Case Law Details

Case Name : Reliance Industries Ltd. Vs PCIT (ITAT Mumbai)
Appeal Number : I.T.A. No. 578/Mum/2021
Date of Judgement/Order : 01/09/2021
Related Assessment Year : 2011-12

Reliance Industries Ltd. Vs PCIT (ITAT Mumbai)

Upon perusal of assessment order under consideration, it is quite evident that an order was passed by Ld. AO u/s 143(3) r.w.s. 147 of the Act. One of the reasons to reopen the case was the allegation of Ld. AO that income from assets given on lease, though offered to tax under normal provisions, was not routed through Profit & Loss Account which has led to short-computation of Book Profits under MAT provisions. However, the assessee well explained the fact that the accounting treatment given by the assessee was in accordance with mandatory AS-19 which mandate the assessee to reflect investment in asset under finance lease as ‘Lease Receivable’ in Balance Sheet on asset side under the head ‘Loans & Advances’. Whenever, the installment was received, the principal component was to be reduced from that head and the same was not to be routed through profit & Loss Account. This practice was being followed consistently over various years. Therefore, since the income was not to be routed through Profit & Loss Account, the same was not added back to the Book Profits under MAT provisions as per the decision of Hon’ble Supreme Court in Apollo Tyres Ltd (255 ITR 273) as affirmed in the case of Malayala Manorama Co. Ltd (300 ITR 251). Upon perusal of assessment order, it could be seen that the case was reopened for various specific reasons, one of which was the fact that income from lease assets was not added in Book Profits. However, no such adjustment has finally been made in the assessment order. Pertinently, Ld.AO, in para-7, observed that on the remaining issues, the submissions made by the assessee are considered and accepted on the basis of merit of the issues and stand taken by the department in earlier years. Therefore, it could very well be said that Ld.AO duly applied his mind to the issue under consideration and took a possible view in the matter which is not contrary to law. Therefore, the observation of Ld. Pr. CIT that Ld. AO did not applied his mind to the issue, is without much substance. Merely because similar adjustment was made in subsequent years, the same would not lead to a conclusion that the orders passed in earlier years would require revision unless it was shown that the order was erroneous as well as prejudicial to the interest of the revenue. In the present case, we find that the issue was duly considered by Ld. AO after considering assessee’s detailed submissions. The view could not be said to be unsustainable view and it was one of the possible view. Therefore, on the given facts and circumstances, we find that the subject matter of proposed revision was already deliberated upon by Ld. AO and a possible was taken in the matter. That view could not be said to be contrary to law, perverse or unsustainable in law, in any manner and the same would be a possible view keeping in mind the assessee’s submissions during reassessment proceedings. This being the case, the assessment order could not be subjected to revision u/s 263 and the action of Ld. Pr.CIT in invoking jurisdiction u/s 263 could not be sustained in the eyes of law. Similar is the view of the Tribunal in assessee’s group concern i.e. M/s Reliance Corporate IT Park Ltd. V/s Pr. CIT (ITA No.2748/Mum/2015 dated 08/03/2017) wherein it has been observed by the coordinate bench that when Ld. AO had applied his mind on the given facts and material on record and took a possible view then such an assessment order could not be cancelled u/s 263 unless it was shown that the view was not tenable either in law or on facts.

This being the case, the assessment order could not be subjected to revision u/s 263, and the action of Ld. Pr. CIT in invoking jurisdiction u/s 263 could not be sustained in the eyes of law.

FULL TEXT OF THE ORDER OF ITAT MUMBAI

1.1 As per the provisions of Section 263 of Income Tax Act, 1961, the revenue authorities namely Pr. Commissioner of Income Tax / Commissioner of Income Tax is vested with the supervisory powers of suo-moto revision of any order passed by the Assessing Officer [AO]. For the said purpose, the appropriate authority may call for and examine the record of any proceedings under the Act and may proceed to revise the same provided two conditions are satisfied-(i) the order of the assessing officer sought to be revised is erroneous; and (ii) it is prejudicial to the interest of the revenue. If one of the condition is absent i.e. if the order of the Income-tax Officer is erroneous but is not prejudicial to the revenue or if it is not erroneous but it is prejudicial to the revenue – recourse cannot be had to Section 263 of the Act as held by Hon’ble Supreme Court in Malabar Industrial Co. Ltd. V/s CIT [243 ITR 83 10/02/2000] & noted by Hon’ble Delhi High Court in CIT V/s Vikas Polymers [194 Taxman 57 16/08/2010]. The Hon’ble Supreme Court in Malabar Industrial Co. Ltd. V/s CIT (supra) has held that the phrase ‘prejudicial to the interests of the revenue’ has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interest of the revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income-tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the revenue, unless the view taken by the Income-tax Officer is unsustainable in law. The said principal has been reiterated by Hon’ble Court in its subsequent judgment titled as CIT V/s Max India Ltd. (295 ITR 282). Similar principal has been followed by jurisdictional High Court in Grasim Industries Ltd. V/s CIT (321 ITR 92).

