ANUH PHARMA LIMITED ,MUMBAI V. PRINCIPAL COMMISSIONER OF INCOME TAX, CIRCLE -5, MUMBAI

ITA 2911/MUM/2025

AI Insights

The case involves Anuh Pharma Ltd. appealing against the revisional order passed by the Principal Commissioner of Income Tax under section 263 of the Income Tax Act, 1961, for the assessment year 2020-21. The appeal contested the deductions claimed under sections 80G and 80IA of the Act. The Tribunal examined whether the deductions were rightly allowed by the Assessing Officer. For section 80G, the Tribunal found that the Assessing Officer had properly examined the claim and allowed the deduction. However, for section 80IA, the Tribunal upheld the Principal Commissioner's decision, agreeing that the cooling tower did not meet the criteria for power generation as required under the Act.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 777438 (ITAT-MUMBAI)
• Duration Of Justice: 5 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-09-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Appeal Filed On: 28-04-2025
• Other Referred Cases: CIT vs. Tanfac Industries Ltd, Saf Yeast Company Pvt. Ltd. vs. DCIT, First American (India) Pvt. Ltd. vs. ACIT, JMS Mining (P.) Ltd vs. PCIT, Goldman Sachs vs Jt. CIT, National Seeds Corpn. Ltd. vs. Addl. CIT, Allegis Services (India) (P.) Ltd. vs. Asstt. CIT, FNF India (P.) Ltd. vs. Asstt. CIT, Budharaja and Co. vs. CIT, Commissioner of Income Tax vs. Srivenkateswara Hatcheries (P) Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: RAJESH KUMAR YADAV
• Assessee Lawyers: SANDEIP S. NAGAR VIRTUALLY
• Keywords: Set aside; Business income; Business expenditure; Rule of consistency; Capital expenditure; Charitable institution; Revision of order; Prejudicial to interest; CHAPTER IV
• Section: 143(3); 142(1); 263; 131; 37; 37(1); 80C; 80G

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “A” MUMBAI BEFORE SHRI SANDEEP GOSAIN (JUDICIAL MEMBER) AND SHRI OM PRAKASH KANT (ACCOUNTANT MEMBER) ITA No. 2911/MUM/2025 Assessment Year: 2020-21 Anuh Pharma Ltd., 3-A, North Wing, Shiv Sagar Estate, Dr. A.B. Road, Worli Mumbai-400018. Vs. Pr. CIT-5, 5th floor, R.No. 515, Aayakar Bhavan, M.K. Road, Mumbai-400020. PAN NO. AAACA 4478 P Appellant Respondent Assessee by : Mr. Sandeip S. Nagar (Virtually appear) a/w Mr. Vipul Jain Revenue by : Mr. Rajesh Kumar Yadav, CIT-DR Date of Hearing : 19/08/2025 Date of pronouncement : 30/09/2025 ORDER PER OM PRAKASH KANT, AM This appeal by the assessee is directed against revisional order dated 19.03.2025 passed by the Ld. Principal Commissioner of Income-tax, Mumbai – 5 [in short the Ld. ‘PCIT’] under section 263 of the Income-tax Act, 1961 ( in short the ‘Act’ ) for assessment year 2020-21, raising following grounds: 1.0 That on the facts and in the circumstances of the case, the impugned order passed u/s 263 is grossly arbitrary and bad in Printed from counselvise.com law in relation to the issues raised and adjudicated therein and needs to be summarily deleted. 1.1 That on the facts and in the circumstances o Ld. PCIT was not justified and grossly erred in initiating proceedings u/s 263 of the Act without appreciating the fact that the order u/s 143(3) passed by the Ld. AO was neither erroneous nor prejudicial to interests of the Revenue and the proceedings are bad in law. 2.0 That, on the facts and in the circumstances of the case, and without prejudice to above, the Ld. PCIT was not justified and grossly erred in holding that, the assessee has wrongly claimed deduction u/s 80G on CSR fact that the claim was fully justified and in prevailing provisions of the law, which had been duly examined by the Ld AO in assessment proceedings. 3.0 That on the facts and in the circumstances of the case without prejudice to Ground above, the Ld. PCIT was not justified and grossly erred in holding that, the assessee has wrongly claimed deduction u/s 80 that the claim was fully justified and in provisions of the law, which had been duly examined by the Ld AO in assessment proceedings. 4.0 That on the facts and in the circumstances of the case, the Ld. PCIT was not justified and grossly erred in holding that, the assessee has wrongly claime that, the claim of deduction has been duly allowed by various judicial precedents on the same facts which had been duly considered by the Ld AO in assessment 2. Briefly stated, facts of the case are that the as return of income for the year under consideration on 10.02.2021 declaring total income ‘the Act’) at Rs.11,85,07,580/ alternative tax (MAT Provision) the assessee revised its return of income on 12.02.2021 declaring the same total income and book profit under MAT. Thereafter, the return was selected for complete scrutiny on the issues including ITA No. 2911/MUM/2025 law in relation to the issues raised and adjudicated therein and needs to be summarily deleted. 1.1 That on the facts and in the circumstances of the case, the Ld. PCIT was not justified and grossly erred in initiating proceedings u/s 263 of the Act without appreciating the fact that the order u/s 143(3) passed by the Ld. AO was neither erroneous nor prejudicial to interests of the Revenue and the proceedings are bad in law. 2.0 That, on the facts and in the circumstances of the case, and without prejudice to above, the Ld. PCIT was not justified and grossly erred in holding that, the assessee has wrongly claimed deduction u/s 80G on CSR expenses without appreciating the fact that the claim was fully justified and in-line with the prevailing provisions of the law, which had been duly examined by the Ld AO in assessment proceedings. 3.0 That on the facts and in the circumstances of the case without prejudice to Ground above, the Ld. PCIT was not justified and grossly erred in holding that, the assessee has wrongly claimed deduction u/s 80-IA(4)(iv) without appreciating the fact that the claim was fully justified and in-line with the prev provisions of the law, which had been duly examined by the Ld AO in assessment proceedings. 4.0 That on the facts and in the circumstances of the case, the Ld. PCIT was not justified and grossly erred in holding that, the assessee has wrongly claimed deduction without appreciating that, the claim of deduction has been duly allowed by various judicial precedents on the same facts which had been duly considered by the Ld AO in assessment proceedings. Briefly stated, facts of the case are that the as return of income for the year under consideration on 10.02.2021 declaring total income under the regular provisions of at Rs.11,85,07,580/- and book profit under minimum alternative tax (MAT Provision) of Rs.17,58,92,193/- the assessee revised its return of income on 12.02.2021 declaring the same total income and book profit under MAT. Thereafter, the return was selected for complete scrutiny on the issues including Anuh Pharma Ltd 2 ITA No. 2911/MUM/2025 law in relation to the issues raised and adjudicated therein and f the case, the Ld. PCIT was not justified and grossly erred in initiating proceedings u/s 263 of the Act without appreciating the fact that the order u/s 143(3) passed by the Ld. AO was neither erroneous nor prejudicial to interests of the Revenue and therefore the 2.0 That, on the facts and in the circumstances of the case, and without prejudice to above, the Ld. PCIT was not justified and grossly erred in holding that, the assessee has wrongly claimed expenses without appreciating the line with the prevailing provisions of the law, which had been duly examined 3.0 That on the facts and in the circumstances of the case and without prejudice to Ground above, the Ld. PCIT was not justified and grossly erred in holding that, the assessee has wrongly IA(4)(iv) without appreciating the fact line with the prevailing provisions of the law, which had been duly examined by the Ld 4.0 That on the facts and in the circumstances of the case, the Ld. PCIT was not justified and grossly erred in holding that, the d deduction without appreciating that, the claim of deduction has been duly allowed by various judicial precedents on the same facts which had been duly Briefly stated, facts of the case are that the assessee filed its return of income for the year under consideration on 10.02.2021 under the regular provisions of Act (in short under minimum -. Subsequently, the assessee revised its return of income on 12.02.2021 declaring the same total income and book profit under MAT. Thereafter, the return was selected for complete scrutiny on the issues including Printed from counselvise.com verification of deduction claimed f 80IA of the Act. The assessment was completed u/s 143(3) r.w.s. 144B of the Act on 23.09.2022, determining total income at Rs.12,14,27,357/-. 2.1 Subsequently, the Ld. PCIT called for the record and after examination, he was assessment order was erroneous in so far as prejudicial to the interest of Revenue. Rs.1,62,14,945/- claimed on effect was erroneously claimed by the assessee. assessee had debited Rs.30,20,8 Social Responsibility and disallowed the said expenses under the head profit and gains of business said expenditure assessee claimed deduction u/s 80G of the Act amounting to Rs.18,29,265/ accordance with law 2.2 The Ld. PCIT also noted that the inqui which ought to have been carried out in the facts and circumstances of case and in law the Assessing Officer. 2.3 Accordingly, the learned PCIT issued a show cause notice under section 263 of the A ITA No. 2911/MUM/2025 verification of deduction claimed for industrial undertaking u/s 80IA of the Act. The assessment was completed u/s 143(3) r.w.s. 144B of the Act on 23.09.2022, determining total income at Subsequently, the Ld. PCIT called for the record and after examination, he was of the view that on two specific issues, the order was erroneous in so far as prejudicial to the interest of Revenue. Firstly, deduction u/s 80IA claimed on cooling tower for generating cool effect was erroneously claimed by the assessee. assessee had debited Rs.30,20,800/- under the head ‘Corporate (CSR) ’ activities in the profit and loss account and disallowed the said expenses while the computing under the head profit and gains of business, however against the said expenditure assessee claimed deduction u/s 80G of the Act amounting to Rs.18,29,265/-, which was not allowable accordance with law . The Ld. PCIT also noted that the inquiry on these two issues, which ought to have been carried out in the facts and case and in law , but had not been carried out by the Assessing Officer. Accordingly, the learned PCIT issued a show cause notice under section 263 of the Act requiring the assessee to explain as to Anuh Pharma Ltd 3 ITA No. 2911/MUM/2025 or industrial undertaking u/s 80IA of the Act. The assessment was completed u/s 143(3) r.w.s. 144B of the Act on 23.09.2022, determining total income at Subsequently, the Ld. PCIT called for the record and after two specific issues, the order was erroneous in so far as prejudicial to the deduction u/s 80IA amounting to cooling tower for generating cooling effect was erroneously claimed by the assessee. Secondly, the under the head ‘Corporate ’ activities in the profit and loss account while the computing of income however against the said expenditure assessee claimed deduction u/s 80G of the Act which was not allowable in on these two issues, which ought to have been carried out in the facts and not been carried out by Accordingly, the learned PCIT issued a show cause notice ct requiring the assessee to explain as to Printed from counselvise.com why the assessment order should not be treated as erroneous in so far as it is prejudicial to the interests of the Revenue. Upon due consideration of the submissions advanced on behalf of the assessee, the learned section 80IA of the Act had been erroneously allowed, both on account of absence of inquiry as well as on account of incorrect application of law. Likewise, with respect to the deduction claimed under section 80G of the Act amounting to Rs.18,19,265/ learned PCIT recorded that the Assessing Officer had failed to conduct any inquiry and that the allowance of the deduction was based on an erroneous interpretation of the statutory provision. 3. Aggrieved with appeal before us. 4. Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 146. 5. In ground No. 1, the assessee has challenged the finding of the Ld. PCIT submitting that proper and detailed inquiry was conducted by the Assessing Officer before passing the assessment order on both the issues. 5.1 The Ld. counsel for the assessee referred to Paper Book page 28 to 31, which is a notice dated 31.01.2022 issued u/s 142(1 the Act. The Ld. counsel referred to the page 30 wherein a query asking the assessee to establish the genuineness of the deduction ITA No. 2911/MUM/2025 why the assessment order should not be treated as erroneous in so far as it is prejudicial to the interests of the Revenue. Upon due consideration of the submissions advanced on behalf of the assessee, the learned PCIT held that the claim of deduction under section 80IA of the Act had been erroneously allowed, both on account of absence of inquiry as well as on account of incorrect application of law. Likewise, with respect to the deduction claimed G of the Act amounting to Rs.18,19,265/ learned PCIT recorded that the Assessing Officer had failed to conduct any inquiry and that the allowance of the deduction was based on an erroneous interpretation of the statutory provision. Aggrieved with the finding of the Ld. PCIT, the assessee is in Before us, the Ld. counsel for the assessee filed a Paper Book containing pages 1 to 146. ground No. 1, the assessee has challenged the finding of the that proper and detailed inquiry was conducted by the Assessing Officer before passing the assessment order on The Ld. counsel for the assessee referred to Paper Book page 28 to 31, which is a notice dated 31.01.2022 issued u/s 142(1 the Act. The Ld. counsel referred to the page 30 wherein a query asking the assessee to establish the genuineness of the deduction Anuh Pharma Ltd 4 ITA No. 2911/MUM/2025 why the assessment order should not be treated as erroneous in so far as it is prejudicial to the interests of the Revenue. Upon due consideration of the submissions advanced on behalf of the PCIT held that the claim of deduction under section 80IA of the Act had been erroneously allowed, both on account of absence of inquiry as well as on account of incorrect application of law. Likewise, with respect to the deduction claimed G of the Act amounting to Rs.18,19,265/-, the learned PCIT recorded that the Assessing Officer had failed to conduct any inquiry and that the allowance of the deduction was based on an erroneous interpretation of the statutory provision. the finding of the Ld. PCIT, the assessee is in Before us, the Ld. counsel for the assessee filed a Paper Book ground No. 1, the assessee has challenged the finding of the that proper and detailed inquiry was conducted by the Assessing Officer before passing the assessment order on The Ld. counsel for the assessee referred to Paper Book page 28 to 31, which is a notice dated 31.01.2022 issued u/s 142(1) of the Act. The Ld. counsel referred to the page 30 wherein a query asking the assessee to establish the genuineness of the deduction Printed from counselvise.com claimed has been made. I 01.03.2022 explained about the deduction u/s 80IA clai eligibility under the provisions of the Act. Further, the Ld. counsel referred to Paper Book page 48 which is a query issued by the Assessing Officer through 20.07.2022 asking the assessee to provide details o machinery of the power undertaking along with copy of the bills raised by undertaking for consumption of cooling power. Before us, the Ld. counsel for the assessee referred to Paper Book page 49 to 53 which comprises note on the eligibility of through cooling tower. 