Case Law Details
Sudhir Vrundavandas Valia Vs PCIT (ITAT Mumbai)
ITAT Mumbai held that initiation of revisionary proceedings u/s 263 of the Income Tax Act justified as assessment order was passed by AO without proper inquiry and verification with regard to claim of deduction u/s. 80IA(4).
Facts- The Appellant filed return of income for the Assessment Year 2018-19 on 17/09/2018. The case of the Appellant was selected for scrutiny. AO completed the assessment accepting returned income.
Subsequently, on examination of assessment records, the PCIT noticed that one of the reasons for selection of the case of the Appellant for scrutiny was large deduction claimed by the Appellant u/s. 80IA(4)(iv) of the Act. The PCIT noticed that Form 10CCB filed by the Appellant in respect of undertaking at Nasik was unsigned. Further, as per the said Form 10CCB Assessment Year 2018-19 was the first Assessment Year of claiming deduction by the Appellant whereas the commissioning certificate filed by the Appellant was dated 04/04/2008 and was issued in the name of EMCO Ltd and this aspect had not been examined by AO. The PCIT formed a view that deduction claimed u/s. 80IA(4)(iv) of the Act was not allowable.
Conclusion- Held that the Assessment Order for the Assessment Year 2018-19 was passed by the Assessing Officer without proper inquiry and verification. On perusal of the notice issued under Section 263(1) of the Act as well as the order passed by the PCIT it is clearly discernable that the PCIT had formed a view that claim of deduction under Section 80IA(4) of the Act was allowed by the Assessing Officer without proper inquiry or verification as warranted in the facts and circumstanced of the case. In our view, the fact that the PCIT has not specifically mentioned Explanation 2 to Section 263 of the Act is of no consequence keeping in view of the fact that the PCIT had, after forming the opinion as aforesaid, proceeded to examine the issue and had concluded that the Appellant was not entitled to claim deduction under Section 80IA(4) of the Act. The PCIT also directed the Assessing Officer to not allow the claim of deduction made by the Appellant under Section 80IA(4) of the Act. While we have set aside the aforesaid direction given by the PCIT to the Assessing Officer to disallow the deduction under Section 80IA(4) of the Act, the opinion formed by the PCIT that the Assessment Order has been passed by the Assessing Officer without proper inquiry and verification as warranted, which is discernable from the notice issued under Section 263(1) of the Act and the order passed under Section 263 of the Act, continues to hold good.
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