Loading judgment…
No AI summary yet for this case.
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
Income Tax Appellate Tribunal, MUMBAI BENCH “F” MUMBAI
Before: SHRI OM PRAKASH KANT & MS. KAVITHA RAJAGOPAL
This appeal has been preferred by the assessee against order dated 08.03.2023 passed by the Ld. Prncipal Commissioner of Income-tax-5, Mumbai (in short ‘the Ld. PCIT’) for assessment year 2018-19, raising following grounds :
1. On the facts of laws and in the circumstances of the case, the Ld. Pr. CIT erred in passing the order u/s 263 of the Income Tax Act, 1961 as the order passed w/s 143(3) by the Ld. A.O. was neither erroneous nor prejudicial to the interests of the revenue as in the assessment order, the Ld. A.O. has already disallowed the expenditure of Rs 73,54,549/- claimed by the assessee on the issue on which the show cause riotice w/s 263 was issued to the assessee.
2. On the facts of laws and in the circumstances of the case, the order 2. On the facts of laws and in the circumstances of the case, the order 2. On the facts of laws and in the circumstances of the case, the order w/s 263 passed by the Ld. Pr. CIT is bad in law and against the w/s 263 passed by the Ld. Pr. CIT is bad in law and against the w/s 263 passed by the Ld. Pr. CIT is bad in law and against the principles of natural justice as Ld. PCIT has neve principles of natural justice as Ld. PCIT has never ever raised the issue of r ever raised the issue of loans received in the show ause notice dated 04.01.2023 on the basis of loans received in the show ause notice dated 04.01.2023 on the basis of loans received in the show ause notice dated 04.01.2023 on the basis of no which the assessment order is treated as erroneous and prejudicial to no which the assessment order is treated as erroneous and prejudicial to no which the assessment order is treated as erroneous and prejudicial to the interest of the revenue. the interest of the revenue. 2. Briefly stated facts of the case are that for the ye Briefly stated facts of the case are that for the ye Briefly stated facts of the case are that for the year under consideration, the assessee filed return of income on 30.10.2018 consideration, the assessee filed return of income on 30.10.2018 consideration, the assessee filed return of income on 30.10.2018 declaring total income at Rs.( declaring total income at Rs.(-)73,54,549/-. The case of the . The case of the assessee was selected for scrutiny assessment and statutory notices assessee was selected for scrutiny assessment and statutory notices assessee was selected for scrutiny assessment and statutory notices under the Income-tax Act, 1961 (in short ‘the Act’) w tax Act, 1961 (in short ‘the Act’) w tax Act, 1961 (in short ‘the Act’) were issued and complied with. During the assessment proceedings, the Assessing complied with. During the assessment proceedings, the Assessing complied with. During the assessment proceedings, the Assessing Officer observed the exempted income of Rs.91,39,437/- received as Officer observed the exempted income of Rs.91,39,437/ Officer observed the exempted income of Rs.91,39,437/ share of profit from partnership firm share of profit from partnership firm , against investment by the investment by the assessee in equity shares and partnership fi assessee in equity shares and partnership firm amounting to rm amounting to Rs.127,25,47,388/- as on 31.03.2018 and Rs.98,38,08,250/ as on 31.03.2018 and Rs.98,38,08,250/- as on as on 31.03.2018 and Rs.98,38,08,250/ 31.03.2017 respectively. As the assessee had not made suo-moto 31.03.2017 respectively. As the assessee had not made 31.03.2017 respectively. As the assessee had not made disallowance for earning the exempted income in terms of section disallowance for earning the exempted income in terms of section disallowance for earning the exempted income in terms of section 14A of the Act, the Assessing Officer invoking Rule 8D of the 14A of the Act, the Assessing Officer invoking R 14A of the Act, the Assessing Officer invoking R Income-tax tax tax Rules, Rules, Rules, 1962 1962 1962 (in (in (in short short short ‘the ‘the ‘the Rules’) Rules’) Rules’) computed computed computed disallowance disallowance of of Rs.1,12,81,778/ Rs.1,12,81,778/-. . However, However, restricted restricted the the disallowance to the amount of Rs.73,54,549/ disallowance to the amount of Rs.73,54,549/- i.e. to the extent of i.e. to the extent of expenses claimed by the assessee in the profit and loss account. expenses claimed by the assessee in the profit and loss accoun expenses claimed by the assessee in the profit and loss accoun The breakup of the expenses claimed by the assessee in the profit The breakup of the expenses claimed by the assessee in the profit The breakup of the expenses claimed by the assessee in the profit and loss account is reproduced as under: and loss account is reproduced as under: Sr. No. Head of expenditure Amount 1. Payment to Auditor Payment to Auditor 30,000 2. Bank Charges Bank Charges 3,793 3. Filling fee Filling fee 2,400
4. Interest paid on unsecured loan Interest paid on unsecured loan 73,18,356 Total Total 73,54,549 2.1 In the assessment order passed u/s 143(3) dated 05.03.2021, In the assessment order passed u/s 143(3) dated 05.03.2021, In the assessment order passed u/s 143(3) dated 05.03.2021, the Assessing Officer disallowed the claim of the loss amounting to the Assessing Officer disallowed the claim of the loss amounting to the Assessing Officer disallowed the claim of the loss amounting to Rs.73,54,549/-.
