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Facts
The assessee preferred an appeal against the order of the ld. PCIT-6, Mumbai, under section 263 of the Act. The assessee's grievances included that the assessment order passed by NaFAC was neither erroneous nor prejudicial to the revenue, and that the section 263 order was passed without proper findings.
Held
The assessee filed a letter stating that the assessment proceedings have been completed in their favour, making the appeal infructuous. The Tribunal noted the contents of the letter.
Key Issues
Whether the order passed by the Principal Commissioner under section 263 of the Act was erroneous and prejudicial to the interest of revenue, and if the subsequent assessment order passed by the AO was in favor of the assessee.
Sections Cited
263, 143(3), 144C, 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
Before: SHRI NARENDRA KUMAR BILLAIYA, HON’BLE & SHRI ANIKESH BANERJEE, HON’BLE
O R D E R
PER NARENDRA KUMAR BILLAIYA, AM:
This appeal by the assessee is preferred against the order of the ld. PCIT-6, Mumbai, [hereinafter ‘the ld. Pr. CIT’] framed u/s 263 of the Act dt. 12/03/2024, pertaining to AY 2017-18.
The grievance of the assessee reads as under:- “Validity of order passed under section 263 of the Act 1. Erred in not appreciating that the assessment order passed by National e-Assessment Centre, Delhi ('NaFAC') under section 143(3) read with section 144C of the Act was neither erroneous nor prejudicial to the interest of the revenue. 2. Erred in not appreciating that assessment order passed by NaFAC is not erroneous as there is no cogent material to show that there was non- application of mind on part of NaFAC or that NaFAC has committed any mistake/error of fact or law. 3. Erred in passing an order under section 263 of the Act without providing an express finding to the effect that assessment order is erroneous which has caused prejudice to revenue, thereby initiating proceedings under section 263 of the Act for making roving inquiries.
Erred in invoking explanation 2(a) of section 263 of the Act while passing the order when the said explanation was not invoked in the notice issued initiating the proceedings.
Erred in invoking explanation 2(a) of section 263 of the Act holding that the assessment order was passed without making inquiries or verification without appreciating that Appellant furnished details of lease rentals payments upon inquiry made by NaFAC during assessment proceedings which was duly verified, and no adverse inference was drawn. 6. Erred in passing order under section 263 of the Act without taking cognizance of submissions made by Appellant and providing no reason for deeming submissions as unacceptable.
No underassessment of income
Erred in alleging underassessment of income of Rs 6,51,37,459 pertaining to short-term lease rent expense based on mere conjunctures and surmises, ignoring the factual matrix of the case as well as the nature of the transactions undertaken by Appellant.” 3. The assessee filed the following letter addressing the Bench:- “Hon’ble Members, Re: General Mills India Private Limited (‘GMIPL’ or ‘the Appellant’) PAN:AAACG1773B Assessment Year (‘AY’): 2017-18 Appeal No. & Bench: 2629/MUM/2024 - ‘G’ Bench Sub: Submission of assessment order passed under section 143(3) read with section 263 of the Income-tax Act, 1961 (‘the Act’) dateci 24 March 2025 We refer to the captioned appeal scheduled for hearing before the Hon’ble Bench on 01 April 2025. In this connection, the Appellant wishes to submit the following: • The captioned appeal has been filed against the order dated 12 March 2024 passed under section 263 of the Act by the Principal Commissioner of Income Tax, Mumbai - 6 (‘learned PCIT’) for the captioned AY. As per the said order, the Assessing Officer was directed to make an enquiry on the allowance of lease rent expense of INR 6,51,37,459, after giving the Appellant an opportunity of being heard. • Pursuant to the above, the Deputy Commissioner of Income-tax, Circle 15(1 )(2) (‘learned AO’) issued notices under section 142(1) of the Act calling for various details from the Appellant relating to the subject matter. • On perusal of submissions filed by the Appellant, the learned AO passed the assessment order dated 24 March 2025 under section 143(3) read with section 263 of the Act, accepting the contentions of the Appellant and allowing a deduction of lease rent expense of INR 6,51,37,459. A copy of the assessment order dated 24 March 2025 has been enclosed as Annexure 1. • In the above backdrop, the Appellant submits that since the aforementioned assessment proceedings have been completed in favour of the Appellant, the captioned appeal has become infructuous.
Having mentioned the above, the Appellant reserves the right to revive the appeal at a future date if any subsequent proceedings were initiated adversely impacting the Appellant.
We request the Hon’ble Bench to take the above on record and oblige.
Yours faithfully, For General Mills Private Limited”