M/S. INTERNATIONAL SEAPORTS (HALDIA) PVT. LTD.,KOLKATA vs. PCIT-2, KOLKATA

At the outset, we note that the appeal of the assessee is barred by limitation by 334 days. At the time of hearing the counsel of the assessee explained the reasons for delay in filing the appeal. On the other hand , the Ld. D.R strongly

The only issue raised in the various grounds of appeal is against the order of ld. Pr. Commissioner of Income Tax (in short PCIT), invoking the revisionary jurisdiction u/s 263 of the Act, thereby cancelling the assessment framed by the ld. AO u/s 143(3) of the Act, on the ground of being erroneous and prejudicial to the interest of the Revenue.

The facts in brief are that the assessee filed the return of income filed for the impugned assessment year on 06.10.2010, declaring total income of ₹73,50,108/-. The case of the assessee was selected for scrutiny and accordingly, the assessment u/s 143(3) of the Act was passed on 12.11.2018, assessing the total income at ₹82,36,328/-.

Thereafter, the ld. PCIT upon perusal of the assessment record noted that the TDS claimed by the assessee as appearing in form 26As was accepted by the ld. AO while framing the assessment u/s 143(3) of the Act dated 12.11.2018 however the assessee has shown the gross income of ₹ 73,65,07,503/- as against the actual gross receipts as appearing in form 26AS at ₹ 77,47,16,524/-. According to the ld. PCIT the same has resulted in the under assessment of income to the tune of ₹3,82,09,021/- including excess carry forward of MAT credit of ₹60,1,393/-. The ld. PCIT held that the order passed by the ld. AO u/s 143(3) of

The ld. AR vehemently submitted before us that the assessee has been carrying on the business of building, maintaining and operating(BOT) Berth No.4A at Haldia Dock, Kolkata Port Trust. The Haldia Dock Complex Kolkata(Port Trust) invited a tender with condition of BOT basis for a period of 30 years which was awarded to the assessee. Accordingly, a deed of license dated 14.05.2022, was executed according to which the assessee was provided with the job of building the facilities at Berth No.4A of Haldia Dock Complex, which is utilized to handle the imported coal for Steel Authority of India. The assessee filed the return of income on 06.10.2016, declaring total income of ₹73,50,108/- for the instant year after claiming deduction u/s 80IA of the Act of ₹10,71,13,091/-. The case of the assessee was selected for scrutiny and assessment was framed accordingly. The ld. AR submitted that the ld. AO issued notice u/s 142(1) of the Act calling upon the assessee to reconcile the total revenue receipt, copy of which is available at page no.18 to 19, in which vide Para no.10 and 11, the ld. AO asked for the party wise details along with copy of ledger of remittances made by

The ld. AR further submitted that once the assessee has replied/ filed evidences in response to notice issued u/s 142(1) of the Act, then it is presumed that the ld. AO has examined the issue and done proper enquiry. In defense of his argument the ld. AR relied on the decision of Hon'ble Apex Court in the case of Principal Commissioner of Income-tax-1 vs. V-Con Integrated Solutions (P.) Ltd. [2025] 173 taxmann.com 774 (SC)/[2025] 304 Taxman 598 (SC)/[2025] 476 ITR 526 (SC)[04-04-2025]dated 04.04.2025. The ld. AR therefore, prayed that the order passed u/s 263 of the Act

The ld. DR on the other hand relied heavily on the orders of the ld. PCIT by submitting that no prejudice is going to be caused to the assessee with the invoking of jurisdiction u/s 263 of the Act. The ld. DR submitted that ld. PCIT has rightly invoked the jurisdiction u/s 263 of the Act when the ld. PCIT found that there is a mismatch of gross receipts as per books of account vis-à-vis the form 26AS whereas full TDS has been claimed as appearing in form 26AS by the assessee. Consequently the PCIT held that this has rendered the assessment as erroneous and prejudicial to the interest of the Revenue.

After hearing the rival contentions and perusing the materials available on record, we find that the undisputedly the facts are that the assessee is carrying on the business of operating the Haldia Port ,Berth 4A on BOT basis income wherefrom is exempt u/s 80IA of the Act. This is also undisputed that if any disallowance is made then a deduction u/s 80IA of the Act would increase correspondingly. Therefore, there is no impact on the taxable income of the assessee. In our view for the exercise of jurisdiction u/s 263 of the Act, twin condition have to be satisfied; that the assessment framed by the ld. AO has to be erroneous in so far as prejudicial to the interest of the Revenue. The satisfaction of twin condition is mandatory for invoking the jurisdiction u/s 263 of the Act. Even if one of the two conditions is satisfied, even then the jurisdiction u/s 263 of the Act is not available to the ld. Pr. Commissioner of

In the result, the appeal of the assessee is allowed.