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TMI Blog2025 (2) TMI 986X X X X Extracts X X X X X X X X Extracts X X X X ..... rofit under Section 115-JB, AO did not state any reason as to why he decided, if at all, to accept the explanation of the assessee despite the fact that the said amount was not debited for the provision for doubtful account and consequently, the provision of doubtful debts account has not been obliterated. Thus, it is only for disclosure purposes that the amount was shown as a reduction from the trade receivables in the balance sheet. The assessee has not included the said amount as written off debts, but was hopeful of getting it back at some point of time. Viewed in the above perspective, we cannot find fault with the Principal Commissioner of Income Tax for having exercised his jurisdiction under Section 263 of the Income Tax Act, 1961. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 1. Since the tax payable under the regular provisions of the Act was lower and the appellant had claimed deduction under Section 80-IA of the Act in respect of the eligible activity of operating and maintaining the Airport, which is an infrastructure facility, it filed a revised return on 4.12.2013 declaring a taxable income of Rs. 11,88,92,410/-. The return was selected for scrutiny under Section 143(3) of the Income Tax Act, 1961 and was completed by order dated 27.3.2015. Since the 1st respondent-Department did not accept the claim of deduction under Section 80-IA and also made various other disallowances, the appellant preferred appeal against the order and the same is stated to be pending. During the said financial year, the appellant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ne the issue. Aggrieved by the order, the appellant preferred an appeal before the Income Tax Appellate Tribunal, which was dismissed by order dated 15.3.2018, which is impugned in the present appeal. While the appeal was pending, the assessing authority passed revised orders of assessment under Section 143 of the Income Tax Act, 1961 on 21.2.2017 disallowing the deduction of the claim of doubtful debts amounting to Rs. 1,00,33,280/-. It is stated that the order is also under challenge in a separate appeal preferred before the Tribunal. In the appeal before us, the assessee has raised the following questions of law, for our consideration: "i. Whether on the facts and in the circumstances of the case the Appellate Tribunal is right in hold ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) 15 SCC 401] to contend that when there are two views possible and the income tax officer had taken one view, it cannot be treated as an erroneous order prejudicial to the interest of the Revenue and that the said order cannot be revised by exercising the power under Section 263 of the Income Tax Act, 1961. 5. On the other hand, the learned Senior Standing Counsel appearing for the 1 st respondent-Department contended that though a provision for bad debts was made in the profit and loss account, the same is not seen obliterated. He further pointed out that even in the profit and loss account, especially clause 2.15.1, it is specifically stated by the appellant that the Company is hopeful of recovering the aforesaid amount at some point of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t, we must note that in the assessment order, the assessing officer has not stated any reason as to why the claim for deduction of Rs. 1,00,33,280/- was accepted. Therefore, the said order was palpably wrong and falls within the meaning of "error". 10. It is true that all orders, which are erroneous, are not liable to be subjected to proceedings under Section 263 of the Income Tax Act, 1961. To invoke Section 263, the Principal Commissioner of Income Tax must be satisfied that the erroneous order also causes prejudice to the Revenue. The real purport of Section 263 is to remove the prejudice caused to the Revenue by the erroneous order passed by the assessing officer and it empowers the Commissioner to initiate suo motu proceedings, when e ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or for lack of reasoning; (b) the order sought to be revised proceeds on incorrect assumption of facts and applies the law incorrectly, and (c) stereotype orders passed by the assessing officer simply accepting the version of the assessee. 13. Turning to the facts of this case, on a perusal of the order of assessment, it is evident that the assessing officer did not show any application of mind and mechanically accepted the statement of the assessee. When the assessee is found to have claimed deduction for Rs. 1,00,33,280/- towards the "provision for doubtful assets" for the purpose of computation of book profit under Section 115-JB of the Income Tax Act, 1961, the assessing officer did not state any reason as to why he decided, if at ..... X X X X Extracts X X X X X X X X Extracts X X X X
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