2.2 Subsequently, the Ld. PCIT called for the assessment record Subsequently, the Ld. PCIT called for the assessment record Subsequently, the Ld. PCIT called for the assessment record and after examination observed that assessee has shown long term ination observed that assessee has shown long term ination observed that assessee has shown long term borrowing of Rs.58,12,53,048/ borrowing of Rs.58,12,53,048/- and also shown loans given to and also shown loans given to related and other parties amounting to Rs.8 related and other parties amounting to Rs.80,87,69,177/ ,87,69,177/- but no interest income from said loans interest income from said loans and advances was shown as against advances was shown as against the interest expenses of Rs.73,18,356/ xpenses of Rs.73,18,356/- claimed in the profit and claimed in the profit and loss account. According to the Ld. PCIT said interest expenses of loss account. According to the Ld. PCIT said interest expenses of loss account. According to the Ld. PCIT said interest expenses of Rs.73,18,356/- was required to be disallowed as no interest income was required to be disallowed as no interest income was required to be disallowed as no interest income was offered by the assessee was offered by the assessee against loans and advances given. loans and advances given. Accordingly, the Ld. PCIT issued notice u/s 263 of the Act on he Ld. PCIT issued notice u/s 263 of the Act on he Ld. PCIT issued notice u/s 263 of the Act on 04.01.2023 proposing as why the assessment order passed u/s 04.01.2023 proposing as why the assessment order passed u/s 04.01.2023 proposing as why the assessment order passed u/s 143(3) of the Act by the Assessing Officer not be held as erroneous 143(3) of the Act by the Assessing Officer not be held as erroneous 143(3) of the Act by the Assessing Officer not be held as erroneous in so far as prejudicial to the interest of the revenue within the in so far as prejudicial to the interest of the revenue in so far as prejudicial to the interest of the revenue meaning of section 263 of the Act. ction 263 of the Act. The assessee responded that he assessee responded that entire interest amounting to Rs.73,18,356/ entire interest amounting to Rs.73,18,356/- stands disallowed in stands disallowed in total expenses of Rs.73,54,549/ total expenses of Rs.73,54,549/- disallowed by the Assessing disallowed by the Assessing Officer in the assessment order u/s 143(3) of the Act and therefore, Officer in the assessment order u/s 143(3) of the Act and therefore, Officer in the assessment order u/s 143(3) of the Act and therefore, no separate disallowance on this account was required. The Ld. disallowance on this account was required. The Ld. disallowance on this account was required. The Ld. PCIT however rejected the contention of the assessee and held the PCIT however rejected the contention of the assessee and held the PCIT however rejected the contention of the assessee and held the order of the Assessing Officer order of the Assessing Officer is erroneous in so far as prejudicial to erroneous in so far as prejudicial to the interest of the revenue on following two counts: the interest of the revenue on following two counts:
(i) The claim of (i) The claim of interest expenses of Rs.73,18,356/- had been allowed had been allowed erroneously by the Assessing Officer. erroneously by the Assessing Officer. (ii) The Assessing Officer has not examined genuineness (ii) The Assessing Officer has not examined genuineness and (ii) The Assessing Officer has not examined genuineness and and creditworthiness creditworthiness creditworthiness of of of the the the fund fund fund borrowed borrowed borrowed for for for advancing advancing advancing loan loan loan of of of Rs.80,87,69,177/-. Rs.80,87,69,177/ 2.3 The relevant finding of the Ld. PCIT is reproduced as under: finding of the Ld. PCIT is reproduced as under: finding of the Ld. PCIT is reproduced as under:
“6. I have perused submissions filed by the assessee, relevant material I have perused submissions filed by the assessee, relevant material I have perused submissions filed by the assessee, relevant material available on record as well as the AO's reports. The assessee has available on record as well as the AO's reports. The assessee has available on record as well as the AO's reports. The assessee has produced copy of bank statement and copy of schedule Reserve and produced copy of bank statement and copy of schedule Reserve and produced copy of bank statement and copy of schedule Reserve and Surplus of Annual Report in support of claim made that during the year us of Annual Report in support of claim made that during the year us of Annual Report in support of claim made that during the year under consideration the assessee has received share of profit of Rs. under consideration the assessee has received share of profit of Rs. under consideration the assessee has received share of profit of Rs. 91,39,1371-from partnership firm namely M/s B. Vijaykumar & Co which from partnership firm namely M/s B. Vijaykumar & Co which from partnership firm namely M/s B. Vijaykumar & Co which was credited to Reserve and Surplus of Profit & Loss was credited to Reserve and Surplus of Profit & Loss Account of Balance Account of Balance- sheet. On perusal of the record it is seen that. while passing the sheet. On perusal of the record it is seen that. while passing the sheet. On perusal of the record it is seen that. while passing the assessment order, the claim of expenses of Rs. 73,18,356/ assessment order, the claim of expenses of Rs. 73,18,356/ assessment order, the claim of expenses of Rs. 73,18,356/- has been allowed by the then AO in the assessment order, However the A.O. has allowed by the then AO in the assessment order, However the A.O. has allowed by the then AO in the assessment order, However the A.O. has disallowed claim of deduction of disallowed claim of deduction of Rs. 73,54,549/- including interest of Rs. including interest of Rs. 73,18,356 u/s 14A r.w.s. 8D of the Act. 73,18,356 u/s 14A r.w.s. 8D of the Act. Further it'is seen that in respect Further it'is seen that in respect ot advance loans of Rs. 80,87,69, 1771 ot advance loans of Rs. 80,87,69, 1771- to related parties and other to related parties and other parties, the genuineness & creditworthiness of the borrowed fund has parties, the genuineness & creditworthiness of the borrowed fund has parties, the genuineness & creditworthiness of the borrowed fund has not been examined properly Us 13316) of the Act during the assessment not been examined properly Us 13316) of the Act during the assessment not been examined properly Us 13316) of the Act during the assessment proceedings though case was selected for complete scrutiny and these proceedings though case was selected for complete scrutiny and these proceedings though case was selected for complete scrutiny and these parties were nöt examined under section 133(6) of, the Act. parties were nöt examined under section 133(6) of, the Act.
Considering the above discussed facts and circumstance 7. Considering the above discussed facts and circumstance 7. Considering the above discussed facts and circumstances, I hold that the assessment order dated 05.03.2021 is erroneous in so far as it is the assessment order dated 05.03.2021 is erroneous in so far as it is the assessment order dated 05.03.2021 is erroneous in so far as it is prejudicial to the interest of the revenue within the meaning of section prejudicial to the interest of the revenue within the meaning of section prejudicial to the interest of the revenue within the meaning of section 263 of the Income Tax ACT, 1961. Therefore, the said order passed by 263 of the Income Tax ACT, 1961. Therefore, the said order passed by 263 of the Income Tax ACT, 1961. Therefore, the said order passed by the AO is set aside with the the AO is set aside with the direction to pass the same de direction to pass the same de-novo after taking into account the observations made above in accordance with law taking into account the observations made above in accordance with law taking into account the observations made above in accordance with law and after allowing reasonable opportunity to the assessee. The order and after allowing reasonable opportunity to the assessee. The order and after allowing reasonable opportunity to the assessee. The order under section 263 of the Income Tax Act, 1961 is passed accordingly. under section 263 of the Income Tax Act, 1961 is passed accordingly. under section 263 of the Income Tax Act, 1961 is passed accordingly.”
