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2022 (3) TMI 1456 - ITAT KOLKATARevision u/s 263 by CIT - disallowance of amount u/s 35 and claim debited towards advertisement in the Profit & Loss A/c, as prior period expenses, which deserves to be disallowed - HELD THAT:- As on perusal of the observations and finding/direction given by the Ld. PCIT shows that no examination and verification has been done by the Ld. PCIT before arriving at the consideration of holding assessment order being erroneous in so far as it is prejudicial to the interest of the revenue. PCIT in the present case has not carried out any enquiry of his own and has merely set aside the assessment to the file of the AO to re-examine the issue of claim of advertisement expenses alleged to be held as prior period expenses. Therefore, it is contrary to the guidelines as mandated in the Hon'ble Delhi High Court decision in the case of ITO v. DG Housing Projects Ltd. [2012 (3) TMI 227 - DELHI HIGH COURT]. Accordingly, the consideration arrived at by the Ld. PCIT invoking provisions of section 263 is not justified and cannot be sustained under the facts and circumstances of the present case. We find that Ld. PCIT has taken note of the amendment made in section 263 w.e.f. 01.06.2015. This amendment relates to Explanation 2 inserted in section 263 of the Act. The co-ordinate bench has dealt with Explanation 2 as inserted by the Finance Act, 2015 in the case of Narayan Tatu Rane v. Income Tax Officer [2016 (5) TMI 1162 - ITAT MUMBAI] to hold that the said Explanation cannot be said to have overridden the law as interpreted by the Hon'ble Delhi High Court in DG Housing Projects Ltd (supra), according to which the Ld. PCIT has to conduct an enquiry and verification to establish and show that the assessment order is unsustainable in law. Also further held that the intention of the legislature could not have been to enable the Ld. PCIT to find fault with each and every assessment order, without conducting any enquiry or verification in order to establish that the assessment order is not sustainable in law, since such an interpretation will lead to unending litigation and there would not be any point of finality in the legal proceedings. The opinion of the Ld. PCIT referred to in section 263 of the Act has to be understood as legal and judicious opinion and not arbitrary opinion. On the two issues considered by the Ld. PCIT in the impugned order, no action u/s 263 of the Act is justifiable which cannot be sustained under the facts and circumstances of the present case and judicial precedents dealt herein above. We, therefore, quash the impugned order u/s 263 of the Act and allow the grounds raised by the assessee.
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