ANTONY LARA ENVIRO SOLUTIONS PRIVATE LIMITED ,MUMBAI V. PCIT- 1 , THANE

ITA 3505/MUM/2025

AI Insights

The case involves Antony Lara Enviro Solutions Pvt. Ltd., which appealed against the order of the Principal Commissioner of Income Tax, Thane, invoking section 263 of the Income Tax Act. The PCIT had set aside the original assessment order, directing a re-examination of the transition amount related to the Minimum Alternate Tax (MAT) computation under section 115JB(2C). The Tribunal examined whether the PCIT was justified in invoking section 263, focusing on whether there was an error in the original assessment that was prejudicial to the interests of the revenue. The Tribunal concluded that the original assessment had adequately addressed the transition amount, and the subsequent adjustments were merely mechanical, thus not warranting a revision under section 263.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 788454 (ITAT-MUMBAI)
• Duration Of Justice: 6 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-11-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: misc
• Appeal Filed On: 20-05-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: BHUPENDRA SHAH
• Keywords: Set aside; Difference of opinion; Change of opinion; Depreciation; Assessment record; Revision of order
• Section: 143(3); 142(1); 263; 115JB

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) AND SHRI RAJ KUMAR CHAUHAN (JUDICIAL MEMBER) ITA No. 3505/MUM/2025 Assessment Year: 2020-21 Antony Lara Enviro Solutions Pvt. Ltd., A-59, Road No. 10, Wagle Industrial Estate, Thane-400604. Vs. PCIT, Thane-1, B Wing, Ashar IT Park, 6th floor, Road No. 16Z, Wagle Industrial Estate, Thane (West), Thane-400604. PAN NO. AAHCA 8528 P Appellant Respondent Assessee by : Mr. Bhupendra Shah Revenue by : Mr. Rajesh Kumar Yadav, CIT-DR Date of Hearing : 01/10/2025 Date of pronouncement : 26/11/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against order dated 27.03.2025 passed by the Ld. Principal Commissioner of Income- tax – 1, Thane [in short ‘the Ld. PCIT’] for assessment year 2020-21, raising grounds as reproduced below: A] Grounds 1. In the facts of the case and in Law, the learned PCIT erred in invoking Section 263 to the case of the Appellant only by way of Printed from counselvise.com change of opinion, without pointing out any error in the order of the A.O. and also by disregarding the detailed submissions dated 03-03-2025 made to him from time to time. 2. In the facts of the case and in Law, the Show Cause Notice & or order u/s 263 alleging errors and prejudice, itself is erroneous on many counts as follows.  In the facts of the case and in Law, the learned erred in invoking the provision of sec. 263 merely because he wants to take a view different from the one taken by the Assessing Officer and thereby changing the opinion of the Assessing Officer by his opinion.  In the facts of the case and in Law, the erred in overlooking the fact that once the issue of transition amount of Rs.41,40,28,675/ during the initial assessment year 2018 FY 2017 subsequent four years has no relev 1/5th additions in next 4 years originates from the transition amount of Rs.41,40,28,675/ year 2017  In the facts of the case and in Law, the learned PCIT erred in directing that he AO shall examine the submission proceedings and make necessary inquiries and verification in regard to the transition amount as referred to in section 115JB(2C) of Rs. 8,28,05,735/ though th 3. In the facts of the case and in Law, the learned PCIT has erred in passing the order u/s 263 by disregarding exhaustive details cited in the reply to show cause notice and thereby passing the order not tenable in law. [B] Relief Prayed: The appellant therefore prays to quash the order u/s 263 because PCIT had no proper jurisdiction to invoke provisions of revision and merely a change 2. Briefly stated, the material facts are that under section 143(3) of the Income completed on 09.09.2022, wherein the Assessing Officer accepted Antony Lara Enviro Solutions Pvt. Ltd. ITA No. 3505/MUM/2025 change of opinion, without pointing out any error in the order of the A.O. and also by disregarding the detailed submissions 2025 made to him from time to time. 2. In the facts of the case and in Law, the Show Cause Notice & or order u/s 263 alleging errors and prejudice, itself is erroneous on many counts as follows. In the facts of the case and in Law, the learned erred in invoking the provision of sec. 263 merely because he wants to take a view different from the one taken by the Assessing Officer and thereby changing the opinion of the Assessing Officer by his opinion. In the facts of the case and in Law, the learned PCIT erred in overlooking the fact that once the issue of transition amount of Rs.41,40,28,675/- is scrutinized during the initial assessment year 2018-19 relevant to FY 2017-18, the scrutiny of the same issue