5.2 Regarding the CSR the Act, the Ld. counsel referred to Paper Book page 54 which is a show cause notice dated 20.09.2022 issued by the assessment unit asking the assessee as Act be disallowed in the light of legislative intent behind section 80G of the Act. The Ld. counsel referred to Paper Book page 52 to 61 of the Paper Book containing detailed reply for deduction u/s 80G of the Act coordinate benches of 5.3 In the light of the above assessee submitted that Assessing Officer has carried out all the necessary inquiries which ought to facts and circumstances in the case of the assessee and therefore, ITA No. 2911/MUM/2025 made. In response the assessee vide letter dated 01.03.2022 explained about the deduction u/s 80IA clai eligibility under the provisions of the Act. Further, the Ld. counsel referred to Paper Book page 48 which is a query issued by the through notice u/s 142(1) of the Act dated 20.07.2022 asking the assessee to provide details o machinery of the power undertaking along with copy of the bills raised by undertaking for consumption of cooling power. Before us, the Ld. counsel for the assessee referred to Paper Book page 49 to 53 which comprises note on the eligibility of power generated cooling tower. CSR expenses claimed as donation the Act, the Ld. counsel referred to Paper Book page 54 which is a show cause notice dated 20.09.2022 issued by the assessment unit asking the assessee as why the deduction claimed u/s 80G of the Act be disallowed in the light of legislative intent behind section 80G of the Act. The Ld. counsel referred to Paper Book page 52 to 61 of the Paper Book containing detailed reply for 80G of the Act relying on the various decisions of the coordinate benches of Tribunal. n the light of the above discussion, the Ld. counsel for the assessee submitted that Assessing Officer has carried out all the necessary inquiries which ought to have been carried out in the facts and circumstances in the case of the assessee and therefore, Anuh Pharma Ltd 5 ITA No. 2911/MUM/2025 n response the assessee vide letter dated 01.03.2022 explained about the deduction u/s 80IA claimed and its eligibility under the provisions of the Act. Further, the Ld. counsel referred to Paper Book page 48 which is a query issued by the notice u/s 142(1) of the Act dated 20.07.2022 asking the assessee to provide details of plant and machinery of the power undertaking along with copy of the bills raised by undertaking for consumption of cooling power. Before us, the Ld. counsel for the assessee referred to Paper Book page 49 to power generated as donation u/s 80G of the Act, the Ld. counsel referred to Paper Book page 54 which is a show cause notice dated 20.09.2022 issued by the assessment unit why the deduction claimed u/s 80G of the Act be disallowed in the light of legislative intent behind section 80G of the Act. The Ld. counsel referred to Paper Book page 52 to 61 of the Paper Book containing detailed reply for justification of relying on the various decisions of the , the Ld. counsel for the assessee submitted that Assessing Officer has carried out all the carried out in the facts and circumstances in the case of the assessee and therefore, Printed from counselvise.com the clause (a) of Explanation 2 to section 263 of the Act cannot be invoked in the case of the assessee. T decision of the Hon’bl Integrate Solutions Pvt. Ltd. (2025) 173 taxmann.com 774 (SC) wherein it is held that the assessee does not have control over the pen of the Assessing Officer and once, the Assessing Officer carried out the investigation but does not make any addition it can be taken that he accepted the plea and stand of the assessee. The Ld. counsel also relied on the decision Hon’ble in the case of Commissioner of Income Estate Developers Pvt. Ltd. wherein it is held that the Assessing Officer having examined relevant material on record passed assessment order in case assessee, the Ld. PCIT without rejecting those documents could not pass an revisional order setting aside assessment with a direction to Assessing Officer to examine material available on record afresh. 5.4 Per contra, the Ld. DR re submitted that the case was selected for scrutiny on various grounds inter-alia (i) for stock valuation; (iii) weighted deduction for expenditure on scientific research; and (iv) deduction in r u/s 80IA of the Act. He submitted that in the assessment order passed u/s 143(3) of the Act dated 23.09.2022, the Ld. Assessing Officer have dealt the issue of claim of other deduction under ITA No. 2911/MUM/2025 clause (a) of Explanation 2 to section 263 of the Act cannot be ed in the case of the assessee. The Ld. counsel referred to the decision of the Hon’ble Supreme Court in the case of Integrate Solutions Pvt. Ltd. (2025) 173 taxmann.com 774 (SC) wherein it is held that the assessee does not have control over the of the Assessing Officer and once, the Assessing Officer carried out the investigation but does not make any addition it can be taken that he accepted the plea and stand of the assessee. The Ld. counsel also relied on the decision Hon’ble High Court of Raj of Commissioner of Income-tax Kota v. Deepak Real Estate Developers Pvt. Ltd. reported in (2014) 52 taxmann.com 75, wherein it is held that the Assessing Officer having examined relevant material on record passed assessment order in case assessee, the Ld. PCIT without rejecting those documents could not pass an revisional order setting aside assessment with a direction to Assessing Officer to examine material available on record afresh. Per contra, the Ld. DR referred to the assessment order and submitted that the case was selected for scrutiny on various (i) for verification of certain relief weighted deduction for expenditure on scientific deduction in respect of industrial undertaking u/s 80IA of the Act. He submitted that in the assessment order passed u/s 143(3) of the Act dated 23.09.2022, the Ld. Assessing Officer have dealt the issue of claim of other deduction under Anuh Pharma Ltd 6 ITA No. 2911/MUM/2025 clause (a) of Explanation 2 to section 263 of the Act cannot be he Ld. counsel referred to the e Supreme Court in the case of V-con Integrate Solutions Pvt. Ltd. (2025) 173 taxmann.com 774 (SC) wherein it is held that the assessee does not have control over the of the Assessing Officer and once, the Assessing Officer carried out the investigation but does not make any addition it can be taken that he accepted the plea and stand of the assessee. The Ld. Court of Rajasthan tax Kota v. Deepak Real reported in (2014) 52 taxmann.com 75, wherein it is held that the Assessing Officer having examined relevant material on record passed assessment order in case of assessee, the Ld. PCIT without rejecting those documents could not pass an revisional order setting aside assessment with a direction to Assessing Officer to examine material available on record afresh. sment order and submitted that the case was selected for scrutiny on various verification of certain relief or losses; (ii) weighted deduction for expenditure on scientific espect of industrial undertaking u/s 80IA of the Act. He submitted that in the assessment order passed u/s 143(3) of the Act dated 23.09.2022, the Ld. Assessing Officer have dealt the issue of claim of other deduction under Printed from counselvise.com Schedule BP of Rs.1,02,50,713/ disallowed the claim of deduction Rs.24,16,777/-. On another issue of stock valuation, the Assessing Officer accepted the submission of the assessee and noted that no adverse interference had been drawn. O deduction u/s 35(2AB) of the Act development, the Assessing Officer after considering submission of the assessee allowed the weighted deduction of Rs.2,88,83,000/ out of claim of Rs.3,03,90,498/ Rs.5,03,000/-. On the issue of taxability of business off u/s 41 of the Act also, the Assessing Officer accepted the submission of the assessee and duly recorded in the assessment order that no adverse interfer 5.6 The ld DR emphasized that o for industrial undertaking also the Assessing Officer considered the submission of the assessee and held that no adverse inference was drawn. The Ld. DR accordingly submi recorded complete submission of the assessee in the assessment order. But the submission dated 16.08.2023 claimed by the assessee as filed before the AO, eligibility of ‘cooling tower neither been recorded any reference of the said letter submitted that no evidence in support in the form of ITA No. 2911/MUM/2025 Schedule BP of Rs.1,02,50,713/- on pages 2 to 17 wherein he disallowed the claim of deduction of cess amounting to another issue of stock valuation, the Assessing Officer accepted the submission of the assessee and noted that no e interference had been drawn. On the issue of weighted deduction u/s 35(2AB) of the Act for in-house research and development, the Assessing Officer after considering submission of the assessee allowed the weighted deduction of Rs.2,88,83,000/ out of claim of Rs.3,03,90,498/- and disallowed excess amount of n the issue of taxability of business off u/s 41 of the Act also, the Assessing Officer accepted the submission of the assessee and duly recorded in the assessment order that no adverse interference had been drawn. The ld DR emphasized that on the issue of deduction claimed for industrial undertaking also the Assessing Officer considered the submission of the assessee and held that no adverse inference was drawn. The Ld. DR accordingly submitted that the Assessing Officer recorded complete submission of the assessee in the assessment order. But the submission dated 16.08.2023, which has been claimed by the assessee as filed before the AO, on the issue of cooling tower’ and ‘power generation been recorded or noted in the assessment order nor there is any reference of the said letter in his order. Further, the Ld. DR submitted that no evidence in support in the form of Anuh Pharma Ltd 7 ITA No. 2911/MUM/2025 on pages 2 to 17 wherein he cess amounting to another issue of stock valuation, the Assessing Officer accepted the submission of the assessee and noted that no the issue of weighted house research and development, the Assessing Officer after considering submission of the assessee allowed the weighted deduction of Rs.2,88,83,000/- disallowed excess amount of n the issue of taxability of business liability written off u/s 41 of the Act also, the Assessing Officer accepted the submission of the assessee and duly recorded in the assessment the issue of deduction claimed for industrial undertaking also the Assessing Officer considered the submission of the assessee and held that no adverse inference was tted that the Assessing Officer recorded complete submission of the assessee in the assessment , which has been on the issue of wer generation facility’ has in the assessment order nor there is . Further, the Ld. DR submitted that no evidence in support in the form of Printed from counselvise.com acknowledgement of uploading 16.08.2023 before the the assessee and therefore, it cannot be established that asse had filed said detail plant. Therefore, the Assessing inquiry which ought to have been carried out process of cooling only involved variation in the thermal temperature and does not amount to production of the p in common parlance is enquiry on this issue from the assessee. 5.7 Regarding the issue of deduction u/s 80G also submitted that the Assessing Officer has failed to carry out inquiry as how the deduction was the nature of voluntarily payment. T assessee has incurred CSR expenses under the mandatory provisions of the Companies Act, 2013 and therefore, same looses the character of voluntariness required as prim donation u/s 80G of the Act. 6. We have carefully considered the rival submissions and perused the material placed on record. The controversy to be adjudicated is whether the assessment order can be said to be “erroneous in so far as it Revenue” within the meaning of section 263 of the Act, for want of ITA No. 2911/MUM/2025 acknowledgement of uploading electronically of such reply before the ‘faceless assessment unit’ has been filed by the assessee and therefore, it cannot be established that asse details justifying the deduction on cool plant. Therefore, the Assessing Officer has failed in carry inquiry which ought to have been carried out in the case. As ing only involved variation in the thermal temperature and does not amount to production of the p in common parlance is the electricity, the AO was required to make enquiry on this issue from the assessee. Regarding the issue of deduction u/s 80G also submitted that the Assessing Officer has failed to carry out inquiry as how the deduction was falling in the definition of a donation in nature of voluntarily payment. The Ld. DR submitted that assessee has incurred CSR expenses under the mandatory provisions of the Companies Act, 2013 and therefore, same looses the character of voluntariness required as primary condition for ion u/s 80G of the Act. We have carefully considered the rival submissions and perused the material placed on record. The controversy to be adjudicated is whether the assessment order can be said to be “erroneous in so far as it is prejudicial to the interests of the Revenue” within the meaning of section 263 of the Act, for want of Anuh Pharma Ltd 8 ITA No. 2911/MUM/2025 such reply dated has been filed by the assessee and therefore, it cannot be established that assessee justifying the deduction on cooling tower carrying out the in the case. As ing only involved variation in the thermal temperature and does not amount to production of the power which icity, the AO was required to make Regarding the issue of deduction u/s 80G also, the Ld. DR submitted that the Assessing Officer has failed to carry out inquiry definition of a donation in he Ld. DR submitted that assessee has incurred CSR expenses under the mandatory provisions of the Companies Act, 2013 and therefore, same looses ary condition for We have carefully considered the rival submissions and perused the material placed on record. The controversy to be adjudicated is whether the assessment order can be said to be is prejudicial to the interests of the Revenue” within the meaning of section 263 of the Act, for want of Printed from counselvise.com inquiry by the Assessing Officer, as contemplated in clause (a) of Explanation 2 to section 263. 6.1 As far as issue of deduction u/s 80IA of the Act admittedly the notice u/s 142(1) of the Act dated 31.01.2022 was issued and reply of the same is also on the record. The relevant query and reply is reproduced as under: “ Query: 5. You have claimed deduction under section 80 1A/80-IB/80- the undertaking. Please estabalish the genuineness of deduction claimed. Reply: 6.0 Deduction u/s 80IA of the Act: 6.1 The Company is a listed company engaged in the business of manufacture of bulk drugs trading in pharmaceutical products and in Development facility. The assessee from AY 2019 has started claiming deduction u/s 80IA on the power generated in form of cooling power. 6.2 In this regard, the assessee would like to submit as under: i. Details of the working of section 801A deduction is attached as Annexure – 18. ii. Audited Accounts of the undertaking is attached as Annexure 19. iii. Form 10CCB uploaded certified by the CA is Annexure – 20. iv. It would be relevant to note that, for claiming section 80IA deduction on power, there is no condition for taking any prior approval from the government authorities, without prejudice to the same and as required by your goods ITA No. 2911/MUM/2025 inquiry by the Assessing Officer, as contemplated in clause (a) of Explanation 2 to section 263. As far as issue of deduction u/s 80IA of the Act admittedly the notice u/s 142(1) of the Act dated 31.01.2022 was issued and reply of the same is also on the record. The relevant query and reply is reproduced as under: 5. You have claimed deduction under section 80 -IC which is significantly high vis-is turnover of the undertaking. Please estabalish the genuineness of claimed. 6.0 Deduction u/s 80IA of the Act: 6.1 The Company is a listed company engaged in the business of manufacture of bulk drugs and pharmaceutical formulations and trading in pharmaceutical products and in-house Research and Development facility. The assessee from AY 2019-20 onwards has started claiming deduction u/s 80IA on the power generated in form of cooling power. regard, the assessee would like to submit as under: i. Details of the working of section 801A deduction is attached as 18. ii. Audited Accounts of the undertaking is attached as Annexure iii. Form 10CCB uploaded certified by the CA is attached as 20. iv. It would be relevant to note that, for claiming section 80IA deduction on power, there is no condition for taking any prior approval from the government authorities, without prejudice to the same and as required by your goodself the relevant copies of Anuh Pharma Ltd 9 ITA No. 2911/MUM/2025 inquiry by the Assessing Officer, as contemplated in clause (a) of As far as issue of deduction u/s 80IA of the Act is concerned admittedly the notice u/s 142(1) of the Act dated 31.01.2022 was issued and reply of the same is also on the record. The relevant 5. You have claimed deduction under section 80-1/80- is turnover of the undertaking. Please estabalish the genuineness of 6.1 The Company is a listed company engaged in the business of and pharmaceutical formulations and house Research and 20 onwards has started claiming deduction u/s 80IA on the power generated regard, the assessee would like to submit as under: i. Details of the working of section 801A deduction is attached as ii. Audited Accounts of the undertaking is attached as Annexure – attached as iv. It would be relevant to note that, for claiming section 80IA deduction on power, there is no condition for taking any prior approval from the government authorities, without prejudice to elf the relevant copies of Printed from counselvise.com the approval plan of the government authorities are attached as Annexure - 21 for your goodself ready reference. v. The address of undertaking is E Boisar, Maharashtra 401506. vi. The assessee is not b (SEZ). The asses vii. The power in form the cooling power i.e. Tonnes of Refrigeration (TR) is being captively consumed by the other manufacturing units. viii. The assessee has stated claiming the deduction from the earlier AY and the captioned AY is not the initial assessment year, thus there is no purchase of asset in the current AY. 6.3 Further, the section prescribes certain other conditions which are as follows Condition: The undertaking should not be formed by way splitting up or reconstruction of a business already in existence. Compliance: In the present case, the Assessee had started altogether new undertakings which are independent and separate from each other. Hence this condition is fulfilled. Condition: It is not formed by the transfer to a new business of machinery or plant previously used for any other purpose. Compliance: In the present case, the new plant and machinery has been purchased by the Assessee and no plant or machinery are transferred from ex this condition is also fulfilled. Condition: No deduction is admissible under section 801A unless the accounts of the undertakings for which deduction is claimed are audited by an accountant