Bajaj Auto Ltd. Vs PCIT (ITAT Mumbai)
Section 263 Invoked on “Inadequate Enquiry” Set Aside: ITAT Mumbai Quashes PCIT’s Revision in Bajaj Auto Ltd. Case
Summary: The Mumbai Bench of the ITAT allowed the appeal of Bajaj Auto Ltd. and quashed the revisionary order passed under section 263 by the Principal Commissioner of Income Tax for AY 2019-20, holding that the assumption of jurisdiction was unsustainable in law.
The PCIT had invoked section 263 on the ground that the assessment order passed under section 143(3) read with section 144C(3) was erroneous and prejudicial to the interests of the Revenue due to alleged failure of the Assessing Officer to conduct proper enquiries on four issues, namely:
(i) allowability of year-end provisions treated as unascertained liabilities,
(ii) deduction claimed towards education cess,
(iii) non-deduction of TDS under section 194H on target, consistency and cash discounts given to spare-parts dealers, and
(iv) treatment of expenditure on dies & moulds and jigs & fixtures as revenue expenditure.
The Tribunal noted that all the issues flagged by the PCIT had been specifically examined during the original assessment proceedings, and the Assessing Officer had taken a conscious view after calling for details, considering explanations, and following binding judicial precedents, including decisions in the assessee’s own case. The ITAT reiterated that section 263 cannot be invoked merely because the PCIT believes that further or deeper enquiry should have been conducted, and that “inadequate enquiry” is not equivalent to “lack of enquiry”, relying on settled law laid down in Malabar Industrial Co. Ltd. and Gabriel India Ltd.