in subsequent four years has no relevance as subsequent 1/5th additions in next 4 years originates from the transition amount of Rs.41,40,28,675/- in first financial year 2017-18,. In the facts of the case and in Law, the learned PCIT erred in directing that he AO shall examine the submission of the Appellant made during the present proceedings and make necessary inquiries and verification in regard to the transition amount as referred to in section 115JB(2C) and allowability of the of Rs. 8,28,05,735/-in the relevant year even though the same is claimed as per law only 3. In the facts of the case and in Law, the learned PCIT has erred in passing the order u/s 263 by disregarding exhaustive details cited in the reply to show cause notice and thereby passing the order not tenable in law. [B] Relief Prayed: The appellant therefore prays to quash the order u/s 263 because PCIT had no proper jurisdiction to invoke provisions of revision and merely a change of opinion. Briefly stated, the material facts are that the assessment 143(3) of the Income-tax Act, 1961 (“the Act”) was completed on 09.09.2022, wherein the Assessing Officer accepted Antony Lara Enviro Solutions Pvt. Ltd. 2 ITA No. 3505/MUM/2025 change of opinion, without pointing out any error in the order of the A.O. and also by disregarding the detailed submissions 2. In the facts of the case and in Law, the Show Cause Notice & or order u/s 263 alleging errors and prejudice, itself is In the facts of the case and in Law, the learned PCIT erred in invoking the provision of sec. 263 merely because he wants to take a view different from the one taken by the Assessing Officer and thereby changing the learned PCIT erred in overlooking the fact that once the issue of is scrutinized 19 relevant to 18, the scrutiny of the same issue in ance as subsequent 1/5th additions in next 4 years originates from the in first financial In the facts of the case and in Law, the learned PCIT erred in directing that he AO shall examine the of the Appellant made during the present proceedings and make necessary inquiries and verification in regard to the transition amount as referred the claim in the relevant year even e same is claimed as per law only. 3. In the facts of the case and in Law, the learned PCIT has erred in passing the order u/s 263 by disregarding exhaustive details cited in the reply to show cause notice and thereby The appellant therefore prays to quash the order u/s 263 because PCIT had no proper jurisdiction to invoke provisions of the assessment tax Act, 1961 (“the Act”) was completed on 09.09.2022, wherein the Assessing Officer accepted Printed from counselvise.com the returned income of and ₹75,70,83,250/- provisions as declared in the return filed on 01.02.2021. 3. The learned PCIT thereafter called for and examined the assessment records. On such examination, he formed the prima facie view that, in Tax(MAT) computation forming included one-fifth of the “transition amount” contemplated under section 115JB(2C), amounting to ₹41,40,28,675/-. This transition amount pertained to adjustments required upon conversi 3.1 According to the learned PCIT, the assessee had erroneously computed the transition amount by including adjustments relating to capital reserve and securities premium, whereas clause (iii) of the Explanation to section 115JB(2C) specifically mandates exclusion of capital reserve and securities premium from the computation of “other equity” adjustments. The learned PCIT further observed that no details or supporting material relating to MAT computation had been called for or examined during the original assessment proceedings. He, therefore, issued a show 25.02.2025 proposing revision under section 263. 3.2 In response, the assessee contended that the transition amount of ₹41,40,28,675/ Antony Lara Enviro Solutions Pvt. Ltd. ITA No. 3505/MUM/2025 the returned income of ₹1,42,62,650/- under the normal provisions - under the Minimum Alternate Tax (“MAT”) declared in the return filed on 01.02.2021. The learned PCIT thereafter called for and examined the assessment records. On such examination, he formed the prima under the Schedule of Minimum Alternative computation forming part of the return, the assessee had fifth of the “transition amount” contemplated under section 115JB(2C), amounting to ₹8,28,05,735/-, being one . This transition amount pertained to adjustments required upon conversion to Ind-AS with effect from 01.04.2017. According to the learned PCIT, the assessee had erroneously computed the transition amount by including adjustments relating to capital reserve and securities premium, whereas clause (iii) of the section 115JB(2C) specifically mandates exclusion of capital reserve and securities premium from the computation of “other equity” adjustments. The learned PCIT further observed that no details or supporting material relating to MAT computation had