1.2 The Hon’ble Delhi High Court in CIT V/s Vikas Polymers (supra), further observed that as regards the scope and ambit of the expression “erroneous”, Hon’ble Bombay High Court in CIT vs. Gabriel India Ltd. [1993 203 ITR 108 (Bombay)], held with reference to Black’s Law Dictionary that an “erroneous judgment” means “one rendered according to course and practice of Court, but contrary to law, upon mistaken view of law; or upon erroneous application of legal principles” and thus it is clear that an order cannot be termed as “erroneous” unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as “erroneous” by the Commissioner simply because, according to him, the order should have been written differently or more elaborately. The Section does not visualize the substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is not in accordance with law.

1.3 Further, any and every erroneous order cannot be the subject matter of revision because the second requirement also must be fulfilled. There must be material on record to show that tax which was lawfully leviable has not been imposed as held in Gabriel India Ltd.(supra). However, the expression “prejudicial to the interest of the revenue”, as held by the Supreme Court in the Malabar Industrial Co. Ltd. case, is not an expression of art and is not defined in the Act and, therefore, must be understood in its ordinary meaning. It is of wide import and is not confined to the loss of tax as held in various judicial pronouncements. At the same time, the words “prejudicial to the interest of the revenue”, as observed in Dawjee Dadabhoy and Co. vs. S.P. Jain, (1957) 311 ITR 872 (Calcutta), can only mean that “the orders of assessment challenged are such as are not in accordance with law, in consequence whereof the lawful revenue due to the State has not been realized or cannot be realized.” Thus, the Commissioner’s exercise of revisional jurisdiction under the provisions of Section 263 cannot be based on whims or caprice. It is trite law that it is a quasi-judicial power hedged in with limitation and not an unbridled and unchartered arbitrary power. The exercise of the power is limited to cases where the Commissioner on examining the records comes to the conclusion that the earlier finding of the Income-tax Officer was erroneous and prejudicial to the interest of the revenue and that fresh determination of the case is warranted. There must be material to justify the Commissioner’s finding that the order of the assessment was erroneous insofar as it was prejudicial to the interest of the revenue.

1.4 The Hon’ble Delhi Court, in the cited decision, further observed that there is a fine though subtle distinction between “lack of inquiry” and “inadequate inquiry”. It is only in cases of “lack of inquiry” that the Commissioner is empowered to exercise his revisional powers by calling for and examining the records of any proceedings under the Act and passing orders thereon. In Gabriel India Ltd. (supra), it was expressly observed: –

“The Commissioner cannot initiate proceedings with a view to starting fishing and roving enquiries in matters or orders which are already concluded. Such action will be against the well-accepted policy of law that there must be a point of finality in all legal proceedings, that stale issues should not be reactivated beyond a particular stage and that lapse of time must induce repose in and set at rest judicial and quasi-judicial controversies as it must in other spheres of human activity [Parashuram  Pottery Works Co. Ltd. vs. ITO, (1977) 106 ITR 1 (SC)].

It was further observed as under: –

“From the aforesaid definitions as it is clear that an order cannot be termed as erroneous unless it is not in accordance with law. If an Income-tax Officer acting in accordance with law makes a certain assessment, the same cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately. This section does not visualize a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous. Cases may be visualized where the Income-tax Officer while making an assessment examines the accounts, makes enquiries, applies his mind to the facts and circumstances of the case and determines the income either by accepting the accounts or by making some estimate himself. The Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side and left to the commissioner he would have estimated the income at a figure higher than the one determined by the Income-tax Officer. That would not vest the Commissioner with power to re-examine the accounts and determine the income himself at a higher figure. It is because the Income-tax Officer has exercised the quasi-judicial power vested in him in accordance with law and arrived at conclusion and such a conclusion cannot be termed to be erroneous simply because the Commissioner does not feel satisfied with the conclusion.

x x x x

There must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed.

