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2019 (11) TMI 1056 - AT - Income TaxRevision u/s 263 - as per CIT AO did not examine the issue related to the depreciation and the late deposit of the EPF in respect of employees contribution - HELD THAT - Assessee has claimed only book depreciation of ₹ 9,59,353/- which has been added back in computation of income causing no revenue loss. In support of this contention, assessee has drawn our attention to profit loss account. The fact that the assessee has disclosed the depreciation as other income is not controverted by the revenue nor the Ld. Pr. CIT has brought any contrary material on record. Therefore, CIT was not justified in revising the assessment order on this ground. Late deposit of EPF of employees contribution - It is stated by the assessee that all the amounts have been paid in EPF account before the due date of filing and filing of return of income - We find merit into the contention of the assessee as the law is settled by the judicial pronouncements that if assessee has deposited EPF, which is before the due date of filing of return, there should not be any disallowance. Hence, there is no prejudice caused to the revenue in this respect as well. Therefore, on both the issues invoking of provisions u/s 263 is not justified. We therefore, quash the impugned order being contrary to the settled principle of law. - Appeal filed by the assessee is allowed.
Issues:
1. Validity of order passed under section 263 of the Income Tax Act. 2. Justification for revising the assessment order by the Principal CIT. 3. Consideration of issues related to depreciation and EPF deposit in assessment. Analysis: Issue 1: Validity of order under section 263 The appeal challenged an order passed under section 263 of the Income Tax Act, 1961, by the Principal CIT-1, Bhopal for the assessment year 2013-14. The key contention was that the order was erroneous and prejudicial to the interest of revenue, warranting revision. The Appellate Tribunal emphasized that for invoking jurisdiction under section 263, two conditions must be satisfied: the order should be both erroneous and prejudicial to revenue. The Tribunal highlighted the necessity of these twin conditions for lawful exercise of revisionary powers. Issue 2: Justification for revising assessment order The Principal CIT revised the assessment order due to alleged errors by the Assessing Officer (A.O.), specifically related to depreciation and late EPF deposit. The Tribunal noted that the A.O. had charged depreciation but reversed a significant portion as other income, resulting in minimal revenue impact. Additionally, the EPF contribution was made before the due date, aligning with judicial precedents allowing such expenditures. The Tribunal found that the revisionary action lacked merit as the issues were adequately addressed by the assessee, causing no prejudice to revenue. The Tribunal emphasized that the revision was unwarranted based on settled legal principles. Issue 3: Consideration of depreciation and EPF deposit The Tribunal scrutinized the grounds for revising the assessment order, focusing on the depreciation charge and EPF deposit. It observed that the assessee's actions regarding depreciation and EPF were in compliance with legal requirements and judicial decisions. The Tribunal highlighted that the EPF deposit made before the due date did not warrant disallowance. By referencing relevant case laws, the Tribunal concluded that the Principal CIT's decision to revise the order was unjustified, as it did not align with established legal principles. Consequently, the Tribunal quashed the impugned order, emphasizing the lack of revenue prejudice in the assessed matters. In conclusion, the Appellate Tribunal allowed the appeal filed by the assessee, emphasizing the adherence to legal principles and lack of revenue impact in the disputed issues related to depreciation and EPF deposit.
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