alled for or examined during the original assessment proceedings. He, therefore, issued a show-cause notice dated 25.02.2025 proposing revision under section 263. In response, the assessee contended that the transition 41,40,28,675/- stood duly disclosed in the audited Antony Lara Enviro Solutions Pvt. Ltd. 3 ITA No. 3505/MUM/2025 under the normal provisions under the Minimum Alternate Tax (“MAT”) declared in the return filed on 01.02.2021. The learned PCIT thereafter called for and examined the assessment records. On such examination, he formed the prima Minimum Alternative part of the return, the assessee had fifth of the “transition amount” contemplated under , being one-fifth of . This transition amount pertained to adjustments AS with effect from 01.04.2017. According to the learned PCIT, the assessee had erroneously computed the transition amount by including adjustments relating to capital reserve and securities premium, whereas clause (iii) of the section 115JB(2C) specifically mandates exclusion of capital reserve and securities premium from the computation of “other equity” adjustments. The learned PCIT further observed that no details or supporting material relating to MAT computation had alled for or examined during the original assessment cause notice dated In response, the assessee contended that the transition stood duly disclosed in the audited Printed from counselvise.com financial statements for F.Y. 2017 and that such amount had been computed after excluding capital reserve and securities premium. The assessee further submitted that, following the assessment order for A.Y. 2018 the said amount had been consistently added to the book profit each year, including the impugned year. The essence of the assessee’s plea was that the transition amount had been scrutinised in the initi no further enquiry was warranted in the subsequent years, as the annual one-fifth adjustments merely emanated from the original figure. 3.3 The learned PCIT, however, was not persuaded. He observed that no inquiry whatsoever had been conducted by the Assessing Officer on this aspect during the assessment proceedings for the year under consideration. Invoking Explanation 2 to section 263 particularly clause (b) deemed to be erroneous insofar as it was prejudicial to the interests of the Revenue. He accordingly set aside the assessment order for the limited purpose of directing the Assessing Officer to examine the correctness of the transition amount and the resultant adjustme The relevant finding of the Ld. CIT(A) is reproduced as under: “6. The Assessment order is required to be passed by making relevant enquiries and verification by the Assessing Officer. Explanation 2(b) makes it clear that any order passed allowing any relief without inquiring into the claim which should have been made by the Assessing Officer shall be deemed to be erroneous in Antony Lara Enviro Solutions Pvt. Ltd. ITA No. 3505/MUM/2025 financial statements for F.Y. 2017-18, as explained in Note 37B, and that such amount had been computed after excluding capital reserve and securities premium. The assessee further submitted g the assessment order for A.Y. 2018- the said amount had been consistently added to the book profit each year, including the impugned year. The essence of the assessee’s plea was that the transition amount had been scrutinised in the initial year of Ind-AS adoption and, consequently, no further enquiry was warranted in the subsequent years, as the fifth adjustments merely emanated from the original The learned PCIT, however, was not persuaded. He observed uiry whatsoever had been conducted by the Assessing Officer on this aspect during the assessment proceedings for the year under consideration. Invoking Explanation 2 to section 263 particularly clause (b)—he held that the assessment order was erroneous insofar as it was prejudicial to the interests of the Revenue. He accordingly set aside the assessment order for the limited purpose of directing the Assessing Officer to examine the correctness of the transition amount and the resultant adjustme The relevant finding of the Ld. CIT(A) is reproduced as under: 6. The Assessment order is required to be passed by making relevant enquiries and verification by the Assessing Officer. Explanation 2(b) makes it clear that any order passed allowing relief without inquiring into the claim which should have been made by the Assessing Officer shall be deemed to be erroneous in Antony Lara Enviro Solutions Pvt. Ltd. 4 ITA No. 3505/MUM/2025 18, as explained in Note 37B, and that such amount had been computed after excluding capital reserve and securities premium. The assessee further submitted -19, one-fifth of the said amount had been consistently added to the book profit each year, including the impugned year. The essence of the assessee’s plea was that the transition amount had been AS adoption and, consequently, no