Before us, the Ld. Counsel of the assessee has filed a fore us, the Ld. Counsel of the assessee has filed a fore us, the Ld. Counsel of the assessee has filed a Paperbook containing pages 1 to 115. Paperbook containing pages 1 to 115.
We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the We have heard rival submission of the parties and perused the relevant material on record. Before us, the Ld. Counsel of the relevant material on record. Before us, the Ld. Counsel of the relevant material on record. Before us, the Ld. Counsel of the assessee has submitted that as far as first issue of disallowance of has submitted that as far as first issue of disallowance of has submitted that as far as first issue of disallowance of interest amounting to Rs.73,18,356/ interest amounting to Rs.73,18,356/- is concerned, concerned, the Assessing Officer has already disallowed the entire expenses claimed in the disallowed the entire expenses claimed in the disallowed the entire expenses claimed in the profit and loss account amounting to Rs.73,54,549/- which include profit and loss account amounting to Rs.73,54,549/ profit and loss account amounting to Rs.73,54,549/ interest amounting to Rs.73,18,356/ interest amounting to Rs.73,18,356/- and therefore, no further and therefore, no further disallowance could be made in the case of the assessee. Thus, order disallowance could be made in the case of the assessee. Thus disallowance could be made in the case of the assessee. Thus of the Assessing Officer is not prejudicial to the interest of the of the Assessing Officer is not prejudicial to the interest of the of the Assessing Officer is not prejudicial to the interest of the revenue to this extent. As regard to the second issue for proposing revenue to this extent. As regard to the second issue fo revenue to this extent. As regard to the second issue fo revision u/s 263 of the Act, the Ld. Counsel of the assessee revision u/s 263 of the Act, the Ld. Counsel of the assessee revision u/s 263 of the Act, the Ld. Counsel of the assessee submitted that for examining genuineness and creditworthiness of submitted that for examining genuineness and creditworthiness of submitted that for examining genuineness and creditworthiness of the borrowed fund, no show cause notice or any opportunity has no show cause notice or any opportunity has no show cause notice or any opportunity has been granted by the Ld. PCIT and therefore revision order passed on been granted by the Ld. PCIT and therefore revision ord been granted by the Ld. PCIT and therefore revision ord issue without providing due opportunity to the assessee is invalid. issue without providing due opportunity to the assessee is invalid. issue without providing due opportunity to the assessee is invalid. The Ld. Counsel of the assessee in support of claim relied on the The Ld. Counsel of the assessee in support of claim The Ld. Counsel of the assessee in support of claim decision of the Hon’ble Supreme Court in the case of CIT v. Amitabh of the Hon’ble Supreme Court in the case of CIT v. Amitabh of the Hon’ble Supreme Court in the case of CIT v. Amitabh Bachchan [2016] 69 taxmann.com 170 (SC). [2016] 69 taxmann.com 170 (SC).
4.1 The Ld. DR on the other hand submitted that there is no The Ld. DR on the other hand submitted that there is no The Ld. DR on the other hand submitted that there is no requirement of issuing specific show cause notice for revising the requirement of issuing specific show cause notice for requirement of issuing specific show cause notice for assessment order on a particular issue order on a particular issue. He also relied on the e also relied on the decision of the Hon’ble Supreme Court in the case of Amitabh decision of the Hon’ble Supreme Court in the case of Amitabh decision of the Hon’ble Supreme Court in the case of Amitabh Bachchan (supra).