and the assessee furnish with his return of income, the report of such audit in the Form 10CCB duly signed and verified by such accountant Compliance: The Assessee has claimed deduction u/s 80IA in return of income and also filed audit report in Form 10CCB along with return of income. Hence, the said condition is duly complied with. 6.4 Based on above and following the principle of consistency, the Assessee request your goodself to grant deduction u/s 80IA ITA No. 2911/MUM/2025 the approval plan of the government authorities are attached as 21 for your goodself ready reference. . The address of undertaking is E-17/3, E17-4, MIDC, Tarapur, Boisar, Maharashtra 401506. vi. The assessee is not being set-up in special economic zone (SEZ). The asses vii. The power in form the cooling power i.e. Tonnes of Refrigeration (TR) is being captively consumed by the other manufacturing units. viii. The assessee has stated claiming the deduction from the lier AY and the captioned AY is not the initial assessment year, thus there is no purchase of asset in the current AY. 6.3 Further, the section prescribes certain other conditions which are as follows- Condition: The undertaking should not be formed by way splitting up or reconstruction of a business already in existence. Compliance: In the present case, the Assessee had started altogether new undertakings which are independent and separate from each other. Hence this condition is fulfilled. t is not formed by the transfer to a new business of machinery or plant previously used for any other purpose. Compliance: In the present case, the new plant and machinery has been purchased by the Assessee and no plant or machinery are transferred from existing business to new business. Hence, this condition is also fulfilled. Condition: No deduction is admissible under section 801A unless the accounts of the undertakings for which deduction is claimed are audited by an accountant and the assessee furnish with his return of income, the report of such audit in the Form 10CCB duly signed and verified by such accountant Compliance: The Assessee has claimed deduction u/s 80IA in return of income and also filed audit report in Form 10CCB along urn of income. Hence, the said condition is duly complied 6.4 Based on above and following the principle of consistency, the Assessee request your goodself to grant deduction u/s 80IA Anuh Pharma Ltd 10 ITA No. 2911/MUM/2025 the approval plan of the government authorities are attached as 4, MIDC, Tarapur, up in special economic zone vii. The power in form the cooling power i.e. Tonnes of Refrigeration (TR) is being captively consumed by the other viii. The assessee has stated claiming the deduction from the lier AY and the captioned AY is not the initial assessment year, thus there is no purchase of asset in the current AY. 6.3 Further, the section prescribes certain other conditions which Condition: The undertaking should not be formed by way of splitting up or reconstruction of a business already in existence. Compliance: In the present case, the Assessee had started altogether new undertakings which are independent and separate from each other. Hence this condition is fulfilled. t is not formed by the transfer to a new business of machinery or plant previously used for any other purpose. Compliance: In the present case, the new plant and machinery has been purchased by the Assessee and no plant or machinery isting business to new business. Hence, Condition: No deduction is admissible under section 801A unless the accounts of the undertakings for which deduction is claimed are audited by an accountant and the assessee furnishes, along with his return of income, the report of such audit in the Form Compliance: The Assessee has claimed deduction u/s 80IA in return of income and also filed audit report in Form 10CCB along urn of income. Hence, the said condition is duly complied 6.4 Based on above and following the principle of consistency, the Assessee request your goodself to grant deduction u/s 80IA Printed from counselvise.com of the Act in respect of profits and gains derived by an undertakings engaged in generation of 6.2 It is not in dispute that the assessee, in response to notice under section 142(1), furnished certain replies and documents asserting its eligibility for deduction under section 80IA of the Act on account of generation of “cooling power” from the cooling t However, there is a dispute filing of reply in response 20.09.2022. The assessee has claimed that following reply was filed before the Assessing Officer Submission on claiming 801A deduction on Power generated from Cooling Tower 1.0 Anuh Pharma Limited (Company) is manufactures of bulk drugs. The Company has in Tarapur. Company has installed Cooling Tower at plant which generates cooling power. Further, Cooling Power or Refrigeration Power is measured in Tonnes of Refrigeration (TR). As per the scientific formula 1 Ton of Refrigeration (TR) power which is equal to 3.51 Kilo Watts of Power / electricity. 1.1 From perusal of the above it could be seen that 80IA is available in respect of profit from the business of generation of \"power\". Thus, the TR which also in the form of power is eligible for the section 801A deduction. The word power in Income-tax Act implies source of energy. 1.2 Power has been defined to mean \"mechanical or electrical energy or any form of energy or force available for application to work (as that of gravitation, running water, wind, steam, electricity).\" It is also held that terms 'Power' and 'Energy' are synonymous and mechanical, electrical, wind. 1.3 Reliance is placed on the decision of Apex Court in the case of CIT-vs.- Tanfac Industries Ltd (SLP No. 18537 of 2009) (copy of ITA No. 2911/MUM/2025 of the Act in respect of profits and gains derived by an ngs engaged in generation of various power. It is not in dispute that the assessee, in response to notice under section 142(1), furnished certain replies and documents asserting its eligibility for deduction under section 80IA of the Act on account of generation of “cooling power” from the cooling t However, there is a dispute between parties regarding in response to notice u/s 142(1) of the Act dated he assessee has claimed that following reply was filed before the Assessing Officer: Annexure 8(ii) bmission on claiming 801A deduction on Power generated from Cooling Tower Anuh Pharma Limited (Company) is manufactures of bulk drugs. The Company has in Tarapur. Company has installed Cooling Tower at plant which generates cooling power. Further, Cooling Power or Refrigeration Power is measured in Tonnes of Refrigeration (TR). As per the scientific formula 1 Ton of Refrigeration (TR) power which is equal to 3.51 Kilo Watts of Power / electricity. From perusal of the above it could be seen that deduction u/s 80IA is available in respect of profit from the business of generation of \"power\". Thus, the TR which also in the form of power is eligible for the section 801A deduction. The word power tax Act implies source of energy. as been defined to mean \"mechanical or electrical energy or any form of energy or force available for application to work (as that of gravitation, running water, wind, steam, electricity).\" It is also held that terms 'Power' and 'Energy' are synonymous and they can be in several forms, steam, mechanical, electrical, wind. Reliance is placed on the decision of Apex Court in the case of Tanfac Industries Ltd (SLP No. 18537 of 2009) (copy of Anuh Pharma Ltd 11 ITA No. 2911/MUM/2025 of the Act in respect of profits and gains derived by an power.” It is not in dispute that the assessee, in response to notice under section 142(1), furnished certain replies and documents asserting its eligibility for deduction under section 80IA of the Act on account of generation of “cooling power” from the cooling tower. regarding submitting or 1) of the Act dated he assessee has claimed that following reply was filed bmission on claiming 801A deduction on Power Anuh Pharma Limited (Company) is manufactures of bulk drugs. The Company has in Tarapur. Company has installed Cooling Tower at plant which generates cooling power. Further, Cooling Power or Refrigeration Power is measured in Tonnes of Refrigeration (TR). As per the scientific formula 1 Ton of Refrigeration (TR) power which is equal to 3.51 Kilo Watts of deduction u/s 80IA is available in respect of profit from the business of generation of \"power\". Thus, the TR which also in the form of power is eligible for the section 801A deduction. The word power as been defined to mean \"mechanical or electrical energy or any form of energy or force available for application to work (as that of gravitation, running water, wind, steam, electricity).\" It is also held that terms 'Power' and 'Energy' are they can be in several forms, steam, Reliance is placed on the decision of Apex Court in the case of Tanfac Industries Ltd (SLP No. 18537 of 2009) (copy of Printed from counselvise.com the decision is attached as Exhibit steam is also form of power and assessee is entitled to deduction u/s 80-IA on the same. The rationale of eligibility of section 80IA deduction on steam and cooling power is similar and Courts are taking consistent views on the same. 1.4 Reference is invited on Hon'ble Jurisdictional Tribunal in the case of Saf Yeast Company Private Limited v. DCIT (ITA No. 1635/Mum/2015, Date of order 24 Apex Court decision in the case of Tanfac Industries (supra) Tribunal also in the definition of Power and eligible for 80IA deduction. Following were the important aspects highlighted by Tribunal in allowing deduction: i. Tribunal referred to the CIT (A) observations that the te 'Power' has not been defined to mean electrical power to the exclusion of other forms of power and the term has to be understood in its natural meaning. Tribunal further stated that legislature has clearly provided benefit of deduction u/s 80 the Act for generation of any form of power generated by an undertaking. ii. Just like steam, cooling power/Refrigeration power is also a form of power. The power generated by the Cooling Tower is known as Refrigeration Power or Cooling Power. Cooling or Refrigeration Power, as the name suggests, is used in reducing the temperature of an object, whether solid, liquid or gaseous. iii. The temperature of the water is reduced by passing air through the apparatus, i.e. the 'Cooling Tower' in sufficient volumes, at a temperature cooler than that of the incoming hot water such that the particles of water are enveloped by the air and there is a transfer of heat from the water to the air. The air then exits the chamber at a temperature higher than its temperature at the apparatus at a temperature lower than its original temperature. In other words, air acts as the refrigerant to cool the temperature of water. Cooling Power or Refrigeration Power is measured in Tonnes of Refrigeratio relationship with the TR. iv. It was also held that one Ton of Refrigeration (TR) which is equal to 3.51 Kilo Watts of Power. 1.5 In view of the above, the power generated in form of TR from the cooling tower shall ITA No. 2911/MUM/2025 the decision is attached as Exhibit - A) wherein it was steam is also form of power and assessee is entitled to deduction IA on the same. The rationale of eligibility of section 80IA deduction on steam and cooling power is similar and Courts are taking consistent views on the same. Reference is invited on Hon'ble Jurisdictional Tribunal in the case of Saf Yeast Company Private Limited v. DCIT (ITA No. 1635/Mum/2015, Date of order 24-11-2017) wherein relying on Apex Court decision in the case of Tanfac Industries (supra) held that, power generating by Cooling Tower falls in the definition of Power and eligible for 80IA deduction. Following were the important aspects highlighted by Tribunal in allowing deduction: i. Tribunal referred to the CIT (A) observations that the te 'Power' has not been defined to mean electrical power to the exclusion of other forms of power and the term has to be understood in its natural meaning. Tribunal further stated that legislature has clearly provided benefit of deduction u/s 80 Act for generation of any form of power generated by an ii. Just like steam, cooling power/Refrigeration power is also a form of power. The power generated by the Cooling Tower is known as Refrigeration Power or Cooling Power. Cooling or geration Power, as the name suggests, is used in reducing the temperature of an object, whether solid, liquid or gaseous. iii. The temperature of the water is reduced by passing air through the apparatus, i.e. the 'Cooling Tower' in sufficient a temperature cooler than that of the incoming hot water such that the particles of water are enveloped by the air and there is a transfer of heat from the water to the air. The air then exits the chamber at a temperature higher than its temperature at the point of entry and the water exits the apparatus at a temperature lower than its original temperature. In other words, air acts as the refrigerant to cool the temperature of water. Cooling Power or Refrigeration Power is measured in Tonnes of Refrigeration (TR). Further, electricity has direct relationship with the TR. iv. It was also held that one Ton of Refrigeration (TR) which is equal to 3.51 Kilo Watts of Power. 1.5 In view of the above, the power generated in form of TR from the cooling tower shall be eligible for 80IA deduction. Anuh Pharma Ltd 12 ITA No. 2911/MUM/2025 A) wherein it was held that steam is also form of power and assessee is entitled to deduction IA on the same. The rationale of eligibility of section 80IA deduction on steam and cooling power is similar and Courts are Reference is invited on Hon'ble Jurisdictional Tribunal in the case of Saf Yeast Company Private Limited v. DCIT (ITA No. 2017) wherein relying on Apex Court decision in the case of Tanfac Industries (supra) held that, power generating by Cooling Tower falls in the definition of Power and eligible for 80IA deduction. Following were the important aspects highlighted by Tribunal in i. Tribunal referred to the CIT (A) observations that the term 'Power' has not been defined to mean electrical power to the exclusion of other forms of power and the term has to be understood in its natural meaning. Tribunal further stated that legislature has clearly provided benefit of deduction u/s 80-IA of Act for generation of any form of power generated by an ii. Just like steam, cooling power/Refrigeration power is also a form of power. The power generated by the Cooling Tower is known as Refrigeration Power or Cooling Power. Cooling or geration Power, as the name suggests, is used in reducing the temperature of an object, whether solid, liquid or gaseous. iii. The temperature of the water is reduced by passing air through the apparatus, i.e. the 'Cooling Tower' in sufficient a temperature cooler than that of the incoming hot water such that the particles of water are enveloped by the air and there is a transfer of heat from the water to the air. The air then exits the chamber at a temperature higher than its point of entry and the water exits the apparatus at a temperature lower than its original temperature. In other words, air acts as the refrigerant to cool the temperature of water. Cooling Power or Refrigeration Power is measured in n (TR). Further, electricity has direct iv. It was also held that one Ton of Refrigeration (TR) which is 1.5 In view of the above, the power generated in form of TR from Printed from counselvise.com 1.6 Since 1 TR = 3.51 Kilo Watts of Power. Thus, total TR generated shall be converted into KWH and applying the rate of electricity, market value of TR generated is arrived. The said rationale has been allowed by courts. On proposition, the company has maintained seperate records of the undertaking based on which it has also obtained government recognised energy auditor report. 1.7 Based on above, the assessee request your goodself to grant deduction u/s 80IA derived by an undertakings engaged in generation of various power. 6.3 But the Assessing Officer did not make any reference of sai reply in his assessment order. record any evidence of acknowledgement showing that the above reply relied upon was electronically filed before the faceless assessment unit. observation, it is well settled that the mere filing of written submissions by the assessee does not Assessing Officer carried out the inquiry mandated by law ought to have been the case. 6.4 The section 80IA percent deduction of profit and gains derived by an undertaking engaged in business referred in sub sub section (4) provides a list of business subsection refers to business of development, maintenance of infrastructure facility. The clause (ii) of the subsection refers to business of ITA No. 2911/MUM/2025 1.6 Since 1 TR = 3.51 Kilo Watts of Power. Thus, total TR generated shall be converted into KWH and applying the rate of electricity, market value of TR generated is arrived. The said rationale has been allowed by courts. On the above legal proposition, the company has maintained seperate records of the undertaking based on which it has also obtained government recognised energy auditor report. 