further enquiry was warranted in the subsequent years, as the fifth adjustments merely emanated from the original The learned PCIT, however, was not persuaded. He observed uiry whatsoever had been conducted by the Assessing Officer on this aspect during the assessment proceedings for the year under consideration. Invoking Explanation 2 to section 263— he held that the assessment order was erroneous insofar as it was prejudicial to the interests of the Revenue. He accordingly set aside the assessment order for the limited purpose of directing the Assessing Officer to examine the correctness of the transition amount and the resultant adjustment. The relevant finding of the Ld. CIT(A) is reproduced as under: 6. The Assessment order is required to be passed by making relevant enquiries and verification by the Assessing Officer. Explanation 2(b) makes it clear that any order passed allowing relief without inquiring into the claim which should have been made by the Assessing Officer shall be deemed to be erroneous in Printed from counselvise.com so far as it is prejudicial to the interests of the revenue. The claim of the assessee that once the issue of transition amount Rs.41,40,28,675/ year 2018-19 relevant to FY 2017 issue in subsequent four years has no relevance as subsequent 1/5th additions in next 4 years originates from the transition amount of Rs.41,40,28,675/ tenable as the AO has allowed the claim of Rs. 8,28,05,735/ without examining it during the assessment proceedings for the assessment year 2020 such, the case falls under Explanation 2(b) to Section 263 of the Act. 7. In view of above discussion, I have come to the conclusion that the assessment order dated 09/09/2022 passed u/s.143(3) r.ws.144B for the A.Y.2020 prejudicial to the interest of the Revenue. The assessment order dated 09/09/2022 for A.Y.2020 for the limited purpose to examine the following issue(s) : 8. The AO shall examine the submission of the assessee made during the present proceedings and make necessary inquiries and verification in regard to the transition amount as referred to in section 115JB(2C) and allowability of the claim of Rs. 8,28,05,735/ 4. Before us, the learned counsel for the assess record a Paper Book comprising pages 1 to 120. Adverting to page 74 thereof, he drew our attention to the audit report furnished in Form No. 29B, wherein the auditor has certified the quantum of adjustment required to be made to the book profi 115JB of the Act pursuant to the adoption of Indian Accounting Standards (Ind-AS). The learned counsel further referred to the notice issued under section 142(1) of the Act dated 09.02.2022 and contended that all requisite particulars conce computation, including the transition amount, were duly furnished before the Assessing Officer during the assessment proceedings. Antony Lara Enviro Solutions Pvt. Ltd. ITA No. 3505/MUM/2025 so far as it is prejudicial to the interests of the revenue. The claim of the assessee that once the issue of transition amount Rs.41,40,28,675/- is scrutinized during the initial assessment 19 relevant to FY 2017-18, the scrutiny of the same issue in subsequent four years has no relevance as subsequent 1/5th additions in next 4 years originates from the transition unt of Rs.41,40,28,675/- in first financial year 2017 tenable as the AO has allowed the claim of Rs. 8,28,05,735/ without examining it during the assessment proceedings for the assessment year 2020-21, presently under consideration. As e case falls under Explanation 2(b) to Section 263 of the 7. In view of above discussion, I have come to the conclusion that the assessment order dated 09/09/2022 passed u/s.143(3) r.ws.144B for the A.Y.2020-21 is erroneous in so far as it is ial to the interest of the Revenue. The assessment order dated 09/09/2022 for A.Y.2020-21 is accordingly partly set aside for the limited purpose to examine the following issue(s) : 8. The AO shall examine the submission of the assessee made esent proceedings and make necessary inquiries and verification in regard to the transition amount as referred to in section 115JB(2C) and allowability of the claim of Rs. 8,28,05,735/-in the relevant year.” Before us, the learned counsel for the assess record a Paper Book comprising pages 1 to 120. Adverting to page 74 thereof, he drew our attention to the audit report furnished in Form No. 29B, wherein the auditor has certified the quantum of adjustment required to be made to the book profi 115JB of the Act pursuant to the adoption of Indian Accounting AS). The learned counsel further referred to the notice issued under section 142(1) of the Act dated 09.02.2022 and contended that all requisite particulars concerning the MAT computation, including the transition amount, were duly furnished before the Assessing Officer during the assessment proceedings. Antony Lara Enviro Solutions Pvt. Ltd. 5 ITA No. 3505/MUM/2025 so