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TMI Blog2016 (2) TMI 1071X X X X Extracts X X X X X X X X Extracts X X X X ..... rs was "quite unwell" which resulted into the delay in attending the pending work. Considering the affidavit and the case laws cited, we hereby deem it proper to condone the delay and admit this appeal to be decided on merits. 3. The observation of the learned Commissioner was that an assessment u/s 143(3) was completed on 30th of December, 2011. The assessee had claimed an expenditure of Rs. 542.11 lakhs which was towards Corporate Social Responsibility (CSR). As per learned Commissioner, the said expenditure was not eligible for deduction. It was also alleged that the AO had made no enquiry as regards the nature of expenditure. Due to the said reason it was held that the order passed u/s 143(3) was an erroneous order as well as prejudicial to the interest of the Revenue. In compliance of show cause notice, the assessee submitted as under : "3. In the written submission, it has been submitted by the Ld. AR that the assessee company is engaged in the business of excavating manganese ore from the mines and in the manufacture of value added products like electrolytic manganese dioxide and ferro manganese. Its mines are situated in rural areas and there are no facilities/amenities ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rred lo in Sec. 28 i.e. incorne assessable under the head' profits and gains of business and profession' shall be computed in accordance with the provisions contained in Section 30 to '13D. Out of these Sections, Sections 30 to Sec. 36 relate to deductions allowable to the assessee for computing the business income. The expenses relating to CSR do not fall in any of the Section from Sec. 30 to Sec. 36. At the most, the expenditure on (SR can fall under the provisions contained III Section 37 or the LT. Acl. 5. Section 37 relates to the expenditure which IS not in the nature of capital expenditure nd personal expenses of the assessee and is laid out or expended wholly and exclusively by assessee for its business. Ihererore, before allowlflg the deduction on accounl of expenses debited under- the held (SR, the AO was required to see whether the expenses so claimed fall within the purview of Section 37 or not. However, no such exercise was done by the AO while completing the assessment u/s 143(3). The said exercise was all the more necessary keeping in view the nature of expenses debited by the assessee under the head CSR. The details of such expenses were provided by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the assessee under the head 'Corporate Social Responsibility'. Needless to say, the assessee should be provided with sufficient opportunity to explain its case. " 4. From the side of the appellant learned A.R. Mr. K.P. Dewani appeared and pleaded that the details of CSR activities were duly furnished before the AO. The assessment was not completed in a summary manner but the case was scrutinized u/s 143(3) of the I.T. Act. The AO has duly examined the accounts of the assessee and made certain disallowances as is evident from the assessment order. According to the learned A.R., it was wrong on the part of the learned Commissioner to presume that the expenditure in question was not examined by the AO. Only after examination the AO was satisfied to allow the same. For this argument he has placed reliance on the following decisions : 1. Vodafone Essar South Ltd. vs. CIT (2011) 141 TTJ 0084 (Del). 2. Gupta International vs. ITO (2010) 2 ITR 0428 (Del.). 4.1 On the merits, learned A.R. has pleaded that the said expenditure was incurred in pursuance to the direction of the Government because the assessee company is a Government owned company. It was mandatory to follow t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... roneous order. An erroneous order may be by mistake or due to ignorance, but it makes little difference for what reason the order is passed by the lower authorities so long as it is prejudicial to the interest of the Revenue. This jurisdiction can be exercised in such cases when assessment order is passed on a wrong assumption of facts, or an incorrect application of mind or without due application of mind and so forth. Therefore, the provisions of section 263 empower the Commissioner, inter alia to call for the record and if necessary to revise any order passed if in his considered opinion the order in question is causing prejudice to the interest of the Revenue. In this case the assessee has tried to demonstrate that a notice u/s 142(1) was issued raising queries about the nature of business of the assessee and also there was a query about the expenditure incurred on CSR. In our considered opinion, it was a questioner issued u/s 142(1) of I.T. Act which was very much general in nature. Although a query was raised but in compliance of a general notice a general reply was forwarded to the AO. We have also examined the reply and particularly the answer furnished in compliance of the ..... X X X X Extracts X X X X X X X X Extracts X X X X
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