4.2 Thus, the issue in dispute precipitated in the case is whether the issue in dispute precipitated in the case is whether the issue in dispute precipitated in the case is whether there was a requirement of issue of show cause notice or providing there was a requirement of issue of show cause notice or providing there was a requirement of issue of show cause notice or providing opportunity of being heard to the assessee opportunity of being heard to the assessee on a particular issue on a particular issue for revising the assessment order. In this refe revising the assessment order. In this reference, we gainfully rence, we gainfully referred to the finding of the Hon’ble Supreme Court in the case of referred to the finding of the Hon’ble Supreme Court in the case of referred to the finding of the Hon’ble Supreme Court in the case of Amitabh Bachchan (supra) wherein, the Hon’ble Supreme Court Amitabh Bachchan (supra) wherein, the Hon’ble Supreme Court Amitabh Bachchan (supra) wherein, the Hon’ble Supreme Court has rendered that the section 263 does not require issue of any has rendered that the section 263 does not require issue of any has rendered that the section 263 does not require issue of any specific show cause notice to be served on t specific show cause notice to be served on the assessee he assessee but requirement under the said provision is under the said provision is of opportunity of opportunity of hearing to the assessee. The relevant finding of the Hon’ble Supreme Court the assessee. The relevant finding of the Hon’ble Supreme Court the assessee. The relevant finding of the Hon’ble Supreme Court is reproduced as under: is reproduced as under:
“11. It may be that in a given case and in most cases it is so done a 11. It may be that in a given case and in most cases it is so done a 11. It may be that in a given case and in most cases it is so done a notice proposing the revisional exercise is given to the assessee notice proposing the revisional exercise is given to the assessee notice proposing the revisional exercise is given to the assessee indicating therein broadly or even specifically the grounds on which the indicating therein broadly or even specifically the grounds on which the indicating therein broadly or even specifically the grounds on which the exercise is felt necessary. But there is nothing exercise is felt necessary. But there is nothing in the section (Section in the section (Section 263) to raise the said notice to the status of a mandatory show cause 263) to raise the said notice to the status of a mandatory show cause 263) to raise the said notice to the status of a mandatory show cause notice affecting the initiation of the exercise in the absence thereof or to notice affecting the initiation of the exercise in the absence thereof or to notice affecting the initiation of the exercise in the absence thereof or to require the C.I.T. to confine himself to the terms of the notice and require the C.I.T. to confine himself to the terms of the notice and require the C.I.T. to confine himself to the terms of the notice and foreclosing con foreclosing consideration of any other issue or question of fact. This is sideration of any other issue or question of fact. This is not the purport of Section 263. Of course, there can be no dispute Of course, there can be no dispute not the purport of that while the C.I.T. is free to exercise his jurisdiction on that while the C.I.T. is free to exercise his jurisdiction on that while the C.I.T. is free to exercise his jurisdiction on consideration of consideration of all relevant facts, a full opportunity to all relevant facts, a full opportunity to controvert controvert controvert the the the same same same and and and to to to explain explain explain the the the circumstances circumstances circumstances surrounding such facts, as may be considered relevant by the surrounding such facts, as may be considered relevant by the surrounding such facts, as may be considered relevant by the assessee, must be afforded to him by the C.I.T. prior to the assessee, must be afforded to him by the C.I.T. prior to the assessee, must be afforded to him by the C.I.T. prior to the finalization of the decision.” finalization of the decision.” is supplied externally) (emphasis supplied externally) 4.3 In the case of the assessee, the relevant show cause notice In the case of the assessee, the relevant show cause notice In the case of the assessee, the relevant show cause notice issued by the Ld. PCIT is reproduced as under: issued by the Ld. PCIT is reproduced as under:
“NOTICE FOR THE HEARING M/s/Mr/Ms Subject: Notice for Hearing in respect of Revision proceedings us 263 of Subject: Notice for Hearing in respect of Revision proceedings us 263 of Subject: Notice for Hearing in respect of Revision proceedings us 263 of the THE INCOME TAX ACT, INCOME TAX ACT, 1961 - Assessment Year 2018-19.