far as it is prejudicial to the interests of the revenue. The claim of the assessee that once the issue of transition amount of is scrutinized during the initial assessment 18, the scrutiny of the same issue in subsequent four years has no relevance as subsequent 1/5th additions in next 4 years originates from the transition in first financial year 2017-18, is not tenable as the AO has allowed the claim of Rs. 8,28,05,735/- without examining it during the assessment proceedings for the 21, presently under consideration. As e case falls under Explanation 2(b) to Section 263 of the 7. In view of above discussion, I have come to the conclusion that the assessment order dated 09/09/2022 passed u/s.143(3) 21 is erroneous in so far as it is ial to the interest of the Revenue. The assessment order 21 is accordingly partly set aside for the limited purpose to examine the following issue(s) :- 8. The AO shall examine the submission of the assessee made esent proceedings and make necessary inquiries and verification in regard to the transition amount as referred to in section 115JB(2C) and allowability of the claim of Rs. Before us, the learned counsel for the assessee placed on record a Paper Book comprising pages 1 to 120. Adverting to page 74 thereof, he drew our attention to the audit report furnished in Form No. 29B, wherein the auditor has certified the quantum of adjustment required to be made to the book profit under section 115JB of the Act pursuant to the adoption of Indian Accounting AS). The learned counsel further referred to the notice issued under section 142(1) of the Act dated 09.02.2022 and rning the MAT computation, including the transition amount, were duly furnished before the Assessing Officer during the assessment proceedings. Printed from counselvise.com 4.1 He also invited our attention to the assessment order for A.Y. 2018-19, wherein the Assessing Officer had ex the computation of the transition amount arising on first adoption of Ind-AS. According to him, once the foundational transition amount had been scrutinised and accepted in the initial year, the consequential one years—being arithmetical apportionments flowing directly from the original figure—did not call for fresh verification year after year. He submitted that the assessment records for A.Y. 2018 available before the Assessing Officer, furnished all relevant details. Thus, in the factual matrix of the present case, there was neither omission nor failure on the part of the Assessing Officer so as to attract Explanation 2 to section 263. The assumption of revision argued, was therefore wholly unwarranted. 4.2 On the other hand, the Ld. Department Representative (DR) relied on the order of the Ld. PCIT. 4.3 We have carefully considered the rival submissions and perused the material placed on record. for our adjudication is a narrow one: whether, for the year under consideration, the Assessing Officer can be said to have failed to conduct the requisite inquiry regarding the inclusion of one the transition amount computation of Antony Lara Enviro Solutions Pvt. Ltd. ITA No. 3505/MUM/2025 He also invited our attention to the assessment order for A.Y. 19, wherein the Assessing Officer had examined and accepted the computation of the transition amount arising on first AS. According to him, once the foundational transition amount had been scrutinised and accepted in the initial year, the consequential one-fifth adjustments in the subsequent being arithmetical apportionments flowing directly from the did not call for fresh verification year after year. He submitted that the assessment records for A.Y. 2018 available before the Assessing Officer, and the assessee had also furnished all relevant details. Thus, in the factual matrix of the present case, there was neither omission nor failure on the part of the Assessing Officer so as to attract Explanation 2 to section 263. The assumption of revisional jurisdiction by the learned PCIT, he argued, was therefore wholly unwarranted. On the other hand, the Ld. Department Representative (DR) relied on the order of the Ld. PCIT. We have carefully considered the rival submissions and material placed on record. The controversy that arises for our adjudication is a narrow one: whether, for the year under consideration, the Assessing Officer can be said to have failed to conduct the requisite inquiry regarding the inclusion of one the transition amount—amounting to ₹8,28,05,735/ Antony Lara Enviro Solutions Pvt. Ltd. 6 ITA No. 3505/MUM/2025 He also invited our attention to the assessment order for A.Y. amined and accepted the computation of the transition amount arising on first-time AS. According to him, once the foundational transition amount had been scrutinised and accepted in the initial in the subsequent being arithmetical apportionments flowing directly from the did not call for fresh verification year after year. He