Assumption of revisionary jurisdiction u/s 263 of the Income Tax Act, 1961

IN THE INCOME TAX APPELLATE TRIBUNAL “C” BENCH, PUNE
BEFORE SHRI R.S.SYAL, VP AND
SHRI PARTHA SARATHI CHAUDHURY, JM

ITA No. 216/PUN/2021

Assessment Year : 2014-15

Gestamp Automotive India Private Limited
E-1, MIDC, Industrial Area,
Phase-III, Chakan, Nigoje Malunge,
Kharabwadi, Taluka- Khed,
Pune-410 501
PAN : AADCG1520D

vs

The Pr. Commissioner of Income Tax-3,
Pune.

Assessee by : Shri Nikhil Mutha
Revenue by : Shri Shekhar L. Gajbhiye &
Shri A.M Mahadevan Krishnan

Date of Hearing : 13.10.2021

Date of Pronouncement : 20.10.2021

This appeal preferred by the assessee emanates from the order of the Ld. Pr. Commissioner of Income Tax, Pune-3 dated 31.03.2021 for the assessment year 2014-15 as per the grounds of appeal on record.

2. The Ld. Counsel for the assessee also brought to our notice a letter annexed at Pages 125 to 128 of the paper book dated 01.11.2017 written to the Assessing Officer wherein the assessee has explained at Column 4 i.e. “Details of other expenses debited to profit and loss account” and there also, the assessee has mentioned exchange difference at Rs.82,83,74,234/-. Thereafter, the assessee GAIPL submitted that it had incurred book loss during the assessment year 2014-15 mainly due to foreign exchange loss of Rs.82,83,74,234/- which is debited to the profit and loss account. The assessee has also given another letter dated 03.10.2017 to the Assessing Officer wherein it had provided purchase register in respect of raw material, consumable and spares and fuel for the month of May 2013, September 2013 and January, 2014 and the copy of purchase register is enclosed as attachment 1 in the paper book at Pages 101 to 123.

3. It is a settled position of law while assuming jurisdiction u/s.263 of the Act, the Ld. Pr. Commissioner of Income Tax should specifically state the reasons why the order of the Assessing Officer was erroneous in so far as prejudicial to the interest of the revenue by supporting factual evidences and reasoning which in this case is absent. We take guidance from the decision of the Hon‟ble Andhra Pradesh High Court in the case of Spectra Shares & Scrips (P) Ltd Vs. Commissioner of Income Tax (supra.) wherein it was held by the Hon‟ble High Court that “the correspondence exchanged between the parties shows that the Assessing Officer raised specific queries about the business activity of the assessee. The assessee had also given details computation of capital gains under various categories. It is settled law that the Assessing Officer is not called upon to write an elaborate judgment giving detailed reasons. Merely because the order does not contain reasons as to why he accepted the case of the assesse, his order does not become susceptible for revision.”

4. Taking totality of facts and circumstances and aforesaid judicial pronouncements, we hold that resorting to revisionary jurisdiction u/s.263 of the Act by the Ld. Pr. Commissioner of Income Tax in this case is not valid in law and hence, we quash the impugned order of the Ld. Pr. Commissioner of Income Tax.  In the result, appeal of the assessee is allowed. Order pronounced on 20th day of October, 2021.

Please find attached the enclosed file for the full judgement