1.5 The Hon’ble Supreme Court in CIT V/s Amitabh Bachchan (69 Taxmann.com 170 11/05/2016) held that the power of appeal and revision is contained in Chapter XX of the Act which includes section 263 that confers suo-motu power of revision in the Commissioner. The different shades of power conferred on different authorities under the Act has to be exercised within the areas specifically delineated by the Act and the exercise of power under one provision cannot trench upon the powers available under another provision of the Act. In this regard, it must be specifically noticed that against an order of assessment, so far as the revenue is concerned, the power conferred under the Act is to reopen the concluded assessment under section 147 and/or to revise the assessment order under section 263. The scope of the power/jurisdiction under the different provisions of the Act would naturally be different. The power and jurisdiction of the revenue to deal with a concluded assessment, therefore, must be understood in the context of the provisions of the relevant sections. While doing so, it must also be borne in mind that the legislature had not vested in the revenue any specific power to question an order of assessment by means of an appeal.

Regarding applicability of Section 263, what has to be seen is that a satisfaction that an order passed by the Authority under the Act is erroneous and prejudicial to the interest of the revenue is the basic pre­condition for exercise of jurisdiction under section 263. Both are twin conditions that have to be conjointly present. Once such satisfaction is reached, jurisdiction to exercise the power would be available subject to observance of the principles of natural justice which is implicit in the requirement cast by the section to give the assessee an opportunity of being heard. Further, there could be no doubt that so long as the view taken by the Assessing Officer is a possible view, the same ought not to be interfered with by the Commissioner under Section 263 merely on the ground that there is another possible view of the matter. Permitting exercise of revisional power in a situation where two views are possible would really amount to conferring some kind of an appellate power in the revisional authority. This is a course of action that must be desisted from. 1.6 The Hon’ble Bombay High Court in Moil Ltd. Vs. CIT [81 Taxmann.com 420] observed that if a query is raised during the assessment proceedings which was responded to by the assessee, the mere fact that the query was not dealt with in the assessment order then it would not lead to a conclusion that no mind has been applied to it and the Assessing Officer is not expected to raise more queries, if he was satisfied about the admissibility of claim on the basis of the material and the details supplied.

1.7 An Explanation-2 has been inserted by Finance Act 2015 in Section 263 with effect from 01/06/2015 to declare that order shall be deemed to be erroneous in so far as it is prejudicial to the interest of the revenue, if in the opinion of appropriate authority-(1) the order was passed without making inquiries or verifications which should have been made; (ii) the order is passed allowing any relief without inquiring into the claim; (iii) the order is not in accordance with any direction or instructions etc. issued by the Board u/s 119; or (iv) the order was not in accordance with binding judicial precedent.

2.1 Keeping in mind aforesaid principle, we proceed to adjudicate the captioned appeal. In this appeal, the assessee has challenged the validity of revisional jurisdiction u/s 263 as exercised by Ld. Pr. Commissioner of Income Tax-Mumbai-3 (Pr. CIT) for Assessment Year 2011-12 vide order dated 30/03/2021. The grounds raised by the assessee read as under: –

On the facts and in the circumstances of the case and in law, the learned Principal Commissioner of Income tax, Mumbai 3 (hereinafter referred to as PCIT-3) – Order u/s.263 of the Act is bad in law, illegal and ultra-virus

1. Erred in passing the order under section 263 of the Act, setting aside the assessment order dated 31.12.2008 passed u/s 143(3) r.w.s 147 of the Income tax Act, 1961 (Act) by holding that it is erroneous and prejudicial to the interest of the revenue;

2. Failed to appreciate that the assessment order was neither erroneous nor prejudicial to the interest of the revenue and thus order u/s 263 is bad in law, illegal, ultra-virus, in excess of and/or in want of jurisdiction and otherwise void;

3. Erred in holding that AO has not applied his mind on the issue under consideration of taxability of principal component of lease rent without appreciating that said issue was one of the reasons for reopening of the assessment and for which specific query was raised in the assessment proceedings and all relevant details in response thereof was filed;

Taxability of principal component of lease rent of Rs.24,97,13,828/- under section 115JB of the Income Tax Act

4. Erred in holding that principal component of lease rent of Rs.24,97,13,828 is liable to tax under section 115JB of the Income Tax Act, though same was not routed through the Profit and Loss Account;

As evident, the assessee has contested the validity of revisional jurisdiction u/s 263 as exercised by Ld. Pr. CIT on the ground that there was no error in the order and the conditions of Sec.263 were not fulfilled. The assessee being resident corporate assessee is stated to be engaged in the business of manufacturing / trading of petrochemicals, polyester, fiber intermediates textiles, generation and distribution of power, operation of jetties, making investment etc.