submitted that the assessment records for A.Y. 2018-19 were and the assessee had also furnished all relevant details. Thus, in the factual matrix of the present case, there was neither omission nor failure on the part of the Assessing Officer so as to attract Explanation 2 to section 263. al jurisdiction by the learned PCIT, he On the other hand, the Ld. Department Representative (DR) We have carefully considered the rival submissions and The controversy that arises for our adjudication is a narrow one: whether, for the year under consideration, the Assessing Officer can be said to have failed to conduct the requisite inquiry regarding the inclusion of one-fifth of 8,28,05,735/—in the Printed from counselvise.com 4.4 The learned PCIT has proceeded on the premise that the Assessing Officer omitted to verify whether the transition amount utilised for MAT purposes was computed after excluding ca reserve and securities premium, as mandated by clause (iii) of the Explanation to section 115JB(2C). It is on this perceived absence of inquiry that the jurisdiction under section 263 has been invoked by placing reliance on Explanation 2(b). 4.5 On the other hand, the assessee has consistently maintained that the transition amount was duly computed in accordance with Ind-AS requirements, after excluding capital reserve and securities premium, and that this very computation was subjected to detailed scrutiny in A.Y. 2018 the transition amount was determined and accepted in that year, the consequential one years were purely mechanical in nature and did not warrant a repetitive examination. The assessee further demonstrated that the Form No. 29B audit report, the Ind assessment order for A.Y. 2018 Assessing Officer at the time of completing the assessmen present year. 4.6 We find considerable merit in the submission of the assessee. The transition amount under section 115JB(2C) is a one computation arising on the date of first Statutorily, only one- Antony Lara Enviro Solutions Pvt. Ltd. ITA No. 3505/MUM/2025 The learned PCIT has proceeded on the premise that the Assessing Officer omitted to verify whether the transition amount utilised for MAT purposes was computed after excluding ca reserve and securities premium, as mandated by clause (iii) of the Explanation to section 115JB(2C). It is on this perceived absence of inquiry that the jurisdiction under section 263 has been invoked by placing reliance on Explanation 2(b). he other hand, the assessee has consistently maintained that the transition amount was duly computed in accordance with AS requirements, after excluding capital reserve and securities premium, and that this very computation was subjected to detailed rutiny in A.Y. 2018-19—the initial year of Ind-AS adoption. Once the transition amount was determined and accepted in that year, the consequential one-fifth apportionments for the subsequent four years were purely mechanical in nature and did not warrant a repetitive examination. The assessee further demonstrated that the Form No. 29B audit report, the Ind-AS transition workings, and the assessment order for A.Y. 2018-19 were all available before the Assessing Officer at the time of completing the assessmen We find considerable merit in the submission of the assessee. The transition amount under section 115JB(2C) is a one computation arising on the date of first-time adoption of Ind -fifth of such amount is to be added to the book Antony Lara Enviro Solutions Pvt. Ltd. 7 ITA No. 3505/MUM/2025 The learned PCIT has proceeded on the premise that the Assessing Officer omitted to verify whether the transition amount utilised for MAT purposes was computed after excluding capital reserve and securities premium, as mandated by clause (iii) of the Explanation to section 115JB(2C). It is on this perceived absence of inquiry that the jurisdiction under section 263 has been invoked by he other hand, the assessee has consistently maintained that the transition amount was duly computed in accordance with AS requirements, after excluding capital reserve and securities premium, and that this very computation was subjected to detailed AS adoption. Once the transition amount was determined and accepted in that year, fifth apportionments for the subsequent four years were purely mechanical in nature and did not warrant a repetitive examination. The assessee further demonstrated that the AS transition workings, and the 19 were all available before the Assessing Officer at the time of completing the assessment for the We find considerable merit in the submission of the assessee. The transition amount under section 115JB(2C) is a one-time time adoption of Ind-AS. nt is to be added to the book Printed from counselvise.com profit in each of the four succeeding previous years. Once the foundational figure has been computed and examined in the first year—and, significantly, accepted by the Assessing Officer no statutory warrant for a fres amount in subsequent years. What remains in later years is merely arithmetical apportionment, not a fresh adjudication. 