United India Insurance Co. Limited Vs PCIT (ITAT Chennai)
The assessee appealed before the Income Tax Appellate Tribunal (ITAT), Chennai, against the order passed by the Principal Commissioner of Income Tax (PCIT) under Section 263 of the Income Tax Act for Assessment Year (AY) 2020-21. The PCIT had revised the assessment on the grounds that the Assessing Officer (AO) had failed to conduct adequate enquiry regarding (i) prior period expenditure of ₹14,20,76,396, (ii) Corporate Social Responsibility (CSR) expenditure, and (iii) interest paid under Sections 201(1A)/206C for delayed remittance of TDS/TCS.
The assessee had originally filed its return declaring nil income under the normal provisions of the Act and a current year loss. The assessment was completed under Section 143(3) read with Section 144B after making various additions. Subsequently, the PCIT examined the assessment records and observed that the AO had not carried out enquiries or verification on the three issues mentioned above. Invoking Explanation 2(a) to Section 263, the PCIT held that the assessment order was erroneous and prejudicial to the interests of the Revenue and set aside the assessment on those limited issues with a direction to the AO to conduct fresh examination after providing adequate opportunity to the assessee.