1.7 Based on above, the assessee request your goodself to grant deduction u/s 80IA of the Act in respect of profits and gains derived by an undertakings engaged in generation power.” But the Assessing Officer did not make any reference of sai reply in his assessment order. The assessee also cou record any evidence of acknowledgement showing that the above reply relied upon was electronically filed before the faceless Further, without prejudice to the above it is well settled that the mere filing of written submissions by the assessee does not ipso facto establish that the Assessing Officer carried out the inquiry mandated by law ought to have been carried out in the facts and circumstances of The section 80IA(1) of the Act prescribe eligibility of hundred percent deduction of profit and gains derived by an undertaking in business referred in sub- section (4) of the section. The sub section (4) provides a list of businesses. The clause (i) of the subsection refers to business of development, maintenance of infrastructure facility. The clause (ii) of the subsection refers to business of providing telecommunication Anuh Pharma Ltd 13 ITA No. 2911/MUM/2025 1.6 Since 1 TR = 3.51 Kilo Watts of Power. Thus, total TR generated shall be converted into KWH and applying the rate of electricity, market value of TR generated is arrived. The said the above legal proposition, the company has maintained seperate records of the undertaking based on which it has also obtained government 1.7 Based on above, the assessee request your goodself to grant of the Act in respect of profits and gains derived by an undertakings engaged in generation But the Assessing Officer did not make any reference of said The assessee also could not place on record any evidence of acknowledgement showing that the above reply relied upon was electronically filed before the faceless Further, without prejudice to the above it is well settled that the mere filing of written establish that the Assessing Officer carried out the inquiry mandated by law, which in the facts and circumstances of (1) of the Act prescribe eligibility of hundred percent deduction of profit and gains derived by an undertaking section (4) of the section. The . The clause (i) of the subsection refers to business of development, operation, maintenance of infrastructure facility. The clause (ii) of the telecommunication Printed from counselvise.com services. The clause (iii) refers to development, o maintenance of Industrial Park, Special Economic zone. The clause (iv) refers to generation, transmission, distribution etc of power. This is the clause which has been invoked by the assessee for claim of deduction u/s 80IA of the Act. Therefore understanding, we feel it appropriate to reproduced as under: (iv) an 85[undertaking] which, (a) is set up in any part of India for the generation or generation and distribution of power if it begins during the period beginning on the 1st day of April, 1993 and ending on the 31st day of March, (b) starts transmission or distribution by laying a network of new transmission or beginning on the 1st day of April, 1999 and ending on the 31st day of March, Provided 87[undertaking] under sub relation to the profits derived from laying of such network of new lines for transmission or distribution; 88[(c) undertake existing network of transmission or distribution lines at any time during the period beginning on the 1st day of April, 2004 and ending on the 31st day of March, Explanation. renovation and modernisation” means an increase in the plant and machinery in the network of transmission or distribution lines by at least fifty per machinery as on the 1st day of April, 2004;] 6.5 On a plain reading of business of generation or distribution of “power” in the conventional sense of electricity, which can be through a network. ITA No. 2911/MUM/2025 services. The clause (iii) refers to development, o of Industrial Park, Special Economic zone. The clause (iv) refers to generation, transmission, distribution etc of power. This is the clause which has been invoked by the assessee for claim of deduction u/s 80IA of the Act. Therefore understanding, we feel it appropriate to reproduced as under: [undertaking] which,- is set up in any part of India for the generation or generation and distribution of power if it begins to generate power at any time during the period beginning on the 1st day of April, 1993 and ending on the 31st day of March,86[2017]; starts transmission or distribution by laying a network of new transmission or distribution lines at any time during the period beginning on the 1st day of April, 1999 and ending on the 31st day of March,86[2017]: Provided that the deduction under this section to an [undertaking] under sub-clause (b) shall be allowed only in relation to the profits derived from laying of such network of new lines for transmission or distribution; undertakes 89 substantial renovation and modernisation of the existing network of transmission or distribution lines at any time during the period beginning on the 1st day of April, 2004 and ending on the 31st day of March, 90[2017]. Explanation.-For the purposes of this sub-clause, “substantial renovation and modernisation” means an increase in the plant and machinery in the network of transmission or distribution lines by at least fifty per cent of the book value of such plant and machinery as on the 1st day of April, 2004;] n a plain reading of entire clause together business of generation or distribution of “power” in the conventional sense of electricity, which can be transmitted and distributed In the case, the assessee does not fall under Anuh Pharma Ltd 14 ITA No. 2911/MUM/2025 services. The clause (iii) refers to development, operation , of Industrial Park, Special Economic zone. The clause (iv) refers to generation, transmission, distribution etc of power. This is the clause which has been invoked by the assessee for claim of deduction u/s 80IA of the Act. Therefore, for better understanding, we feel it appropriate to reproduced as under: is set up in any part of India for the generation or generation and to generate power at any time during the period beginning on the 1st day of April, 1993 and starts transmission or distribution by laying a network of new distribution lines at any time during the period beginning on the 1st day of April, 1999 and ending on the 31st that the deduction under this section to an clause (b) shall be allowed only in relation to the profits derived from laying of such network of new substantial renovation and modernisation of the existing network of transmission or distribution lines at any time during the period beginning on the 1st day of April, 2004 and clause, “substantial renovation and modernisation” means an increase in the plant and machinery in the network of transmission or distribution cent of the book value of such plant and clause together, it refers to business of generation or distribution of “power” in the conventional transmitted and distributed In the case, the assessee does not fall under Printed from counselvise.com the plain and simple definition of the power generation the assessee is claiming generation o cooling tower as equivalent to deduction. The claim of the assessee th in ‘tonnes’ of refrigeration is synonymous with power generation in terms of section 80IA, raised a substantial issue which required a detailed and pointed inqu have also examined that claim of assessee as refrigeration cooling tower as separate undertaking having GST number etc. scenario, it was the obligatory carry out the inquiries of power as he is not merely adjudicator but also investigator could have issued commission invoking authority under section 131 of the Act to any scientific organisation like IIT, Bombay etc an referred the matter whether any power is generated in the refrigeration process employed by the assessee. conduct such inquiry renders the order of assessment vulnerable to revision under Explanation 2(a) to section 263 of the Act accordingly, under the provisions of clause (a) of Explanation 2 to section 263 of the Act, the assessment order is deemed to be erroneous in so far as prejudicial to the interest of the Revenue to the extent of the issue of deduction claimed u/s 80IA in cooling tower. We, therefore, uphold the finding of the learned PCIT that the assessment order was ITA No. 2911/MUM/2025 the plain and simple definition of the power generation assessee is claiming generation of the cooling by way of the ing tower as equivalent to power generation and claiming The claim of the assessee that cooling power measured of refrigeration is synonymous with power generation in terms of section 80IA, raised a substantial issue which required a detailed and pointed inquiry by the Assessing Officer. have also examined that claim of assessee as refrigeration cooling tower as separate undertaking having GST number etc. obligatory on the part of the Assessing Officer to inquiries to satisfy condition of business of generation as he is not merely adjudicator but also investigator could have issued commission invoking authority under section 131 of the Act to any scientific organisation like IIT, Bombay etc an referred the matter whether any power is generated in the refrigeration process employed by the assessee. conduct such inquiry renders the order of assessment vulnerable to revision under Explanation 2(a) to section 263 of the Act under the provisions of clause (a) of Explanation 2 to section 263 of the Act, the assessment order is deemed to be erroneous in so far as prejudicial to the interest of the Revenue to the extent of the issue of deduction claimed u/s 80IA in We, therefore, uphold the finding of the learned PCIT that the assessment order was deemed to erroneous in so far as Anuh Pharma Ltd 15 ITA No. 2911/MUM/2025 the plain and simple definition of the power generation. Instead, f the cooling by way of the power generation and claiming at cooling power measured of refrigeration is synonymous with power generation in terms of section 80IA, raised a substantial issue which required a iry by the Assessing Officer. He should have also examined that claim of assessee as refrigeration cooling tower as separate undertaking having GST number etc. In such a on the part of the Assessing Officer to to satisfy condition of business of generation as he is not merely adjudicator but also investigator. He could have issued commission invoking authority under section 131 of the Act to any scientific organisation like IIT, Bombay etc and referred the matter whether any power is generated in the refrigeration process employed by the assessee. The failure to conduct such inquiry renders the order of assessment vulnerable to revision under Explanation 2(a) to section 263 of the Act Thus, under the provisions of clause (a) of Explanation 2 to section 263 of the Act, the assessment order is deemed to be erroneous in so far as prejudicial to the interest of the Revenue to the extent of the issue of deduction claimed u/s 80IA in respect of We, therefore, uphold the finding of the learned PCIT erroneous in so far as Printed from counselvise.com prejudicial to the interests of the Revenue with respect to the deduction allowed under section 80IA. 6.6 In so far as second issue of deduction u/s 80G of the Act is concerned, the Assessing officer had issued a query letter on 20.09.2022 whereas he specifically asked as why the deduction claimed u/s 80G on CSR activities in contravention of Explanation 2 to section 263 of the Act be disallowed. T detailed reply which is available on Paper Book page 56 to 61. For ready reference said reply is reproduced as under: “1.0 Claim of deduction on account of CSR activities and donations made u/s 80G of th Act): 1.1 During the captioned year, the assessee has debited Rs. 30,23,800/- towards eligible CSR & donations in Profit & Loss Account. The said amount was already disallowed the expenses for CSR and donations u/s 37(1) of the computation of income. Thereafter under separate chapter i.e. VIA as per the provisions of section 80G, the assessee has claimed deduction of Rs. 18,29,265/ trusts or organization which are eligible for 1.2 In this regard, the assessee has submitted the tax audit report and annual report certifying the said amount of deduction u/s 80G. Further, the list of eligible trust to whom CSR and donation is being made alongwith copies of the CSR and donation is made is attached as Annexure 2. 1.3 In this regard, reference is made to Section 29 of the Act which is placed in Chapter IV which is reproduce as under: Income from profits and gains of computed. 29. The income referred to in section 28 shall be computed in accordance with the provisions contained in sections 30 to 43D. ITA No. 2911/MUM/2025 prejudicial to the interests of the Revenue with respect to the deduction allowed under section 80IA. far as second issue of deduction u/s 80G of the Act is the Assessing officer had issued a query letter on 20.09.2022 whereas he specifically asked as why the deduction claimed u/s 80G on CSR activities in contravention of Explanation n 263 of the Act be disallowed. The assessee filed a detailed reply which is available on Paper Book page 56 to 61. For ready reference said reply is reproduced as under: 1.0 Claim of deduction on account of CSR activities and donations made u/s 80G of the Income Tax Act, 1961 (the 1.1 During the captioned year, the assessee has debited Rs. towards eligible CSR & donations in Profit & Loss Account. The said amount was already disallowed the expenses for CSR and donations u/s 37(1) of the Act by the assessee in computation of income. Thereafter under separate chapter i.e. VIA as per the provisions of section 80G, the assessee has claimed deduction of Rs. 18,29,265/- being the payment made to the trusts or organization which are eligible for the deduction. 1.2 In this regard, the assessee has submitted the tax audit report and annual report certifying the said amount of deduction u/s 80G. Further, the list of eligible trust to whom CSR and donation is being made alongwith copies of the receipt to whom CSR and donation is made is attached as Annexure 2. 1.3 In this regard, reference is made to Section 29 of the Act which is placed in Chapter IV - Computation of Business Income which is reproduce as under: Income from profits and gains of business or profession, how 29. The income referred to in section 28 shall be computed in accordance with the provisions contained in sections 30 to 43D. Anuh Pharma Ltd 16 ITA No. 2911/MUM/2025 prejudicial to the interests of the Revenue with respect to the far as second issue of deduction u/s 80G of the Act is the Assessing officer had issued a query letter on 20.09.2022 whereas he specifically asked as why the deduction claimed u/s 80G on CSR activities in contravention of Explanation he assessee filed a detailed reply which is available on Paper Book page 56 to 61. For 1.0 Claim of deduction on account of CSR activities and e Income Tax Act, 1961 (the 1.1 During the captioned year, the assessee has debited Rs. towards eligible CSR & donations in Profit & Loss Account. The said amount was already disallowed the expenses Act by the assessee in computation of income. Thereafter under separate chapter i.e. VIA as per the provisions of section 80G, the assessee has claimed being the payment made to the the deduction. 1.2 In this regard, the assessee has submitted the tax audit report and annual report certifying the said amount of deduction u/s 80G. Further, the list of eligible trust to whom CSR and receipt to whom 1.3 In this regard, reference is made to Section 29 of the Act Computation of Business Income business or profession, how 29. The income referred to in section 28 shall be computed in accordance with the provisions contained in sections 30 to 43D. Printed from counselvise.com 1.4 Thus, the income under the head Income from business and profession has to be computed a 43D of the Act. Further, reference has to be drawn on section 37(1) of the Act which has been amended vide Finance Act (No. 2) 2014 w.e.f AY General. 37. (1) Any expenditure (not being expenditure of th described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively or the purposes of the business or profession shall be allowed in computing the in chargeable under the head \"Profits and gains of business or profession\". Explanation 2. that for the purposes of sub by an assessee on the activities relating to responsibility referred to in section 135 of the Companies Act, 2013 (18 of 2013) shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or profession. 1.5 Considering the above general section assessee had duly disallowed the expenses of CSR / Donation in computing the Income from business and Profession which is clearly evident from the computation of income attached above. 1.6 As per the separate chapter \"Chapter VIA made in computing total income\". Section 80A(1) which is reproduce as under: Deductions to be made in computing total income 80A. (1) In computing the total income of an assessee, there shall be allowed from his gross total income, in accord subject to the provisions of this Chapter, the deductions specified in sections 80C to 80U. 1.7 Further, section 80G of the Act which is reproduce as under: Deduction in respect of donations to certain funds, charitable institutions, etc 80G. assessee, there shall be deducted, in accordance with and subject to the provisions of this section, ITA No. 2911/MUM/2025 1.4 Thus, the income under the head Income from business and profession has to be computed after giving effect to section 30 to 43D of the Act. Further, reference has to be drawn on section 37(1) of the Act which has been amended vide Finance Act (No. 2) 2014 w.e.f AY 2015-16 as under: 37. (1) Any expenditure (not being expenditure of th described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively or the purposes of the business or profession shall be allowed in computing the in chargeable under the head \"Profits and gains of business or Explanation 2. - For the removal of doubts, it is hereby declared that for the purposes of sub- section (1), any expenditure incurred by an assessee on the activities relating to corporate social responsibility referred to in section 135 of the Companies Act, 2013 (18 of 2013) shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or 1.5 Considering the above general section 37(1) of the Act, the assessee had duly disallowed the expenses of CSR / Donation in computing the Income from business and Profession which is clearly evident from the computation of income attached above. 