4.7 In the present case, the assessment order for A.Y. 2018 placed before us, clearly indicates tha ₹41,40,28,675/- was scrutinised and accepted. The learned PCIT does not dispute this fact; his grievance is only that the Assessing Officer did not again verify the composition of the same transition amount in the year under cons such a view overlooks the settled principle that where a matter stands examined and accepted in the foundational year, the Assessing Officer cannot be faulted for not reopening or redetermining it in every succeeding y assessee has consistently followed the same computation mechanism and furnished all requisite particulars. 4.8 The computation of book profit, forming part of the return of income and reproduced below for clarity, shows that the addition of ₹8,28,05,735/ framework already subjected to audit under Form No. 29B: Schedule 9 Minimum alternative tax Antony Lara Enviro Solutions Pvt. Ltd. ITA No. 3505/MUM/2025 profit in each of the four succeeding previous years. Once the foundational figure has been computed and examined in the first and, significantly, accepted by the Assessing Officer no statutory warrant for a fresh determination of the very same amount in subsequent years. What remains in later years is merely arithmetical apportionment, not a fresh adjudication. In the present case, the assessment order for A.Y. 2018 placed before us, clearly indicates that the transition amount of was scrutinised and accepted. The learned PCIT does not dispute this fact; his grievance is only that the Assessing Officer did not again verify the composition of the same transition amount in the year under consideration. In our considered opinion, such a view overlooks the settled principle that where a matter stands examined and accepted in the foundational year, the Assessing Officer cannot be faulted for not reopening or redetermining it in every succeeding year, particularly when the assessee has consistently followed the same computation mechanism and furnished all requisite particulars. The computation of book profit, forming part of the return of income and reproduced below for clarity, shows that the 8,28,05,735/- was embedded in the accounting framework already subjected to audit under Form No. 29B: Minimum alternative tax Antony Lara Enviro Solutions Pvt. Ltd. 8 ITA No. 3505/MUM/2025 profit in each of the four succeeding previous years. Once the foundational figure has been computed and examined in the first and, significantly, accepted by the Assessing Officer—there is h determination of the very same amount in subsequent years. What remains in later years is merely arithmetical apportionment, not a fresh adjudication. In the present case, the assessment order for A.Y. 2018-19, t the transition amount of was scrutinised and accepted. The learned PCIT does not dispute this fact; his grievance is only that the Assessing Officer did not again verify the composition of the same transition ideration. In our considered opinion, such a view overlooks the settled principle that where a matter stands examined and accepted in the foundational year, the Assessing Officer cannot be faulted for not reopening or ear, particularly when the assessee has consistently followed the same computation The computation of book profit, forming part of the return of income and reproduced below for clarity, shows that the one-fifth was embedded in the accounting framework already subjected to audit under Form No. 29B: Printed from counselvise.com New profit before tax as per P& L A/c Less: Provision for Tax in P&L A/c Net Profit after tax (A) Additions Provision for Current Tax Transition Amount u/s 115JB(2C) Credits to other comprehensive income u/s 115JB(2A)(a) Total additions (B) Deletions Deferred Tax credited to P&L a/c Withdrawal from reserve or provisions Total deletions (C) Book Profit (A+B-C) Mat on book profit Mat with SC & Cess on book profit Whether earning solely in Foreign Exchange in Intl. Financial Services Centre? Depreciation debited to P&L a/c (For 29B only) Policies, standards & methods used in accounts laid before AGM are in P&L a/c 4.9 The Assessing Officer had the complete MAT computation, the audited financials, and the earlier assessment on record. The mere absence of a further inquiry, when all material was already available and the issue itself was accepted finding, cannot by itself render the assessment “erroneous” in the sense contemplated under section 263. As repeatedly held by the Hon’ble Supreme Court, the phrase “erroneous and prejudicial to the interests of the understood in a manner consistent with the twin requirements of error and prejudice; it does not authorise the revisional authority to substitute its subjective degree of inquiry