2.2 The material facts are that an assessment for the year under consideration was framed by Ld. AO u/s 143(3) r.w.s. 147 of the Act on 31/12/2018. The original return of income filed by the assessee was already scrutinized u/s 143(3) on 28/04/2015. However, the case was reopened for various reasons. One of the reasons to reopen the assessment, as enumerated in para-3 of assessment order, was as follows: –

7. Para 8

It is observed from the record that assessee company had not routed the interest of Rs.30,94,61,521/- received on the refund of Income Tax & income from assets given on lease of Rs.24,97,13,828/- through P&L A/c, though, this income is offered to tax under income computed under normal provision of the Act. However, in view of decision of Hon’ble ITAT in the case of M/s. Avada Trading Company Ltd (100 ITO 131), interest granted to the assessee under section 244A is assessable in the year in which refund is actually received by the assessee.

2.3 During reassessment proceedings, the assessee submitted that lease rental had two parts viz. (i) interest portion of Rs.577.69 Lacs which was already credited to Profit & Loss Account & (ii) Principal portion of Rs.2497.13 Lacs which was deducted from the value of ‘Lease Receivable’ as reflected on asset side of the Balance Sheet and not routed through Profit & Loss Account.

The said accounting treatment was stated to be in accordance with Accounting Standard-19 (AS-19) issued by The Institute of Chartered Accountants of India (ICAI) dealing with ‘Accounting Treatment of Leased Assets’. The said AS-19 was stated to have come into effect from 01/04/2001 and the assessee was mandatorily required to follow the same. It was further submitted that lease term was for major part of the economic life of the asset and it was a case of finance lease. As per AS-19, the assessee as a lessor was to recognize such asset in its Balance Sheet as ‘lease receivable’ under the head loans and advances which would be at an amount equal to the net investment in the lease. Whenever lease installments were received, the principal portion of lease rent received was to be reduced from ‘Lease Receivable’. Since the aforesaid treatment was in accordance with mandatory AS-9 and therefore, the principal portion was not routed through Profit & Loss Account. However, interest portion of lease rent was credited to Profit and Loss Account and the same was offered to tax while computing income under normal provisions as well as while computing Book Profits under MAT Provisions. On the other hand, since no fixed asset was appearing in the books of the assessee (based on AS-19), no depreciation was claimed in the books of the assessee and therefore the principal portion of lease rent was not considered for computing Book Profits u/s 115JB of the Act. The principal component of lease rent was reduced from the total lease rent receivable appearing in the Balance Sheet under the head “Loans and Advances” and therefore the same was not credited to Profit and Loss Account and hence not considered for book profits u/s 115JB of the Act.

It was further submitted that for computing income under normal provisions, the assessee being lessor was entitled to claim depreciation in terms of CBDT Circular No.2/2001 dated 09/02/2001 and consequently, principal component of lease rent was also offered to tax while computing Income under normal provisions.

Since the accounting of lease rent was in accordance with AS-19 and consequently was in accordance with Schedule VI of the erstwhile Companies Act, 1956, no adjustment was made to book profits computed u/s 115JB of the Act. Reliance was placed on the decision of Hon’ble Supreme Court in the case of Apollo Tyres Ltd (255 ITR 273) as affirmed in the case of Malayala Manorama Co. Ltd (300 ITR 251), for the submissions that the Assessing Officer could not go beyond the Profit and loss Account except to the extent of adjustment as enumerated in explanation to section 115JB of the Act.

2.4 It is evident from assessment order that though the case was reopened for multiple reasons, however, Ld.AO chose to make additions only against few reasons with following concluding observations: –

7. It is to be noted that on the remaining issues, the submissions made by the assessee are considered and accepted on the basis of merit of the issues and stand taken by the department in earlier years.

Upon perusal of assessment order, it could be gathered that the assessee’s explanation qua lease was accepted by Ld. AO and no such adjustment of principal component of lease assets have finally been made while computing Book Profits u/s 115JB. At the same time, from the above observations, it could also be concluded that Ld.AO applied his mind to the issue and after considering assessee’s submissions, accepted the stand of the assessee on merits and chose not to disturb Book Profits u/s 115JB on this account.