1.6 As per the separate chapter \"Chapter VIA - Deduction to be made in computing total income\". Section 80A(1) which is reproduce as under: Deductions to be made in computing total income 80A. (1) In computing the total income of an assessee, there shall be allowed from his gross total income, in accordance with and subject to the provisions of this Chapter, the deductions specified in sections 80C to 80U. 1.7 Further, section 80G of the Act which is reproduce as under: Deduction in respect of donations to certain funds, charitable institutions, etc 80G. (1) In computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section, - Anuh Pharma Ltd 17 ITA No. 2911/MUM/2025 1.4 Thus, the income under the head Income from business and fter giving effect to section 30 to 43D of the Act. Further, reference has to be drawn on section 37(1) of the Act which has been amended vide Finance Act (No. 2) 37. (1) Any expenditure (not being expenditure of the nature described in sections 30 to 36 and not being in the nature of capital expenditure or personal expenses of the assessee), laid out or expended wholly and exclusively or the purposes of the business or profession shall be allowed in computing the income chargeable under the head \"Profits and gains of business or For the removal of doubts, it is hereby declared section (1), any expenditure incurred corporate social responsibility referred to in section 135 of the Companies Act, 2013 (18 of 2013) shall not be deemed to be an expenditure incurred by the assessee for the purposes of the business or 37(1) of the Act, the assessee had duly disallowed the expenses of CSR / Donation in computing the Income from business and Profession which is clearly evident from the computation of income attached above. duction to be made in computing total income\". Section 80A(1) which is Deductions to be made in computing total income 80A. (1) In computing the total income of an assessee, there shall ance with and subject to the provisions of this Chapter, the deductions specified 1.7 Further, section 80G of the Act which is reproduce as under: Deduction in respect of donations to certain funds, charitable (1) In computing the total income of an assessee, there shall be deducted, in accordance with and Printed from counselvise.com 1.8 Thus, on reading of section 80A(1) and 80G(1) of the Act which state that, in computing the total income ded allowed to the assessee as per the specified section 80C to 80U of the Act. 1.9 On perusing the section 80G of the Act which nowhere state that, payment which are classified as CSR or donation shall not be allowed even after the amendment i Act, there is no change in the section 80G of the Act. Further, in section 80G of the Act there is no such restriction of CSR expenses. 1.10 Section 37(1) of the Act falls in Chapter IV Business Income, whereas S VIA - Deduction to be made in computing total income. Both sections are placed in different chapter for specific purpose and thus cannot be imported to other chapter. 1.11 Section 37(1) of the Act states, expenses wil in computation of business income. Whereas section 80G of the Act state of deduction from the gross total income (i.e. aggregate of all five head of income). Thus, the meaning of \"expenses\" and \"deduction\" are different. Expenses are allow business income. While deduction is to be allowed from the gross total income irrespective of whether the payment is made for the business purpose or not. 1.12 Further, section 37(1) of the Act being general in nature and will not override the allowing the deduction on the payment made to charitable trust or organization. 1.13 In this regard, it is pertinent to note the ratio laid down by the Hon'ble Rajasthan High Court in the case of Jaswant Trading Co -vs.- CIT [1996] 85 Taxman 639 (RAJ.) wherein the firm made payment to various trusts and CM relief fund and claimed as business expenses u/s 37(1) @ 100%. Revenue contested that, such payment are covered by deduction u/s 80G @ 50% instead of claiming it a held payment made to trust / funds which are eligible for deduction are clearly covered u/s 80G and 50% deduction has to be allowed as the same doesn't falls within section 37(1) of the Act. Relevant part of 7. Besides the above, the provisions of section 37 are general in nature and the provisions of section 80G are specific. Applying the maxim generalia specialibus non derogant if an amount is ITA No. 2911/MUM/2025 1.8 Thus, on reading of section 80A(1) and 80G(1) of the Act which state that, in computing the total income deduction shall be allowed to the assessee as per the specified section 80C to 80U 1.9 On perusing the section 80G of the Act which nowhere state that, payment which are classified as CSR or donation shall not be allowed even after the amendment in the section 37(1) of the Act, there is no change in the section 80G of the Act. Further, in section 80G of the Act there is no such restriction of CSR 1.10 Section 37(1) of the Act falls in Chapter IV - Computation of Business Income, whereas Section 80G of the Act falls in Chapter Deduction to be made in computing total income. Both sections are placed in different chapter for specific purpose and thus cannot be imported to other chapter. 1.11 Section 37(1) of the Act states, expenses will not be allowed in computation of business income. Whereas section 80G of the Act state of deduction from the gross total income (i.e. aggregate of all five head of income). Thus, the meaning of \"expenses\" and \"deduction\" are different. Expenses are allowed from the business income. While deduction is to be allowed from the gross total income irrespective of whether the payment is made for the business purpose or not. 1.12 Further, section 37(1) of the Act being general in nature and will not override the specific section of 80G of the Act while allowing the deduction on the payment made to charitable trust or organization. 1.13 In this regard, it is pertinent to note the ratio laid down by the Hon'ble Rajasthan High Court in the case of Jaswant Trading CIT [1996] 85 Taxman 639 (RAJ.) wherein the firm made payment to various trusts and CM relief fund and claimed as business expenses u/s 37(1) @ 100%. Revenue contested that, such payment are covered by deduction u/s 80G @ 50% instead of claiming it as business expenses. In this regard, High Court held payment made to trust / funds which are eligible for deduction are clearly covered u/s 80G and 50% deduction has to be allowed as the same doesn't falls within section 37(1) of the Act. Relevant part of the order is reproduced as under: 7. Besides the above, the provisions of section 37 are general in nature and the provisions of section 80G are specific. Applying the maxim generalia specialibus non derogant if an amount is Anuh Pharma Ltd 18 ITA No. 2911/MUM/2025 1.8 Thus, on reading of section 80A(1) and 80G(1) of the Act uction shall be allowed to the assessee as per the specified section 80C to 80U 1.9 On perusing the section 80G of the Act which nowhere state that, payment which are classified as CSR or donation shall not n the section 37(1) of the Act, there is no change in the section 80G of the Act. Further, in section 80G of the Act there is no such restriction of CSR Computation of ection 80G of the Act falls in Chapter Deduction to be made in computing total income. Both sections are placed in different chapter for specific purpose and l not be allowed in computation of business income. Whereas section 80G of the Act state of deduction from the gross total income (i.e. aggregate of all five head of income). Thus, the meaning of \"expenses\" and ed from the business income. While deduction is to be allowed from the gross total income irrespective of whether the payment is made for the 1.12 Further, section 37(1) of the Act being general in nature and specific section of 80G of the Act while allowing the deduction on the payment made to charitable trust 1.13 In this regard, it is pertinent to note the ratio laid down by the Hon'ble Rajasthan High Court in the case of Jaswant Trading CIT [1996] 85 Taxman 639 (RAJ.) wherein the firm made payment to various trusts and CM relief fund and claimed as business expenses u/s 37(1) @ 100%. Revenue contested that, such payment are covered by deduction u/s 80G @ 50% instead s business expenses. In this regard, High Court held payment made to trust / funds which are eligible for deduction are clearly covered u/s 80G and 50% deduction has to be allowed as the same doesn't falls within section 37(1) of the the order is reproduced as under: 7. Besides the above, the provisions of section 37 are general in nature and the provisions of section 80G are specific. Applying the maxim generalia specialibus non derogant if an amount is Printed from counselvise.com liable for deduction under sect the general provisions of section 37(1). Section 80G provides that in computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section, an amount equal t sums specified in sub expenditure falls within the category of donation, then the deduction as provided under section 80G alone is applicable. 1.14 The assessee would also like decision of Hon'ble Bangalore Tribunal in the case of First American (India) Pvt. Ltd. v. ACIT (ITA No. 1762/Bang/2019, dated 29- 04- wherein AO was of opinion that claim made und was not allowable as amount was forming part of CSR expenses debited to P & L A/c. However, Tribunal has allowed the claim of the assessee by stating that, CSR expenditure is to be disallowed by new Explanation 2 to section 37(1), while com under Head 'Income from Business and Profession'. Expenditure incurred under section 30 to 36 are claimed while computing income under head, 'Income from Business and Profession\", where as monies spent under section 80G are claimed while computing \"Total Taxable income\" in hands of assessee. Point of claim under these provisions are different. Further, intention of legislature is very clear and unambiguous, since expenditure incurred under section 30 to 36 are excluded from Explanation 2 to section 37(1) they are specifically excluded in clarification issued. There is no restriction on an expenditure being claimed under above sections to be exempt, as long as it satisfies necessary conditions under section 30 to 36 for computing income under he claiming benefit under section 80G, deductions are considered at stage of computing \"Total taxable income'. Even if any payments under section 80G forms part of CSR payments, same would already stand excluded w \"Income from Business and Profession\". Effect of such disallowance would lead to increase in Business income. Thereafter benefit accruing to assessee under Chapter VIA for computing \"Total Taxable Income\" cannot be denied subject to fulfillment of necessary conditions therein. 1.15 The assessee further would like to place reliance on the recent decision of Hon'ble Kolkata Tribunal in case of JMS Mining (P.) Ltd v. PCIT (ITA No 146/Kol/2021, dated 22 of the decision enclosed as Annexure 4) wherein after having detailed discussion it has been held that, section 37(1) which denies deduction for CSR expenses by way of business ITA No. 2911/MUM/2025 liable for deduction under section 80G it cannot be claimed under the general provisions of section 37(1). Section 80G provides that in computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this section, an amount equal to fifty per cent of the aggregate of the sums specified in sub-section (2). If a particular amount of expenditure falls within the category of donation, then the deduction as provided under section 80G alone is applicable. 1.14 The assessee would also like to place reliance on the decision of Hon'ble Bangalore Tribunal in the case of First American (India) Pvt. Ltd. v. ACIT (ITA No. 1762/Bang/2019, -2020) (copy of the decision enclosed as Annexure 3) wherein AO was of opinion that claim made under section 80 G was not allowable as amount was forming part of CSR expenses debited to P & L A/c. However, Tribunal has allowed the claim of the assessee by stating that, CSR expenditure is to be disallowed by new Explanation 2 to section 37(1), while computing Income under Head 'Income from Business and Profession'. Expenditure incurred under section 30 to 36 are claimed while computing income under head, 'Income from Business and Profession\", where as monies spent under section 80G are claimed while uting \"Total Taxable income\" in hands of assessee. Point of claim under these provisions are different. Further, intention of legislature is very clear and unambiguous, since expenditure incurred under section 30 to 36 are excluded from Explanation 2 ction 37(1) they are specifically excluded in clarification issued. There is no restriction on an expenditure being claimed under above sections to be exempt, as long as it satisfies necessary conditions under section 30 to 36 for computing income under head, \"Income from Business and Profession\" For claiming benefit under section 80G, deductions are considered at stage of computing \"Total taxable income'. Even if any payments under section 80G forms part of CSR payments, same would already stand excluded while computing, Income under head, \"Income from Business and Profession\". Effect of such disallowance would lead to increase in Business income. Thereafter benefit accruing to assessee under Chapter VIA for computing \"Total Taxable Income\" cannot be denied to assessee, subject to fulfillment of necessary conditions therein. 1.15 The assessee further would like to place reliance on the recent decision of Hon'ble Kolkata Tribunal in case of JMS Mining (P.) Ltd v. PCIT (ITA No 146/Kol/2021, dated 22-07-2021) ( of the decision enclosed as Annexure 4) wherein after having detailed discussion it has been held that, section 37(1) which denies deduction for CSR expenses by way of business Anuh Pharma Ltd 19 ITA No. 2911/MUM/2025 ion 80G it cannot be claimed under the general provisions of section 37(1). Section 80G provides that in computing the total income of an assessee, there shall be deducted, in accordance with and subject to the provisions of this o fifty per cent of the aggregate of the section (2). If a particular amount of expenditure falls within the category of donation, then the deduction as provided under section 80G alone is applicable. to place reliance on the decision of Hon'ble Bangalore Tribunal in the case of First American (India) Pvt. Ltd. v. ACIT (ITA No. 1762/Bang/2019, 2020) (copy of the decision enclosed as Annexure 3) er section 80 G was not allowable as amount was forming part of CSR expenses debited to P & L A/c. However, Tribunal has allowed the claim of the assessee by stating that, CSR expenditure is to be disallowed puting Income under Head 'Income from Business and Profession'. Expenditure incurred under section 30 to 36 are claimed while computing income under head, 'Income from Business and Profession\", where as monies spent under section 80G are claimed while uting \"Total Taxable income\" in hands of assessee. Point of claim under these provisions are different. Further, intention of legislature is very clear and unambiguous, since expenditure incurred under section 30 to 36 are excluded from Explanation 2 ction 37(1) they are specifically excluded in clarification issued. There is no restriction on an expenditure being claimed under above sections to be exempt, as long as it satisfies necessary conditions under section 30 to 36 for computing ad, \"Income from Business and Profession\" For claiming benefit under section 80G, deductions are considered at stage of computing \"Total taxable income'. Even if any payments under section 80G forms part of CSR payments, same would hile computing, Income under head, \"Income from Business and Profession\". Effect of such disallowance would lead to increase in Business income. Thereafter benefit accruing to assessee under Chapter VIA for to assessee, 1.15 The assessee further would like to place reliance on the recent decision of Hon'ble Kolkata Tribunal in case of JMS Mining 2021) (copy of the decision enclosed as Annexure 4) wherein after having detailed discussion it has been held that, section 37(1) which denies deduction for CSR expenses by way of business Printed from counselvise.com expenditure is applicable only to extent of computing 'business income' under Chapter IV imported to CSR contributions which was otherwise eligible for deduction under Chapter VI donation made by assessee company on account of corporate social responsibility to two funds/trusts which were duly r was to be allowed as deduction under section 80G. 1.16 Reliance is also placed on the recent decision of Hon'ble Bangalore Tribunal in case of Sling Media Pvt. Ltd. Vs DCIT (ITA. No. 197/Bang/2020, dated 30.11.2021) (copy enclosed as Annexure 5) wherein it was held that assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing 'Total Taxable Income\". If assessee is denied this benefit, merely because such payment f CSR, would lead to double disallowance, which is not the intention of Legislature'. 