The Kolkata Income Tax Appellate Tribunal has held that no revision u/s 263 when Assessing Officer has made sufficient enquiry.
The appellant, Maithan Alloys Ltd. is engaged in the manufacture and exportof niche value-added manganese alloys. The assessee filed return of income of Rs. 24,47,62,760/- against which assessmentu/s 143(3) ofthe Act was framed and assessing a total income Rs. 24,84,01,880/-.
On examination of the assessment folder the PrincipleCommissioner of Income Tax (PCIT) came to the conclusion that the assessment so framed by AO is erroneous and prejudicial to theinterest of the revenue as the AO has failed to examine certain issues and accordingly notice u/s 263 of the Act was issued against the assessee. Aggrieved, assessee filed appeal before ITAT.
Mr.Harsh Kejriwal,counsel of the assessee submitted that the assumption of revisionary jurisdiction is invalid and against the provisions of law as the PCIT has no authority to intervene and disturb the assessment which has been framed after examination or enquiry of evidences filed by the assessee in response to notice issued u/s 142(1) of the Act during the assessment proceedings.
The appellant further submitted that the interest income of Rs. 11,93,007/- has accrued from sundry debtors on delayed payment received from them over and above the credit period allowed to them and it directly attributable to the business operation of the assessee and therefore eligible for deduction u/s 80IE of the Act. With respect to the miscellaneous receipt, it represented VAT remission in pursuance to Scheme of Meghalaya State Government and the said remission is arising out the business activity of assessee and therefore eligible for the deduction u/s 80IE
The Tribunal observed that t the issue of CSR expenses has specifically been examined by the AO during the course of assessment proceedings by issuing notice u/s 142(1) which was replied by the assessee by submitting complete and comprehensive details of miscellaneous expenses which contained CSR expenses also. The Tribunal further observed that the AO has examined the issue and has taken a plausible view and therefore the conclusion of PCIT that issue has not been examined by the AO at the time of scrutiny assessment is not tenable and accordingly cannot be sustained.
The Coram of Mr. Rajpal Yadav,Vice-President and Mr. Rajesh Kumar, Accountant Memberby relying the decision of Supreme Court in CIT vs. Meghalaya Steel Ltd.has held that the exercise of revisionary jurisdiction is not valid and quash the order passed u/s 263 of the Act.
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