Invocation of Revisional Jurisdiction u/s 263

3.1 Subsequently, Ld. Pr.CIT, after perusal of case records, sought revision of this order on the ground that though the lease rental was offered to tax under normal provisions, however, it was not offered to tax while computing Book Profits u/s115JB. Therefore, the Book Profits were short computed to the extent of Rs.2497.13 Lacs. Accordingly, a show-cause notice was issued to the assessee on 18/03/2020 proposing to set aside / cancel the order, on this issue.

3.2 In response, the assessee reiterated its stand that the accounting treatment was in accordance with mandatory AS-19. The assessee consistently followed this accounting practice over the years in accordance with AS-19. The assessee also drew attention to the fact that Ld.AO accepted the issue on merits and applied his mind on the basis on the issue and found that no income had escaped assessment. The view taken by Ld. AO was one of the possible view and therefore, the revision was not valid as per the decision of Hon’ble Supreme Court in Malabar Industries Co. Ltd. (243 ITR 83). The attention was also drawn to the fact that similar adjustment was proposed by way of rectification u/s 154 by Ld. AO for immediately preceding AY 2010-11 vide rectification notice dated 21/05/2017. However, after considering the submissions of the assessee, Ld.AO, vide order dated 30/11/2018, accepted the accounting treatment of lease income as adopted by the assessee and again decided not to make any such adjustment to the Book profit on the very same issue. Reliance was also placed on the decision of Tribunal in the case of group concern M/s Reliance Corporate IT Park (ITA No.2748/Mum/2015 order dated 08/03/2017) wherein it was held that once a particular view was taken which was a possible view then unless it is shown that the view is not tenable either in law or on facts, the assessment order could not be cancelled u/s 263.

However, not concurring with aforesaid submissions, Ld. Pr. CIT, directed Ld. AO to redo the assessment, in this respect, with following observations: –

5. I have considered the submission of the assessee and facts of the case. The assessee has firstly argued that the assessing officer had completed re-assessment after making relevant enquiries and considering the details and explanation submitted. Therefore, revision u/s 263 is not warranted. It is true, that when the assessing officer issued notice u/s 148, the issue of non-inclusion of the principal component of lease rent was among the reasons recorded. It is also true that the assessee had made a submission on this point and finally in order dated 31.12.2018 passed u/s 143(3) r.w.s. 147, the assessing officer did not make addition on this point. However, perusal of assessment records does not show any reasoning behind the decision of the assessing officer on the point. Though the assessee had filed a submission in the matter, the assessing officer did not make any further query on the same. There is nothing on record such as order sheet entry, any noting or office note indicating that the assessing officer had indeed applied his mind on the issue. It would not be out of place to mention here that in the assessments for A.Y. 2012-13 and A.Y.2013-14 completed on 30.12.2019, the assessing officer did make addition in respect of the same point under identical set of facts and circumstances. The ground for addition in those assessment years, as stated by the assessing officer is, that the assessee itself considers the principal component as income under normal computation and the same would be in nature as defined under section 2(24) of Act and hence should have been part of book profit.

5.1. It may be stressed here, that in principle, even the assessee agrees that the principal component of lease rent is part of its income. The same is clear from its computation of income under normal computation. However, it is not routing this income through P & L account by taking shelter behind AS-19. However, it may be mentioned, that as per the provisions of section 115JB, statement of Profit and loss account is required to be prepared in accordance with schedule III of the Companies Act, 2013. If one goes through the said schedule, it becomes clear that a company is expected to include all its income, whether operational or other income on credit side of P & L account. This being the position, there is no justification for not including principal component of lease rent, which is undisputedly in nature of income, in book profit.

5.2. It is thus clear, that the assessing officer had, after obtaining reply from the assessee on the aforesaid point did not properly apply his mind thereto, the order passed by him become erroneous and prejudicial to the interest of revenue. It has been held, by Hon’ble High Court of Calcutta in the case of Rajmandir Estates P. Ltd. Vs. PrCIT-Kolkata -III [2016] 386 ITR 162(Cal.) that where assessing officer had, after obtaining details by way of notice u/s 142(1) did not apply his mind thereto, the order passed by him become erroneous and prejudicial to the interest of revenue.

5.3. The case laws cited by the assessee do not assist it because those relate to the situation, where the assessing officer had taken one of two possible tenable views, whereas in the instant case, the view taken by the assessing officer was not a tenable one on facts of the case.

6. Considering all the facts as narrated above, hold the order 143(3) rws 147 of the Income Tax Act, 1961 dated 31.12.2018 to be erroneous and prejudicial to the interest of revenue.