1.17 Further, to the above decisions, the assessee relies on the following decisions wherein on consistent basis it has been held that, the CSR expenditure wh computing the Income from business and profession are allowed as deduction u/s 80G of the Act of Chapter VIA: i. Goldman Sachs v Jt. CIT [(2020) 117 taxmann.com 535 (ITAT Banglore)] ii. National Seeds Corpn. Ltd. v. Addl. CI 6794/Delhi/2014, dated 04.04.2018) iii. Allegis Services (India) (P.) Ltd. v. Asstt. CIT (ITA No. 1693/Bang/2019, dated 29.04.2020) iv. FNF India (P.) Ltd. v. Asstt. CIT (ITA No. 1565/Bang/2019, dated 05.01.2021) 1.18 Considering the above, the disallowed the CSR / donation expenses u/s 37(1) of the Act in computing the business income and claimed deduction u/s 80G of the Act which falls under different Chapter VIA wherein there is no such restriction. 6.7 On perusal of the above notice issued by the AO and the reply by the assessee, we find that the Assessing Officer specifically issued a show cause notice dated 20.09.2022 questioning the ITA No. 2911/MUM/2025 expenditure is applicable only to extent of computing 'business der Chapter IV-D and it could not be extended or imported to CSR contributions which was otherwise eligible for deduction under Chapter VI donation made by assessee company on account of corporate social responsibility to two funds/trusts which were duly registered under section 80G(5)(vi) was to be allowed as deduction under section 80G. 1.16 Reliance is also placed on the recent decision of Hon'ble Bangalore Tribunal in case of Sling Media Pvt. Ltd. Vs DCIT (ITA. No. 197/Bang/2020, dated 30.11.2021) (copy of the decision enclosed as Annexure 5) wherein it was held that assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing 'Total Taxable Income\". If assessee is denied this benefit, merely because such payment forms part of CSR, would lead to double disallowance, which is not the intention of Legislature'. 1.17 Further, to the above decisions, the assessee relies on the following decisions wherein on consistent basis it has been held that, the CSR expenditure which are disallowed u/s 37(1) in computing the Income from business and profession are allowed as deduction u/s 80G of the Act of Chapter VIA: i. Goldman Sachs v Jt. CIT [(2020) 117 taxmann.com 535 (ITAT ii. National Seeds Corpn. Ltd. v. Addl. CIT (ITA No. 6794/Delhi/2014, dated 04.04.2018) iii. Allegis Services (India) (P.) Ltd. v. Asstt. CIT (ITA No. 1693/Bang/2019, dated 29.04.2020) iv. FNF India (P.) Ltd. v. Asstt. CIT (ITA No. 1565/Bang/2019, dated 05.01.2021) 1.18 Considering the above, the assessee has correctly disallowed the CSR / donation expenses u/s 37(1) of the Act in computing the business income and claimed deduction u/s 80G of the Act which falls under different Chapter VIA wherein there restriction.” the above notice issued by the AO and the reply we find that the Assessing Officer specifically issued a show cause notice dated 20.09.2022 questioning the Anuh Pharma Ltd 20 ITA No. 2911/MUM/2025 expenditure is applicable only to extent of computing 'business D and it could not be extended or imported to CSR contributions which was otherwise eligible for deduction under Chapter VI donation made by assessee company on account of corporate social responsibility to two egistered under section 80G(5)(vi) 1.16 Reliance is also placed on the recent decision of Hon'ble Bangalore Tribunal in case of Sling Media Pvt. Ltd. Vs DCIT (ITA. of the decision enclosed as Annexure 5) wherein it was held that assessee cannot be denied the benefit of claim under Chapter VI A, which is considered for computing 'Total Taxable Income\". If assessee is orms part of CSR, would lead to double disallowance, which is not the 1.17 Further, to the above decisions, the assessee relies on the following decisions wherein on consistent basis it has been held ich are disallowed u/s 37(1) in computing the Income from business and profession are allowed i. Goldman Sachs v Jt. CIT [(2020) 117 taxmann.com 535 (ITAT T (ITA No. iii. Allegis Services (India) (P.) Ltd. v. Asstt. CIT (ITA No. iv. FNF India (P.) Ltd. v. Asstt. CIT (ITA No. 1565/Bang/2019, assessee has correctly disallowed the CSR / donation expenses u/s 37(1) of the Act in computing the business income and claimed deduction u/s 80G of the Act which falls under different Chapter VIA wherein there the above notice issued by the AO and the reply we find that the Assessing Officer specifically issued a show cause notice dated 20.09.2022 questioning the Printed from counselvise.com allowability of deduction in respect of CSR expenditure in the light of section 80G. In response, the assessee furnished a detailed submission, citing statutory provisions and judicial precedents, explaining that CSR expenditure disallowed under section 37(1) in computing business income could nevertheless qualify for deduction under Ch Assessing Officer, after considering the reply, made no disallowance. Thus, specific issue of allowability of deduction u/s 80G of the Act respect of CSR expenditure. 6.8 On perusal of the notice and the reply, it is evident that a conscious examination of the issue was indeed carried out by the Assessing Officer, who applied his mind and accepted the explanation of the assessee. Once inquiry was conducted and a view was taken, the mere fact that the Assessing Officer did not record elaborate reasons cannot justify assumption of jurisdiction under section 263. The law as declared by the Hon’ble Supreme Court in V-Con Integrate Solutions Pvt. Ltd. has no control over the manner in which the Assessing Officer pens his order; if the inquiry has been made, the presumption is that the Assessing Officer was satisfied with the explanation offered. 6.9 In view of the above discussion, we hold of jurisdiction by the learned PCIT under section 263 of the Act is justified in respect of the deduction allowed under section 80IA of ITA No. 2911/MUM/2025 allowability of deduction in respect of CSR expenditure in the light G. In response, the assessee furnished a detailed submission, citing statutory provisions and judicial precedents, explaining that CSR expenditure disallowed under section 37(1) in computing business income could nevertheless qualify for deduction under Chapter VIA, particularly section 80G. The Assessing Officer, after considering the reply, made no disallowance. Thus, the Assessing Officer has duly examined the specific issue of allowability of deduction u/s 80G of the Act respect of CSR expenditure. On perusal of the notice and the reply, it is evident that a conscious examination of the issue was indeed carried out by the Assessing Officer, who applied his mind and accepted the explanation of the assessee. Once inquiry was conducted and a view as taken, the mere fact that the Assessing Officer did not record elaborate reasons cannot justify assumption of jurisdiction under section 263. The law as declared by the Hon’ble Supreme Court in Con Integrate Solutions Pvt. Ltd. (supra) is clear that t has no control over the manner in which the Assessing Officer pens his order; if the inquiry has been made, the presumption is that the Assessing Officer was satisfied with the explanation offered. In view of the above discussion, we hold that the assumption of jurisdiction by the learned PCIT under section 263 of the Act is justified in respect of the deduction allowed under section 80IA of Anuh Pharma Ltd 21 ITA No. 2911/MUM/2025 allowability of deduction in respect of CSR expenditure in the light G. In response, the assessee furnished a detailed submission, citing statutory provisions and judicial precedents, explaining that CSR expenditure disallowed under section 37(1) in computing business income could nevertheless qualify for apter VIA, particularly section 80G. The Assessing Officer, after considering the reply, made no the Assessing Officer has duly examined the specific issue of allowability of deduction u/s 80G of the Act in On perusal of the notice and the reply, it is evident that a conscious examination of the issue was indeed carried out by the Assessing Officer, who applied his mind and accepted the explanation of the assessee. Once inquiry was conducted and a view as taken, the mere fact that the Assessing Officer did not record elaborate reasons cannot justify assumption of jurisdiction under section 263. The law as declared by the Hon’ble Supreme Court in ) is clear that the assessee has no control over the manner in which the Assessing Officer pens his order; if the inquiry has been made, the presumption is that the Assessing Officer was satisfied with the explanation offered. that the assumption of jurisdiction by the learned PCIT under section 263 of the Act is justified in respect of the deduction allowed under section 80IA of Printed from counselvise.com the Act, where no inquiry was carried out by the Assessing Officer. However, in respect of the deduc the Act, the record demonstrates that the Assessing Officer had conducted due inquiry and applied his mind to the issue. Therefore, invocation of Explanation 2(a) to section 263 is not sustainable on this aspect. 6.10 The ground No. 1 of the appeal of the assessee is accordingly partly allowed. 7. Now, we come to the ground No. 2 of the appeal of the assessee wherein the assessee has finding of the Ld. PCIT on the issue of deduction u/s 80G erroneous in law. 7.1 We have heard rival submissions of the parties and perused the relevant materials on record. assessee was not entitled to the said deduction, citing the principle that donations must be obligation. The Ld. PCIT referred to the decision of the Hon’ble Supreme Court in the case of PVG Raju, Raja Vizianagaram (1976 CSR (1) 1017] but, the ld PCIT, in his own order, acknowledged that the very issue is curr Bombay High Court, following a contrary view taken by the co ordinate Benches of this Tribunal, which had ruled in favor of the ITA No. 2911/MUM/2025 the Act, where no inquiry was carried out by the Assessing Officer. However, in respect of the deduction allowed under section 80G of the Act, the record demonstrates that the Assessing Officer had conducted due inquiry and applied his mind to the issue. Therefore, invocation of Explanation 2(a) to section 263 is not sustainable on The ground No. 1 of the appeal of the assessee is accordingly we come to the ground No. 2 of the appeal of the the assessee has specifically finding of the Ld. PCIT on the issue of deduction u/s 80G We have heard rival submissions of the parties and perused the relevant materials on record. It is the PCIT's contention that the assessee was not entitled to the said deduction, citing the principle that donations must be voluntary and not made under a legal The Ld. PCIT referred to the decision of the Hon’ble upreme Court in the case of PVG Raju, Raja Vizianagaram (1976 , the ld PCIT, in his own order, acknowledged that the very issue is currently sub-judice before the jurisdictional Bombay High Court, following a contrary view taken by the co ordinate Benches of this Tribunal, which had ruled in favor of the Anuh Pharma Ltd 22 ITA No. 2911/MUM/2025 the Act, where no inquiry was carried out by the Assessing Officer. tion allowed under section 80G of the Act, the record demonstrates that the Assessing Officer had conducted due inquiry and applied his mind to the issue. Therefore, invocation of Explanation 2(a) to section 263 is not sustainable on The ground No. 1 of the appeal of the assessee is accordingly we come to the ground No. 2 of the appeal of the specifically challenged the finding of the Ld. PCIT on the issue of deduction u/s 80G held to be We have heard rival submissions of the parties and perused It is the PCIT's contention that the assessee was not entitled to the said deduction, citing the principle voluntary and not made under a legal The Ld. PCIT referred to the decision of the Hon’ble upreme Court in the case of PVG Raju, Raja Vizianagaram (1976 , the ld PCIT, in his own order, acknowledged that judice before the jurisdictional Bombay High Court, following a contrary view taken by the co- ordinate Benches of this Tribunal, which had ruled in favor of the Printed from counselvise.com assessee in similar cases. The PCIT's order expressly states: relevant finding of the Ld. PCIT is reproduced as under: “6.5 As regards the judicial pronouncements cited by the assessee, it is stated that appeals filed by the Department before the Hon’ble Bombay High Court on this issue are pending for adjudication in the following Sr. No Name of the Assessee 1. Blue Cross Laboratories Pvt. Ltd. 2. Worley Services Industries Pvt. Ltd. Since the issue High Court, the contention of the assessee cannot be accepted. 7.2 It is therefore evident that, at the time the Assessing Officer (AO) completed the assessment, two plausible interpretations of the law existed on this matter. One view, adopted by the co Benches of this Tribunal, supported the assessee's claim, wh other, championed by the Revenue, denied it. The Hon'ble Supreme Court, in CIT v. Max India Ltd. [295 ITR 282 (SC)] definitively held that where two opinions on a point of law are available, and the Assessing Officer has adopted one of them, t Commissioner cannot invoke the revisional powers under Section 263 merely to substitute his own opinion for that of the AO. Such an assessment cannot be deemed \"erroneous\" and \"prejudicial to the interests of the Revenue. In light of this settled legal we hold that the action of the Assessing Officer in allowing the ITA No. 2911/MUM/2025 assessee in similar cases. The PCIT's order expressly states: the Ld. PCIT is reproduced as under: As regards the judicial pronouncements cited by the assessee, it is stated that appeals filed by the Department before ble Bombay High Court on this issue are pending for adjudication in the following cases:- Name of the Assessee PAN ITAT Order No. High Court Lodging No. Laboratories Pvt. Ltd. AAACB1549G 1806/M um/2023 ITXAL/30782/2024 Industries Pvt. Ltd. AAACH0456J 554/Mum/2024 ITXAL/4392/2025 Since the issue is sub-judice before the jurisdictional Bombay High Court, the contention of the assessee cannot be accepted. t is therefore evident that, at the time the Assessing Officer (AO) completed the assessment, two plausible interpretations of the law existed on this matter. One view, adopted by the co Benches of this Tribunal, supported the assessee's claim, wh other, championed by the Revenue, denied it. The Hon'ble Supreme CIT v. Max India Ltd. [295 ITR 282 (SC)] definitively held that where two opinions on a point of law are available, and the Assessing Officer has adopted one of them, t Commissioner cannot invoke the revisional powers under Section 263 merely to substitute his own opinion for that of the AO. Such an assessment cannot be deemed \"erroneous\" and \"prejudicial to the interests of the Revenue. In light of this settled legal we hold that the action of the Assessing Officer in allowing the Anuh Pharma Ltd 23 ITA No. 2911/MUM/2025 assessee in similar cases. The PCIT's order expressly states: The the Ld. PCIT is reproduced as under: As regards the judicial pronouncements cited by the assessee, it is stated that appeals filed by the Department before ble Bombay High Court on this issue are pending for High Court Lodging No. ITXAL/30782/2024 ITXAL/4392/2025 judice before the jurisdictional Bombay High Court, the contention of the assessee cannot be accepted.” t is therefore evident that, at the time the Assessing Officer (AO) completed the assessment, two plausible interpretations of the law existed on this matter. One view, adopted by the co-ordinate Benches of this Tribunal, supported the assessee's claim, while the other, championed by the Revenue, denied it. The Hon'ble Supreme CIT v. Max India Ltd. [295 ITR 282 (SC)], has definitively held that where two opinions on a point of law are available, and the Assessing Officer has adopted one of them, the Commissioner cannot invoke the revisional powers under Section 263 merely to substitute his own opinion for that of the AO. Such an assessment cannot be deemed \"erroneous\" and \"prejudicial to the interests of the Revenue. In light of this settled legal position, we hold that the action of the Assessing Officer in allowing the Printed from counselvise.com deduction under Section 80G, being based on a plausible and available interpretation of the law, was not erroneous No. 2 of the appeal of the assessee is accordingly all 8. In ground No. 3, the assessee has challenged the finding of the learned PCIT in holding that the deduction allowed under section 80IA of the Act in respect of the cooling tower was erroneous. The contention of the assessee is that there was no er deduction, as the cooling tower constituted an eligible undertaking engaged in generation of cooling power. In support of this ground, the learned counsel for the assessee drew our attention to the submissions filed before the learned P at page 19 of the paper book. For ready reference, the relevant reply is reproduced hereunder: “2.1 On plain reading of section 801A(4) (iv) of the Act, it could be seen that deduction under section 801A is available in respec profit or gains derived from the business of generation of 'power'. The word power is not defined under Income However, in the decision of Apex Court in the case of CIT Tanfac Industries Ltd (SLP No. 18537 of 2009) (copy of t decision is attached