2. The assessee company has assailed the impugned order on the following grounds of appeal before us:

“1. The Order of the Ld. Principal Commissioner of Income Tax (hereinafter referred to as "Principal CIT"), Tirupati, is without jurisdiction and is not based on facts and circumstances of the case. Hence the same is bad in law and the decision of Ld. Principal CIT, Tirupati needs to be reversed.

2. The Ld. Principal CIT, Tirupati erred in not granting the appellant with an opportunity of personal hearing. The Ld. Principal CIT, by not granting an opportunity of personal hearing, violated the principles of natural justice and hence, the Order passed by the Ld. Principal CIT is bad in law.

3. The Ld. Principal CIT, Tirupati erred in invoking the revisionary jurisdiction under Sec 263 of the Income Tax Act 1961 by stating that the Assessment Order is erroneous and prejudicial to the interests of the revenue. The Assessment order passed by the Assessing officer does not satisfy the statutory twin conditions prescribed under section 263 of the Act, viz., (i) that the assessment order is erroneous; and (i) that the assessment order is prejudicial to the interest of Revenue, which are to be cumulatively satisfied.

4. The Ld. Principal CIT, Tirupati failed to conclude that the Assessment Order is both erroneous and prejudicial to the interests of the revenue. The Ld. Principal CIT, Tirupati, based on suspicion, invoked the Revisionary jurisdiction under Sec 263, which is bad in law.

5. The Ld. Principal CIT, Tirupati failed to appreciate that Explanation 2 to Sec 263 does not entail the Ld. Principal CIT to revise any assessment Order, on the basis of suspicion.

6. The appellant therefore prays the hon'ble Income Tax Appellate Tribunal to i) Uphold the fact that the Assessment Order is neither erroneous nor prejudicial to the interests of the revenue ii) Set-aside the Order of the Principal Commissioner of Income Tax passed under Sec 263 of the Income Tax Act 1961.

7. The appellant craves leave to add, amend, alter, modify, substitute, abridge and/or rescind any or all of the above grounds with the kind permission of the Hon'ble Tribunal at any time either before or on the date of hearing.”

3. Succinctly stated, the assessee company, which is a manufacturer of power control equipment, had filed its return of income for A.Y. 2020-21, declaring an income of Rs. 35,78,29,240/-. Subsequently, the case of the assessee company was selected for complete scrutiny (CASS) under the E- Assessment Scheme, 2019 on certain issues, viz. (i). stock valuation; (ii). refund claim ICDS; (iii). compliance and adjustment; (iv) investment in intangible assets; and (v). deductions claimed fro