Adani Infrastructure and Developers Private Limited Vs PCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that assessment order passed u/s. 143(3) is neither erroneous nor prejudicial to the interest of revenue. Hence, revisionary jurisdiction u/s. 263 of the Income Tax Act not justifiable as twin pre-conditions not satisfied.
Facts- The assessment order in this case has been passed by the Income- tax Department, National e-assessment Centre, Delhi u/s 143(3) r.w.s. 143(3A) & 143(3B) of the Act on 16.04.2021 determining the total loss of Rs.35,36,60,186/- against the returned income of Rs.(-) 35,46,83,225/-. Subsequently, the Ld. PCIT had assumed revisionary jurisdiction u/s 263 of the Act. Aggrieved by the order of the Ld. PCIT, the assessee is now in appeal before the Tribunal.
Conclusion- Held that that the compensation expenses of Rs. 60 lakhs paid in year under consideration is on account of contractual payment and not on account of any violation of any law and hence, no disallowance in this regard is warranted under the provisions of the Act. Since no disallowance is warranted as enumerated above, the assessment order passed u/s 143(3) of the Act by Assessing Officer can neither be held as ‘erroneous’ nor ‘prejudicial or fatal to the interest of revenue’. We find that the Assessing Officer has also examined the issue during the assessment proceedings as found in the notice issued u/s 142(1) of the Act. Therefore, twin pre-conditions to assume revisionary jurisdiction u/s 263 of the Act are not satisfied in the issue on hand.