as Annexure wherein it was held that steam is also form of power and assessee is entitled to deduction u/s 80 basis. The rationale of eligibility of section 801A deduction on steam and cooling power is similar and Courts are taking consistent views on the same. 2.2 In the notice issued under Section 263, at paragraph 2, Your Honour has stated that: The assessee has installed a cooling Tower that generates a cooling effect at their plant and has claimed deduction u/s 80 1A(4)(iv) amounting to Rs. 1,62,14,945/ disallowed by the Assessing Officer. For claiming the deduction ITA No. 2911/MUM/2025 deduction under Section 80G, being based on a plausible and available interpretation of the law, was not erroneous No. 2 of the appeal of the assessee is accordingly allowed. In ground No. 3, the assessee has challenged the finding of the learned PCIT in holding that the deduction allowed under section 80IA of the Act in respect of the cooling tower was erroneous. The contention of the assessee is that there was no error in the claim of deduction, as the cooling tower constituted an eligible undertaking engaged in generation of cooling power. In support of this ground, the learned counsel for the assessee drew our attention to the submissions filed before the learned PCIT, a copy whereof is placed at page 19 of the paper book. For ready reference, the relevant reply is reproduced hereunder: 2.1 On plain reading of section 801A(4) (iv) of the Act, it could be seen that deduction under section 801A is available in respec profit or gains derived from the business of generation of 'power'. The word power is not defined under Income-tax Act ('the Act'). However, in the decision of Apex Court in the case of CIT Tanfac Industries Ltd (SLP No. 18537 of 2009) (copy of t decision is attached as Annexure-7) has laid down the ration wherein it was held that steam is also form of power and assessee is entitled to deduction u/s 80-IA on the same on captive basis. The rationale of eligibility of section 801A deduction on am and cooling power is similar and Courts are taking consistent views on the same. 2.2 In the notice issued under Section 263, at paragraph 2, Your Honour has stated that: The assessee has installed a cooling Tower that generates a cooling effect at their plant and has claimed deduction u/s 80 1A(4)(iv) amounting to Rs. 1,62,14,945/- which should have been disallowed by the Assessing Officer. For claiming the deduction Anuh Pharma Ltd 24 ITA No. 2911/MUM/2025 deduction under Section 80G, being based on a plausible and available interpretation of the law, was not erroneous. The ground owed. In ground No. 3, the assessee has challenged the finding of the learned PCIT in holding that the deduction allowed under section 80IA of the Act in respect of the cooling tower was erroneous. The ror in the claim of deduction, as the cooling tower constituted an eligible undertaking engaged in generation of cooling power. In support of this ground, the learned counsel for the assessee drew our attention to the CIT, a copy whereof is placed at page 19 of the paper book. For ready reference, the relevant reply 2.1 On plain reading of section 801A(4) (iv) of the Act, it could be seen that deduction under section 801A is available in respect of profit or gains derived from the business of generation of 'power'. tax Act ('the Act'). However, in the decision of Apex Court in the case of CIT-vs.- Tanfac Industries Ltd (SLP No. 18537 of 2009) (copy of the 7) has laid down the ration wherein it was held that steam is also form of power and IA on the same on captive basis. The rationale of eligibility of section 801A deduction on am and cooling power is similar and Courts are taking 2.2 In the notice issued under Section 263, at paragraph 2, Your The assessee has installed a cooling Tower that generates a cooling effect at their plant and has claimed deduction u/s 80- which should have been disallowed by the Assessing Officer. For claiming the deduction Printed from counselvise.com assessee has relied on the decision of Hon'ble ITAT in the case Saf Yeast Company Private Limited vs. DCIT (ITA No.1635/Mum/2015, dated 24 Hon'ble Supreme Court decision in the case of Tanfac Industries (SLP No. 18537 of 2009), Hon' form of power. On the same basis it was claimed by the assessee that cooling effect generated through Cooling Tower also falls in the definition of Power. It is also seen that the auditor who has certified Form No. 10CC deduction u/s. 801A has qualified this fact. However, the facts of the cited case are different from those in the case of assessee. In the cited case decided by the Hon'ble Supreme Court, the question was whether 801A. Hon'ble Supreme Court while delivering the decision has held that the power generated through steam is eligible for deduction u/s. 801A. However, in the case of assessee, the assessee has installed co generates cooling effect through \"cooling Tower\" which is different from the power generated through steam. 2.3 However, basis for making the revision is factually incorrect, the assessee would like to highlight that, the Tribunal in case of Saf Yeast Company Private Limited v. DCIT (ITA No. 1635/Mum/2015, Date of order 24 the order is attached as Annexure 8] has specifically held that, power generating by Cooling Tower falls in and is eligible for 801A deduction. In taking this view, the tribunal relied on the ratio laid down in the decision of Apex Court in the case of Tanfac Industries Ltd (Supra) and the Delhi Tribunal decision in the case of SIAL SBEC Following were the important facts highlighted by Court in allowing section 80IA deduction: Tribunal referred to the CIT (A) observations that the term 'Power' has not been defined to mean electrical power to the exclusion of other forms of power and the term has to be understood in its natural meaning. Tribunal further stated that legislature has clearly provided benefit of deduction u/s 80 generation of any form of power generated by an undertaking. Just like steam, cooling power/Refrigeration power is also a form of power. The power generated by the Cooling Tower is known as Refrigeration Power or Cooling Power. Cooling or Refrigeration Power, as the name suggests, is used in reducing the temperature of an object, whether solid, liquid or gaseous. ITA No. 2911/MUM/2025 see has relied on the decision of Hon'ble ITAT in the case Saf Yeast Company Private Limited vs. DCIT (ITA No.1635/Mum/2015, dated 24-11-2017) wherein, relying on Hon'ble Supreme Court decision in the case of Tanfac Industries (SLP No. 18537 of 2009), Hon'ble ITAT had held that steam is also form of power. On the same basis it was claimed by the assessee that cooling effect generated through Cooling Tower also falls in the definition of Power. It is also seen that the auditor who has certified Form No. 10CCB in the case of assessee for claiming the deduction u/s. 801A has qualified this fact. However, the facts of the cited case are different from those in the case of assessee. In the cited case decided by the Hon'ble Supreme Court, the question was whether the power generated through steam is eligible for 801A. Hon'ble Supreme Court while delivering the decision has held that the power generated through steam is eligible for deduction u/s. 801A. However, in the case of assessee, the assessee has installed cooling Tower at their plant which generates cooling effect through \"cooling Tower\" which is different from the power generated through steam. 2.3 However, basis for making the revision is factually incorrect, the assessee would like to highlight that, the Hon'ble Jurisdictional Tribunal in case of Saf Yeast Company Private Limited v. DCIT (ITA No. 1635/Mum/2015, Date of order 24-11-2017) [the copy of the order is attached as Annexure 8] has specifically held that, power generating by Cooling Tower falls in the definition of Power and is eligible for 801A deduction. In taking this view, the tribunal relied on the ratio laid down in the decision of Apex Court in the case of Tanfac Industries Ltd (Supra) and the Delhi Tribunal decision in the case of SIAL SBEC Bioenergy Ltd. vs. DCIT. Following were the important facts highlighted by Court in allowing section 80IA deduction: Tribunal referred to the CIT (A) observations that the term 'Power' has not been defined to mean electrical power to the exclusion of forms of power and the term has to be understood in its natural meaning. Tribunal further stated that legislature has clearly provided benefit of deduction u/s 80-IA of the Act for generation of any form of power generated by an undertaking. am, cooling power/Refrigeration power is also a form of power. The power generated by the Cooling Tower is known as Refrigeration Power or Cooling Power. Cooling or Refrigeration Power, as the name suggests, is used in reducing the temperature , whether solid, liquid or gaseous. Anuh Pharma Ltd 25 ITA No. 2911/MUM/2025 see has relied on the decision of Hon'ble ITAT in the case Saf Yeast Company Private Limited vs. DCIT (ITA 2017) wherein, relying on Hon'ble Supreme Court decision in the case of Tanfac Industries ble ITAT had held that steam is also form of power. On the same basis it was claimed by the assessee that cooling effect generated through Cooling Tower also falls in the definition of Power. It is also seen that the auditor who has B in the case of assessee for claiming the deduction u/s. 801A has qualified this fact. However, the facts of the cited case are different from those in the case of assessee. In the cited case decided by the Hon'ble Supreme Court, the question the power generated through steam is eligible for 801A. Hon'ble Supreme Court while delivering the decision has held that the power generated through steam is eligible for deduction u/s. 801A. However, in the case of assessee, the oling Tower at their plant which generates cooling effect through \"cooling Tower\" which is different 2.3 However, basis for making the revision is factually incorrect, Hon'ble Jurisdictional Tribunal in case of Saf Yeast Company Private Limited v. DCIT 2017) [the copy of the order is attached as Annexure 8] has specifically held that, the definition of Power and is eligible for 801A deduction. In taking this view, the tribunal relied on the ratio laid down in the decision of Apex Court in the case of Tanfac Industries Ltd (Supra) and the Delhi Tribunal Bioenergy Ltd. vs. DCIT. Following were the important facts highlighted by Court in Tribunal referred to the CIT (A) observations that the term 'Power' has not been defined to mean electrical power to the exclusion of forms of power and the term has to be understood in its natural meaning. Tribunal further stated that legislature has IA of the Act for generation of any form of power generated by an undertaking. am, cooling power/Refrigeration power is also a form of power. The power generated by the Cooling Tower is known as Refrigeration Power or Cooling Power. Cooling or Refrigeration Power, as the name suggests, is used in reducing the temperature Printed from counselvise.com 2.4 The issue in both these cases revolves around whether the power generated through steam, or a cooling effect generated by a cooling tower, can be eligible for deduction under section 80 2.5 While it is true that Hon'ble Supreme Court dealt with the issue of whether steam and captively used qualifies as power for the purposes of Section 80 IA. The ratio of this decision was later reinforced by the Hon'ble ITAT in Saf Ye was held that the power generated through a cooling tower also qualifies as power and is eligible for the same deduction u/s 80 IA. 2.6 Thus, Your honour is incorrect in mentioning that, the decision of Hon'ble Mumbai Tribunal pertains to generation of steam and not cooling power and the facts of both the case are different. The assessee would like to highlight that, facts of both the case are same and squarely 8.2 The learned counsel for the ass the decision of the Co the case of Saf Yeast Company Pvt. Ltd. v. Dy. CIT to 1637/Mum/2014 and ITA Nos. 1777 to 1780/Mum/2014 pertaining to assessment years 2005 decision, it was held that generation of cooling power falls within the ambit of “power generation” and is, therefore, eligible for deduction under section 80IA of the Act. The learned PCIT, however, distinguished the said decision ruling therein was rendered in the context of steam generation. The relevant observations of the learned PCIT are reproduced hereunder: “5.1 On going through the provisions of Section 80 seen that the same applies t any part of India for generation or generation and distribution of power if it begins to generate power during the period 01.04.1993 ITA No. 2911/MUM/2025 2.4 The issue in both these cases revolves around whether the power generated through steam, or a cooling effect generated by a cooling tower, can be eligible for deduction under section 80 2.5 While it is true that in the case of Tanfac Industries (supra), the Hon'ble Supreme Court dealt with the issue of whether steam and captively used qualifies as power for the purposes of Section 80 IA. The ratio of this decision was later reinforced by the Hon'ble ITAT in Saf Yeast Company Private Limited's (supra) case where it was held that the power generated through a cooling tower also qualifies as power and is eligible for the same deduction u/s 80 2.6 Thus, Your honour is incorrect in mentioning that, the decision on'ble Mumbai Tribunal pertains to generation of steam and not cooling power and the facts of both the case are different. The assessee would like to highlight that, facts of both the case are same and squarely covered.” The learned counsel for the assessee further placed reliance on the decision of the Co-ordinate Bench of the Mumbai Tribunal in Saf Yeast Company Pvt. Ltd. v. Dy. CIT in ITA Nos. 1634 to 1637/Mum/2014 and ITA Nos. 1777 to 1780/Mum/2014 pertaining to assessment years 2005-06 to 2008-09. In the said decision, it was held that generation of cooling power falls within the ambit of “power generation” and is, therefore, eligible for deduction under section 80IA of the Act. The learned PCIT, however, distinguished the said decision on the ground that the ruling therein was rendered in the context of steam generation. The relevant observations of the learned PCIT are reproduced 5.1 On going through the provisions of Section 80- of the Act it is seen that the same applies to an undertaking which is set up in any part of India for generation or generation and distribution of power if it begins to generate power during the period 01.04.1993 Anuh Pharma Ltd 26 ITA No. 2911/MUM/2025 2.4 The issue in both these cases revolves around whether the power generated through steam, or a cooling effect generated by a cooling tower, can be eligible for deduction under section 80-IA. in the case of Tanfac Industries (supra), the Hon'ble Supreme Court dealt with the issue of whether steam and captively used qualifies as power for the purposes of Section 80- IA. The ratio of this decision was later reinforced by the Hon'ble ast Company Private Limited's (supra) case where it was held that the power generated through a cooling tower also qualifies as power and is eligible for the same deduction u/s 80- 2.6 Thus, Your honour is incorrect in mentioning that, the decision on'ble Mumbai Tribunal pertains to generation of steam and not cooling power and the facts of both the case are different. The assessee would like to highlight that, facts of both the case are essee further placed reliance on ordinate Bench of the Mumbai Tribunal in in ITA Nos. 1634 to 1637/Mum/2014 and ITA Nos. 1777 to 1780/Mum/2014 09. In the said decision, it was held that generation of cooling power falls within the ambit of “power generation” and is, therefore, eligible for deduction under section 80IA of the Act. The learned PCIT, on the ground that the ruling therein was rendered in the context of steam generation. The relevant observations of the learned PCIT are reproduced of the Act it is o an undertaking which is set up in any part of India for generation or generation and distribution of power if it begins to generate power during the period 01.04.1993 Printed from counselvise.com to 31.03.2017. The provision clearly applies to the entities which are in the business power. On going through the provisions of Section 80 Act, it is clear that the intent of legislature is to provide incentive by way of deduction under section 801A of the Income Tax Act to the enterprises engaged in generation or generation and distribution of power. 5.2 On perusal of details furnished by the assessee, it is seen that the assessee has installed cooling Tower at their plant which generates cooling effect through \"Cooling Tower\" and utilized by the company on captive basis for its manufacturing processes. The generation of 'cooling power' in the case of assessee is nothing but transfer of heat through heat exchangers and not transformation of energy into power. On the contra actual generation of power is inherently through use of coal or water and not exchange of heat in cooling tower. It is also seen that the facts of the present case are clearly distinguishable from the facts of Tanfac Industries (SLP No. 18537 of 2009) the Hon'ble Supreme Court wherein the issue involved was that of power generation through steam. The facts of the assessee's case are also distinguishable from that of Saf Yeast Company Private Limited decided by the Hon'ble ITAT, Mumbai since t manufacturing process involved in the said case is totally different from that of the assessee. Further, the Department has not accepted the said decision of Hon'ble ITAT, Mumbai and further appeal has been preferred before the Hon'ble Bombay High court which is pending adjudication. Hence the assessee is not eligible for claim of deduction u/s. 80 deduction of Rs. 1,62,14,945/ IA(4) of the Act has been erroneously allowed by the Assessin Officer while passing the Assessment Order dated 8.3 We have carefully considered the rival submissions and examined the record. interpretation of the expression “generation of power” occurring in section 80-IA of the Act. With subscribe to the construction canvassed on behalf of the assessee. 