7. In view of the above facts, the assessment order u/s 143(3) rws 147 of the Income Tax Act, 1961 dated 31.12.2018 is set-aside with a direction to the assessing officer to make fresh assessment after conducting detailed verification of issue discussed above. The assessing officer is directed to grant sufficient opportunity to the assessee of being heard and examine and consider the submissions which the assessee may wish to make including its alternative claim of being allowed depreciation on leased-assets in computing book profit and thereafter decide the issue on merits and complete the assessment in accordance with law.

Aggrieved, the assessee is in further appeal before us.

Our findings and Adjudication

4. We have carefully considered the factual matrix as well as arguments advances by both the representatives. Our adjudication to the issue, in the light of settled legal position as enumerated in opening paragraphs, would be as given in succeeding paragraphs.

5. Upon perusal of assessment order under consideration, it is quite evident that an order was passed by Ld. AO u/s 143(3) r.w.s. 147 of the Act. One of the reasons to reopen the case was the allegation of Ld. AO that income from assets given on lease, though offered to tax under normal provisions, was not routed through Profit & Loss Account which has led to short-computation of Book Profits under MAT provisions. However, the assessee well explained the fact that the accounting treatment given by the assessee was in accordance with mandatory AS-19 which mandate the assessee to reflect investment in asset under finance lease as ‘Lease Receivable’ in Balance Sheet on asset side under the head ‘Loans & Advances’. Whenever, the installment was received, the principal component was to be reduced from that head and the same was not to be routed through profit & Loss Account. This practice was being followed consistently over various years. Therefore, since the income was not to be routed through Profit & Loss Account, the same was not added back to the Book Profits under MAT provisions as per the decision of Hon’ble Supreme Court in Apollo Tyres Ltd (255 ITR 273) as affirmed in the case of Malayala Manorama Co. Ltd (300 ITR 251). Upon perusal of assessment order, it could be seen that the case was reopened for various specific reasons, one of which was the fact that income from lease assets was not added in Book Profits. However, no such adjustment has finally been made in the assessment order. Pertinently, Ld.AO, in para-7, observed that on the remaining issues, the submissions made by the assessee are considered and accepted on the basis of merit of the issues and stand taken by the department in earlier years. Therefore, it could very well be said that Ld.AO duly applied his mind to the issue under consideration and took a possible view in the matter which is not contrary to law. Therefore, the observation of Ld. Pr. CIT that Ld. AO did not applied his mind to the issue, is without much substance. Merely because similar adjustment was made in subsequent years, the same would not lead to a conclusion that the orders passed in earlier years would require revision unless it was shown that the order was erroneous as well as prejudicial to the interest of the revenue. In the present case, we find that the issue was duly considered by Ld. AO after considering assessee’s detailed submissions. The view could not be said to be unsustainable view and it was one of the possible view. Therefore, on the given facts and circumstances, we find that the subject matter of proposed revision was already deliberated upon by Ld. AO and a possible was taken in the matter. That view could not be said to be contrary to law, perverse or unsustainable in law, in any manner and the same would be a possible view keeping in mind the assessee’s submissions during reassessment proceedings. This being the case, the assessment order could not be subjected to revision u/s 263 and the action of Ld. Pr.CIT in invoking jurisdiction u/s 263 could not be sustained in the eyes of law. Similar is the view of the Tribunal in assessee’s group concern i.e. M/s Reliance Corporate IT Park Ltd. V/s Pr. CIT (ITA No.2748/Mum/2015 dated 08/03/2017) wherein it has been observed by the coordinate bench that when Ld. AO had applied his mind on the given facts and material on record and took a possible view then such an assessment order could not be cancelled u/s 263 unless it was shown that the view was not tenable either in law or on facts.

6. The Ld. CIT-DR has relied upon the decision of Hon’ble Allahabad High Court in the case of CIT V/s Bhagwan Dass (272 ITR 367) which is a case wherein it was held that the order was passed without application of mind by Ld. AO. The same is not the case here. The case law of Chennai Tribunal in Bharat Overseas Bank V/s CIT (152 TTJ 546) was a similar case wherein no inquiry was made by Ld.AO during the course of assessment proceedings. Therefore, these case laws are distinguishable on facts and not applicable to the facts of the present case.

7. Finally, on the facts and circumstances of the case, we quash the order passed by Ld. Pr. CIT in terms of settled legal position as enumerated by us in opening paragraphs. Ground nos. 1 to 3 stands allowed which render adjudication of ground no.4 merely academic in nature.

8. The appeal stands allowed in terms of our above order.

Order pronounced on 1st September, 2021.

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