M/S SUN SPINTEX INDIA LTD,COIMBATORE vs. DCIT CORPORATE CIRCLE 2, COIMBATORE

This appeal filed by the assessee is directed against the order of the ld. Principal Commissioner of Income Tax-1, Coimbatore, dated 19.03.2018 relevant to the assessment year 2013-14 challenging the order passed under section 263 of the Income Tax Act, 1961 [“Act” in short].

Brief facts of the case are that the assessee filed its return of income for the assessment year 2013-14 on 02.01.2014 declaring NIL income. The return of income filed by the assessee was processed under section 143(1) of the Act. Subsequently, the case of the assessee was selected for scrutiny and against the statutory notices, the assessee filed the details. After examining the details of the assessee, the assessment under section 143(3) of the Act was completed by accepting the returned income.

However, on verification of assessment records, against the claim of depreciation at 80% on the purchase of wind mills during the assessment y4ar 2013-14, the ld. PCIT was of the opinion that the wind mills purchased after 31.03.2012 are to be allowed a depreciation of 15% only in view of notification of CBDT in No. 15/2012. Since the Assessing Officer while completing the assessment has allowed the relief without verification or proper enquiry, the ld. PCIT was of the opinion that the assessment order is erroneous and prejudicial to the interest of the Revenue. Therefore, by invoking the provisions of section 263 of the Act, the ld. PCIT passed exparte order under section 263 of the Act in directing the Assessing Officer to redo the assessment afresh.

Against the order under section 263 of the Act, the assessee preferred an appeal before the Tribunal. By filing copy of the written submissions of the assessee filed in the form of letter dated 14.03.2018, which was received in the office of the ld. PCIT on 14.03.2018, the ld. Counsel for the assessee has submitted that the ld. PCIT has not considered the explanations of the assessee and passed exparte order and prayed for quashing the revision order.

Per contra, the ld. DR has fairly conceded that the matter may be remitted back to the file of the ld. PCIT.

We have heard both the sides, perused the materials available on record and gone through the orders of authorities below. Against the notice under section 263 of the Act issued by the ld. PCIT, the assessee has filed its explanation by way of letter dated 14.03.2018, which was received in the office of the ld. PCIT on the same day. However, in para 4 of the revision order, the ld. PCIT has stated that the assessee chose not to avail the opportunities provided as the assessee has not responded to the show cause notice issued on 08.03.2018 and proceeded to pass order under section 263 of the Act on 19.03.2018. Thus, it is a fact that the ld. PCIT has not considered the explanations of the assessee which was very much available in the office of the ld. PCIT before passing revision order. Accordingly, we direct the ld. PCIT to examine the explanations by keeping in mind the amendment to the Income Tax Rules through Income Tax (Eighth Amendment) Rules, 2014 notified by the Ministry of Finance, Department of Revenue vide notification dated 16.09.2014 and thereafter take a decision for the necessity of invoking the provisions of section 263 of the Act after allowing meaningful opportunity of being heard to the assessee.

In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on the 14th June, 2021 in Chennai.