Makson Pharma Ceuticals (India) Private Limited Vs PCIT (ITAT Ahmedabad)
Second opinion not allowed under 263: ITAT Ahmedabad quashes PCIT revision on depreciation, 14A & CSR-80G
Ahmedabad ITAT allowed the Assessee’s appeal and quashed the revision order passed u/s 263, holding that the PCIT had merely substituted his own view for that of the Assessing Officer, which is impermissible in law.
The PCIT had set aside the assessment u/s 143(3) r.w.s. 144B alleging lack of enquiry on four issues—(i) excess depreciation on residential building, (ii) excess depreciation on plant & machinery due to non-reduction of additional depreciation, (iii) non-disallowance u/s 14A r.w.s. Rule 8D, and (iv) allowability of deduction u/s 80G in respect of CSR expenditure—and directed a de-novo assessment.
The Tribunal found that all these issues were specifically examined by the AO during scrutiny, and explanations were duly furnished by the Assessee. On depreciation and section 14A, the ITAT noted that the same issues had arisen in the Assessee’s own case for AY 2018-19, where a similar revision u/s 263 was already quashed by the Tribunal, and the PCIT could not reopen concluded matters on identical facts.
On the CSR-80G issue, the ITAT held that the AO had raised a query u/s 142(1), the Assessee had responded, and merely because the AO did not record an elaborate discussion in the assessment order, it could not be said that there was lack of enquiry. The PCIT’s action was thus held to be a pure second opinion, outside the scope of section 263.
Holding that the twin conditions of “erroneous” and “prejudicial to the interest of Revenue” were not satisfied, the Tribunal quashed the 263 order in entirety. The appeal was accordingly allowed
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