In this regard, a hearing in the matter is fixed on 12/01/2023 at 11:30 In this regard, a hearing in the matter is fixed on 12/01/2023 at 11:30 In this regard, a hearing in the matter is fixed on 12/01/2023 at 11:30 AM. You are requested to attend in person or through an authorized AM. You are requested to attend in person or through an authorized AM. You are requested to attend in person or through an authorized representative to submit your representation, if any alongwith representative to submit your representation, if any alongwith representative to submit your representation, if any alongwith supporting documents/information in support of the issues involved (as rting documents/information in support of the issues involved (as rting documents/information in support of the issues involved (as mentioned below). If you wish that the Revision proceeding be mentioned below). If you wish that the Revision proceeding be mentioned below). If you wish that the Revision proceeding be concluded on the basis of your written submissions/representations concluded on the basis of your written submissions/representations concluded on the basis of your written submissions/representations filed in this office, on or before the said due date, then yo filed in this office, on or before the said due date, then yo filed in this office, on or before the said due date, then your personal attendance is not required. You also have the option to file your attendance is not required. You also have the option to file your attendance is not required. You also have the option to file your submission submission from from the the e e-filing filing portal portal using using the the link: link: incometaxindiaefiling.gov.in incometaxindiaefiling.gov.in Sub: Show-cause Notice under section 263 of the Income cause Notice under section 263 of the Income-tax Act, cause Notice under section 263 of the Income 1961 in your case for A.Y. 2018 1961 in your case for A.Y. 2018-19-reg. In this case the assessee has filed return of income on 30.10.2018 In this case the assessee has filed return of income on 30.10.2018 In this case the assessee has filed return of income on 30.10.2018 declaring to total income of Rs. ( declaring to total income of Rs. (-) 73,54,549/-. The case was selected . The case was selected for scrutiny under CASS. The assessment was completed under section for scrutiny under CASS. The assessment was completed under section for scrutiny under CASS. The assessment was completed under section 143(3) r.w.s. 143(3A) & 143(3B) of the Inc 143(3) r.w.s. 143(3A) & 143(3B) of the Income Tax Act dated ome Tax Act dated 05.03.2021 assessing income at Rs. 05.03.2021 assessing income at Rs. Nil.
On perusal of the assessement records, it is observed that, the 2. On perusal of the assessement records, it is observed that, the 2. On perusal of the assessement records, it is observed that, the assessee has shown revenue from operation as Nil and claimed assessee has shown revenue from operation as Nil and claimed assessee has shown revenue from operation as Nil and claimed expenses of Rs. 73,54,549/ expenses of Rs. 73,54,549/-which was accepted and allowed by the which was accepted and allowed by the AO. It is seen from the Balance Sheet that the assessee had shown total t is seen from the Balance Sheet that the assessee had shown total t is seen from the Balance Sheet that the assessee had shown total Long term borrowings of Rs. 58,12,53,036/ and shown loans to related Long term borrowings of Rs. 58,12,53,036/ and shown loans to related Long term borrowings of Rs. 58,12,53,036/ and shown loans to related and other parties amounting to Rs. 80,87,69, 177/ and other parties amounting to Rs. 80,87,69, 177/-. As the assessee . As the assessee has offered no income during A.Y. 2018 has offered no income during A.Y. 2018-19 the interest expenses of Rs. st expenses of Rs. 73,18,356/- claimed in P&L account is required to be disallowed. This claimed in P&L account is required to be disallowed. This claimed in P&L account is required to be disallowed. This has resulted in under assessment of income to the extent of Rs. 73, has resulted in under assessment of income to the extent of Rs. 73, has resulted in under assessment of income to the extent of Rs. 73, 18,356/- Further, no interest income is offered on loans and advances Further, no interest income is offered on loans and advances Further, no interest income is offered on loans and advances given. Therefore, it appears given. Therefore, it appears that the assessment order passed under that the assessment order passed under section 143(3) r.w.s. 143(3A) & 143(3B) of the Income Tax Act dated section 143(3) r.w.s. 143(3A) & 143(3B) of the Income Tax Act dated section 143(3) r.w.s. 143(3A) & 143(3B) of the Income Tax Act dated 05.03.2021 of the Act, is erroneous in so far as it is prejudicial to the 05.03.2021 of the Act, is erroneous in so far as it is prejudicial to the 05.03.2021 of the Act, is erroneous in so far as it is prejudicial to the interest of revenue, within the meaning of Section 263 of the I.T. Act. interest of revenue, within the meaning of Section 263 of the I.T. Act. interest of revenue, within the meaning of Section 263 of the I.T. Act. You are required to show cause as to why said assessment order are required to show cause as to why said assessment order are required to show cause as to why said assessment order should not be revised under section 263 of the should not be revised under section 263 of the Income Tax Act. Income Tax Act.