for that of the Assessing Officer when the latter’s view is one. Antony Lara Enviro Solutions Pvt. Ltd. ITA No. 3505/MUM/2025 New profit before tax as per P& L A/c Less: Provision for Tax in P&L A/c Provision for Current Tax 8,41,11,175 Transition Amount u/s 115JB(2C) 8,28,05,735 Credits to other comprehensive income 2,04,186 Deferred Tax credited to P&L a/c 4,62,66,344 Withdrawal from reserve or provisions 41,70,726 Cess on book profit Whether earning solely in Foreign Exchange in Intl. Financial Services No Depreciation debited to P&L a/c (For 20,63,909 Policies, standards & methods used in accounts laid before AGM are followed Yes The Assessing Officer had the complete MAT computation, the audited financials, and the earlier assessment on record. The mere absence of a further inquiry, when all material was already available and the issue itself was derivative of an earlier year’s accepted finding, cannot by itself render the assessment “erroneous” in the sense contemplated under section 263. As repeatedly held by the Hon’ble Supreme Court, the phrase “erroneous and prejudicial to the interests of the Revenue” must be understood in a manner consistent with the twin requirements of error and prejudice; it does not authorise the revisional authority to substitute its subjective degree of inquiry for that of the Assessing Officer when the latter’s view is a plausible and legally sustainable Antony Lara Enviro Solutions Pvt. Ltd. 9 ITA No. 3505/MUM/2025 29,78,03,548 3,78,44,831 25,99,58,717 16,71,21,096 5,04,37,070 37,66,42,743 6,96,78,907 8,03,81,587 The Assessing Officer had the complete MAT computation, the audited financials, and the earlier assessment on record. The mere absence of a further inquiry, when all material was already derivative of an earlier year’s accepted finding, cannot by itself render the assessment “erroneous” in the sense contemplated under section 263. As repeatedly held by the Hon’ble Supreme Court, the phrase Revenue” must be understood in a manner consistent with the twin requirements of error and prejudice; it does not authorise the revisional authority to substitute its subjective degree of inquiry for that of the Assessing a plausible and legally sustainable Printed from counselvise.com 4.10 We therefore hold that the present case does not fall within the sweep of Explanation 2(b) to section 263. The foundational transition amount having been examined threadbare in A.Y. 2018 19, and the current ye the Assessing Officer cannot be said to have committed any error warranting revision. 5. In view of the foregoing discussion, we are of the considered opinion that the assumption of jurisdiction by the learned under section 263 is unwarranted. The impugned revisional order is accordingly set aside. The assessment order dated 09.09.2022 is restored. 6. The grounds of appeal raised by the assessee 7. In the result, the appeal of the assessee is Order pronounced in the open Court on Sd/- (RAJ KUMAR CHAUHA JUDICIAL MEMBER Mumbai; Dated: 26/11/2025 Rahul Sharma, Sr. P.S. Antony Lara Enviro Solutions Pvt. Ltd. ITA No. 3505/MUM/2025 We therefore hold that the present case does not fall within the sweep of Explanation 2(b) to section 263. The foundational transition amount having been examined threadbare in A.Y. 2018 19, and the current year being merely a mechanical apportionment, the Assessing Officer cannot be said to have committed any error In view of the foregoing discussion, we are of the considered opinion that the assumption of jurisdiction by the learned under section 263 is unwarranted. The impugned revisional order is accordingly set aside. The assessment order dated 09.09.2022 is of appeal raised by the assessee are In the result, the appeal of the assessee is allowed. ounced in the open Court on 26/11/2025. Sd/ RAJ KUMAR CHAUHAN) (OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Antony Lara Enviro Solutions Pvt. Ltd. 10 ITA No. 3505/MUM/2025 We therefore hold that the present case does not fall within the sweep of Explanation 2(b) to section 263. The foundational transition amount having been examined threadbare in A.Y. 2018- ar being merely a mechanical apportionment, the Assessing Officer cannot be said to have committed any error In view of the foregoing discussion, we are of the considered opinion that the assumption of jurisdiction by the learned PCIT under section 263 is unwarranted. The impugned revisional order is accordingly set aside. The assessment order dated 09.09.2022 is are allowed. allowed. /11/2025. Sd/- OM PRAKASH KANT) ACCOUNTANT MEMBER Printed from counselvise.com Copy of the Order forwarded to 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Antony Lara Enviro Solutions Pvt. Ltd. ITA No. 3505/MUM/2025 Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Antony Lara Enviro Solutions Pvt. Ltd. 11 ITA No. 3505/MUM/2025 BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "