BNP PARIBAS,MUMBAI vs. COMMISSIONER OF INCOME-TAX (INTERNATIONAL TAXATION) - 1, MUMBAI, MUMBAI

Facts

The assessee, BNP Paribas, a commercial bank, filed its return for AY 2017-18. The Assessing Officer (AO) assessed the income. The CIT(IT) invoked Section 263, issuing a show-cause notice, alleging the assessment order was erroneous and prejudicial to the revenue. The CIT(IT) questioned the allowability of deduction for CSR expenses claimed under Section 80G.

Held

The Tribunal noted that the AO had made inquiries regarding CSR expenses and Section 80G deductions. The Supreme Court and various High Courts have held that for Section 263 revision to be valid, the order must be both erroneous and prejudicial to the revenue, and there must be a lack of inquiry, not just an inadequate one. In this case, the AO had made sufficient inquiries. Therefore, the CIT's order was not justified.

Key Issues

Whether the CIT erred in assuming jurisdiction under Section 263 of the Act by setting aside the assessment order based on alleged lack of inquiry regarding CSR expenses and Section 80G deduction.