3. In this connection, you are hereby given an opportunity to file 3. In this connection, you are hereby given an opportunity to file 3. In this connection, you are hereby given an opportunity to file submission on or before submission on or before 11.01.2023 through ITBA Portal, along 11.01.2023 through ITBA Portal, along-with all supporting documents and evidences. If you wish to avail personal supporting documents and evidences. If you wish to avail personal supporting documents and evidences. If you wish to avail personal hearing, you are requested to attend the hearing on 12.01.2023 at hearing, you are requested to attend the hearing on 12.01.2023 at hearing, you are requested to attend the hearing on 12.01.2023 at 11.30 a.m. at Room No. 515, 5th Floor, Aayakar Bhavan, Mumbai either 11.30 a.m. at Room No. 515, 5th Floor, Aayakar Bhavan, Mumbai either 11.30 a.m. at Room No. 515, 5th Floor, Aayakar Bhavan, Mumbai either in person or through an authorized representative. in person or through an authorized representative. In case of non In case of non- compliance on the stipulated date and time, it will be presumed that compliance on the stipulated date and time, it will be presumed that compliance on the stipulated date and time, it will be presumed that you have no objection to the proposed revision of the assessment order you have no objection to the proposed revision of the assessment order you have no objection to the proposed revision of the assessment order passed by the Assessing Officer under section 143(3) r.w.s. 143(3A) & passed by the Assessing Officer under section 143(3) r.w.s. 143(3A) & passed by the Assessing Officer under section 143(3) r.w.s. 143(3A) & 143(3B of the Income Tax Act d 143(3B of the Income Tax Act dated 05.03.2021.” 4.4 On perusal of the above On perusal of the above notice, we find that the Ld. PCIT has , we find that the Ld. PCIT has no no no where where where asked asked asked for for for examination examination examination of of of the the the genuineness genuineness genuineness or or or creditworthiness of the funds borrowed for advancing. During the creditworthiness of the funds borrowed for advancing. During the creditworthiness of the funds borrowed for advancing. During the course of the hearing on 19.07.2013 and e of the hearing on 19.07.2013 and 24.08.2013, the Ld. DR 24.08.2013, the Ld. DR was asked to furnish necessary evidence in support that was asked to furnish necessary evidence in support that was asked to furnish necessary evidence in support that opportunity of being heard was given to the assessee on the issue of opportunity of being heard was given to the assessee on the issue of opportunity of being heard was given to the assessee on the issue of genuineness of examination of the borrowed fund genuineness of examination of the borrowed fund. During hearing . During hearing dated 04.09.2023, the Ld. DR filed 04.09.2023, the Ld. DR filed a copy of the relevant folder of f the relevant folder of the Ld. PCIT including order sheet and submitted that as per the the Ld. PCIT including order sheet and submitted that as per the the Ld. PCIT including order sheet and submitted that as per the record no such opportunity was appeared no such opportunity was appeared to be to be have given. In aforesaid circumstances of the case, circumstances of the case, the order u/s 263 passed by he order u/s 263 passed by the Ld. PCIT cannot be sustained. the Ld. PCIT cannot be sustained.
4.5 Since, we find that on the first issue, the Assessing Officer has we find that on the first issue, the Assessing Officer has we find that on the first issue, the Assessing Officer has already already already made made made disallowance disallowance disallowance of of of the the the interest interest interest amounting amounting amounting to to to Rs.73,18,356/- and therefore, order cannot be revised on that and therefore, order cannot be revised on that and therefore, order cannot be revised on that count . In absence of any opportunity provided by the Ld. PCIT on In absence of any opportunity provided by the Ld. PCIT on In absence of any opportunity provided by the Ld. PCIT on the second issue, the assessment order cannot be revised he assessment order cannot be revised he assessment order cannot be revised on the second issue also therefore, on both these cou also therefore, on both these counts, order of the Ld. PCIT cannot be sustained. Accordingly, we quash stained. Accordingly, we quash the order passed the order passed u/s 263 of the Act by the Ld. PCIT. u/s 263 of the Act by the Ld. PCIT.
In the result, the appeal filed In the result, the appeal filed by the assessee is allowed. by the assessee is allowed. Order pronounced in the open Court on nounced in the open Court on 06/09/2023. /09/2023. Sd/- Sd/ Sd/- (KAVITHA RAJAGOPAL KAVITHA RAJAGOPAL) (OM PRAKASH KANT) (OM PRAKASH KANT) JUDICIAL MEMBER JUDICIAL MEMBER ACCOUNTANT MEMBER ACCOUNTANT MEMBER Mumbai; Dated: 06/09/2023 Rahul Sharma, Sr. P.S.