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2022 (12) TMI 756 - AT - Income TaxRevision u/s 263 by CIT - default claiming deduction u/s 80IC claimed as assessee had not filed 10CCB in support of the claim during the course of assessment proceeding - HELD THAT - We are unable to find any such document on record which could show that this issue regarding deduction of claim u/s 80IC of the Act before the AO was examined. PCIT has rightly held that the order of the ld. AO u/s 143(3) of the Act is erroneous and prejudicial to the interest of revenue. We, therefore, find no infirmity in the impugned order passed u/s 263 of the Act by the ld. PCIT setting aside the assessment order and directing the AO to frame the assessment afresh after considering the observations made in the impugned order. Thus the grounds of appeal raised by the assessee are dismissed.
Issues Involved:
1. Jurisdiction under Section 263 of the Income-tax Act, 1961. 2. Validity of the order passed under Section 263. 3. Examination of the deduction claim under Section 80IC. 4. Adequacy of the assessment order under Section 143(3). Issue-wise Detailed Analysis: 1. Jurisdiction under Section 263 of the Income-tax Act, 1961: The Principal Commissioner of Income Tax (Pr. CIT) invoked the jurisdiction under Section 263, which allows revision of orders prejudicial to the interest of revenue. The assessee challenged this invocation, arguing that the Pr. CIT erred in law and fact by not providing specific directions to the Assessing Officer (AO) as required by Explanation 2(c) of Section 263. The Tribunal found that the Pr. CIT had validly invoked the jurisdiction under Section 263, as the AO had failed to make necessary inquiries during the assessment, rendering the order erroneous and prejudicial to the interest of revenue. 2. Validity of the order passed under Section 263: The assessee contended that the Pr. CIT's order under Section 263 was invalid as it was based on issues not raised in the show cause notice and was self-contradictory. The Tribunal noted that the Pr. CIT had identified the lack of verification by the AO regarding the substantial expansion claim under Section 80IC. This failure to verify justified the invocation of Section 263, making the order valid and not self-contradictory. 3. Examination of the deduction claim under Section 80IC: The Pr. CIT observed that the assessee claimed a deduction of Rs. 1,39,56,248.58 under Section 80IC for substantial expansion but did not file Form 10CCB during the assessment. The assessee argued that the deduction was valid due to substantial expansion and that the AO had accepted similar claims in previous years. However, the Tribunal found that the AO had not conducted adequate inquiries to verify the substantial expansion claim, thus justifying the Pr. CIT's direction to reassess the claim. 4. Adequacy of the assessment order under Section 143(3): The Tribunal reviewed the assessment order and found that the AO had not examined the substantial expansion claim or called for necessary documents during the assessment. The Pr. CIT's order highlighted this lack of inquiry, making the original assessment order erroneous and prejudicial to the interest of revenue. The Tribunal upheld the Pr. CIT's direction to the AO to reassess the claim with proper verification. Conclusion: The Tribunal dismissed the appeal of the assessee, upholding the Pr. CIT's order under Section 263. It concluded that the AO's failure to verify the substantial expansion claim under Section 80IC rendered the assessment order erroneous and prejudicial to the interest of revenue. The Tribunal found no infirmity in the Pr. CIT's direction to reassess the claim, ensuring compliance with the legal requirements. Order Pronounced: The appeal of the assessee was dismissed, and the order was pronounced in the open court on 15.12.2022.
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