8.4 The term “power parlance, been understood as referring to electrical power. Section ITA No. 2911/MUM/2025 to 31.03.2017. The provision clearly applies to the entities which are in the business of generation or generation and distribution of power. On going through the provisions of Section 80 Act, it is clear that the intent of legislature is to provide incentive by way of deduction under section 801A of the Income Tax Act to terprises engaged in generation or generation and distribution of power. 5.2 On perusal of details furnished by the assessee, it is seen that the assessee has installed cooling Tower at their plant which generates cooling effect through \"Cooling Tower\" and utilized by the company on captive basis for its manufacturing processes. The generation of 'cooling power' in the case of assessee is nothing but transfer of heat through heat exchangers and not transformation of energy into power. On the contra actual generation of power is inherently through use of coal or water and not exchange of heat in cooling tower. It is also seen that the facts of the present case are clearly distinguishable from the facts of Tanfac Industries (SLP No. 18537 of 2009) the Hon'ble Supreme Court wherein the issue involved was that of power generation through steam. The facts of the assessee's case are also distinguishable from that of Saf Yeast Company Private Limited decided by the Hon'ble ITAT, Mumbai since t manufacturing process involved in the said case is totally different from that of the assessee. Further, the Department has not accepted the said decision of Hon'ble ITAT, Mumbai and further appeal has been preferred before the Hon'ble Bombay High court which is pending adjudication. Hence the assessee is not eligible for claim of deduction u/s. 80-IA(4) of the Act. Accordingly, the deduction of Rs. 1,62,14,945/- claimed by the assessee u/s.80 IA(4) of the Act has been erroneously allowed by the Assessin Officer while passing the Assessment Order dated 23.09.2022. We have carefully considered the rival submissions and examined the record. The central controversy pertains to the interpretation of the expression “generation of power” occurring in IA of the Act. With due respect, we are unable to subscribe to the construction canvassed on behalf of the assessee. The term “power” has, in common commercial and statutory parlance, been understood as referring to electrical power. Section Anuh Pharma Ltd 27 ITA No. 2911/MUM/2025 to 31.03.2017. The provision clearly applies to the entities which of generation or generation and distribution of power. On going through the provisions of Section 80-IA(4) of the Act, it is clear that the intent of legislature is to provide incentive by way of deduction under section 801A of the Income Tax Act to terprises engaged in generation or generation and 5.2 On perusal of details furnished by the assessee, it is seen that the assessee has installed cooling Tower at their plant which generates cooling effect through \"Cooling Tower\" and which is utilized by the company on captive basis for its manufacturing processes. The generation of 'cooling power' in the case of assessee is nothing but transfer of heat through heat exchangers and not transformation of energy into power. On the contrary, actual generation of power is inherently through use of coal or water and not exchange of heat in cooling tower. It is also seen that the facts of the present case are clearly distinguishable from the facts of Tanfac Industries (SLP No. 18537 of 2009) decided by the Hon'ble Supreme Court wherein the issue involved was that of power generation through steam. The facts of the assessee's case are also distinguishable from that of Saf Yeast Company Private Limited decided by the Hon'ble ITAT, Mumbai since the manufacturing process involved in the said case is totally different from that of the assessee. Further, the Department has not accepted the said decision of Hon'ble ITAT, Mumbai and further appeal has been preferred before the Hon'ble Bombay High court which is pending adjudication. Hence the assessee is not eligible IA(4) of the Act. Accordingly, the claimed by the assessee u/s.80- IA(4) of the Act has been erroneously allowed by the Assessing 23.09.2022.” We have carefully considered the rival submissions and The central controversy pertains to the interpretation of the expression “generation of power” occurring in respect, we are unable to subscribe to the construction canvassed on behalf of the assessee. ” has, in common commercial and statutory parlance, been understood as referring to electrical power. Section Printed from counselvise.com 80-IA, in express terms, refers to undertakings engaged in the business of “generation” or “generation and distribution of power,” and clause (b) of sub distribution by laying a network of new transmission or distribution lines.” Such language unmistakably points to electricity and its infrastructural transmission. It does not extend to mechanical or thermodynamic processes which merely regulate temperature. 8.5 A cooling tower, by its very nature, it is a heat exchanger foundation of the Assessee’s claim and the of coordinate bench of ITAT in the case of Saf Yeast Compnay Private Limited (supra) what a refrigeration cooling tower does and a gross misinterpretation of the term \"power\" as intended by Parliament in Section 80-IA of the Act. 8.6 To understand the one must turn to the fundamental principles of ‘thermodynamics’, which def 8.7 In physics, ‘power or energy is transferred. The standard unit of power is the Watt (W), which is one Joule of energy per second. generation” refers to the creation of a new, usable form of energy such as the conversion of fuel into electricity or water’s potential ITA No. 2911/MUM/2025 IA, in express terms, refers to undertakings engaged in the business of “generation” or “generation and distribution of power,” of sub-section (4)(iv) speaks of “transmission or distribution by laying a network of new transmission or distribution lines.” Such language unmistakably points to electricity and its infrastructural transmission. It does not extend to mechanical or dynamic processes which merely regulate temperature. A cooling tower, by its very nature, does not \"g it is a heat exchanger and a net Consumer of Power. foundation of the Assessee’s claim and the reliance placed on rdinate bench of ITAT in the case of Saf Yeast Compnay Private Limited (supra) is a fundamental mischaracterization of what a refrigeration cooling tower does and a gross misinterpretation of the term \"power\" as intended by Parliament in he Act. To understand the meaning of ‘power’ from scientific angle one must turn to the fundamental principles of , which define these terms with precision. power’ is defined as the rate at which work is done or energy is transferred. The standard unit of power is the Watt (W), which is one Joule of energy per second. In its true sense, “power generation” refers to the creation of a new, usable form of energy s the conversion of fuel into electricity or water’s potential Anuh Pharma Ltd 28 ITA No. 2911/MUM/2025 IA, in express terms, refers to undertakings engaged in the business of “generation” or “generation and distribution of power,” section (4)(iv) speaks of “transmission or distribution by laying a network of new transmission or distribution lines.” Such language unmistakably points to electricity and its infrastructural transmission. It does not extend to mechanical or dynamic processes which merely regulate temperature. does not \"generate power, and a net Consumer of Power. The very reliance placed on order rdinate bench of ITAT in the case of Saf Yeast Compnay is a fundamental mischaracterization of what a refrigeration cooling tower does and a gross misinterpretation of the term \"power\" as intended by Parliament in meaning of ‘power’ from scientific angle, one must turn to the fundamental principles of ‘physics’ and ine these terms with precision. is defined as the rate at which work is done or energy is transferred. The standard unit of power is the Watt (W), n its true sense, “power generation” refers to the creation of a new, usable form of energy— s the conversion of fuel into electricity or water’s potential Printed from counselvise.com energy into mechanical and electrical output. Refrigeration, by contrast, does not generate power or create “cold,” but merely transfers heat from a colder region to a hotter one, an operation contrary to the natural direction of heat flow under the Second Law of Thermodynamics. Authoritative texts in physics and thermodynamics uniformly affirm that such transfer is possible only with external work input, thereby distinguishing refrigeration as a process of energy transfer, not energy generation. 8.8 A ‘cooling’ tower is a specific type of heat exchanger. Its sole function is to take heated water from an industrial process and reject that waste heat into the atmosphere. It achieves this primarily through evaporative cooling. To facilitate this process, it uses fans and pumps, which consume electrical power. 8.9 A refrigeration cooling tower is fundamentally a thermodynamic machine that consumes power (work input) to move heat. To describe its func a scientific misnomer and an oxymoron. It does not generate any usable energy; it dissipates unwanted energy (waste heat). The output is chilled water, a process utility, not a form of power that can be harnessed to do work on an external system. 8.10 Applying the principles of Interpretation), the meaning of \"power\" in Section 80 cannot be read in isolation. It must be read alongside clause (iv)(b), ITA No. 2911/MUM/2025 energy into mechanical and electrical output. Refrigeration, by contrast, does not generate power or create “cold,” but merely transfers heat from a colder region to a hotter one, an operation contrary to the natural direction of heat flow under the Second Law of Thermodynamics. Authoritative texts in physics and thermodynamics uniformly affirm that such transfer is possible only with external work input, thereby distinguishing refrigeration a process of energy transfer, not energy generation. tower is a specific type of heat exchanger. Its sole function is to take heated water from an industrial process and reject that waste heat into the atmosphere. It achieves this through evaporative cooling. To facilitate this process, it uses fans and pumps, which consume electrical power. A refrigeration cooling tower is fundamentally a thermodynamic machine that consumes power (work input) to move heat. To describe its function as the \"generation of cooling power\" is a scientific misnomer and an oxymoron. It does not generate any usable energy; it dissipates unwanted energy (waste heat). The output is chilled water, a process utility, not a form of power that d to do work on an external system. Applying the principles of Noscitur a Sociis he meaning of \"power\" in Section 80 cannot be read in isolation. It must be read alongside clause (iv)(b), Anuh Pharma Ltd 29 ITA No. 2911/MUM/2025 energy into mechanical and electrical output. Refrigeration, by contrast, does not generate power or create “cold,” but merely transfers heat from a colder region to a hotter one, an operation contrary to the natural direction of heat flow under the Second Law of Thermodynamics. Authoritative texts in physics and thermodynamics uniformly affirm that such transfer is possible only with external work input, thereby distinguishing refrigeration a process of energy transfer, not energy generation. tower is a specific type of heat exchanger. Its sole function is to take heated water from an industrial process and reject that waste heat into the atmosphere. It achieves this through evaporative cooling. To facilitate this process, it uses fans and pumps, which consume electrical power. A refrigeration cooling tower is fundamentally a thermodynamic machine that consumes power (work input) to move tion as the \"generation of cooling power\" is a scientific misnomer and an oxymoron. It does not generate any usable energy; it dissipates unwanted energy (waste heat). The output is chilled water, a process utility, not a form of power that (i.e. Contextual he meaning of \"power\" in Section 80-IA(4)(iv)(a) cannot be read in isolation. It must be read alongside clause (iv)(b), Printed from counselvise.com which speaks of distribution by laying a network of new transmission or distribution lines.\" This language is uniquely and exclusively applicable to the electrical power sector. Electricity is transmitted over long distances through a grid. Chilled water, the output of a cooling tower, is piped over short distances within a factory. 8.11 The inclusion of clause (b) acts as a contextual illuminator, clarifying that Parliament's focus was on the electrical grid and its components. Interpreting \"power\" to include \"cooling power\" renders the specific language of clause (b) incongruous and out of place, violating the principle of harmonious construction. 8.12 Every tax incentive provision is enacted with a specific economic objective. Th the critical shortage of electrical power in the country by encouraging private investment in power plants. The Memorandum explaining the provisions of the Finance Bill, 1993, which introduced this incentive, co generation\" in the context of the national infrastructure deficit. 8.13 To extend this benefit to a standard piece of industrial equipment like a cooling tower would be to completely divorce the provision from its intended purpose. It would transform a targeted infrastructure incentive into an unintended, general industrial subsidy for any process involving temperature regulation. This ITA No. 2911/MUM/2025 undertakings that start \"transmission or distribution by laying a network of new transmission or distribution This language is uniquely and exclusively applicable to the electrical power sector. Electricity is transmitted over long distances gh a grid. Chilled water, the output of a cooling tower, is piped over short distances within a factory. The inclusion of clause (b) acts as a contextual illuminator, clarifying that Parliament's focus was on the electrical grid and its terpreting \"power\" to include \"cooling power\" renders the specific language of clause (b) incongruous and out of place, violating the principle of harmonious construction. Every tax incentive provision is enacted with a specific economic objective. The objective of Section 80-IA was to overcome the critical shortage of electrical power in the country by encouraging private investment in power plants. The Memorandum explaining the provisions of the Finance Bill, 1993, which introduced this incentive, consistently refers to boosting \"power generation\" in the context of the national infrastructure deficit. To extend this benefit to a standard piece of industrial equipment like a cooling tower would be to completely divorce the provision from its intended purpose. It would transform a targeted infrastructure incentive into an unintended, general industrial bsidy for any process involving temperature regulation. This Anuh Pharma Ltd 30 ITA No. 2911/MUM/2025 undertakings that start \"transmission or distribution by laying a network of new transmission or distribution This language is uniquely and exclusively applicable to the electrical power sector. Electricity is transmitted over long distances gh a grid. Chilled water, the output of a cooling tower, is piped The inclusion of clause (b) acts as a contextual illuminator, clarifying that Parliament's focus was on the electrical grid and its terpreting \"power\" to include \"cooling power\" renders the specific language of clause (b) incongruous and out of place, Every tax incentive provision is enacted with a specific IA was to overcome the critical shortage of electrical power in the country by encouraging private investment in power plants. The Memorandum explaining the provisions of the Finance Bill, 1993, which nsistently refers to boosting \"power generation\" in the context of the national infrastructure deficit. To extend this benefit to a standard piece of industrial equipment like a cooling tower would be to completely divorce the provision from its intended purpose. It would transform a targeted infrastructure incentive into an unintended, general industrial bsidy for any process involving temperature regulation. This Printed from counselvise.com could not have been the intent of Parliament. relevant to reproduce part of budget speech of 1993 Finance Minister on 27th February, 1993, as under: 5 7 . Electricity is a critical input for the future growth of our economy. I therefore propose to introduce a five profits and gains of new India for either generation or generation five-year tax holiday will begin from the year of 5 8 . The five-year tax holiday, in both these cases, will be part of section 80- IA of the Income these units will be entitled to the existing deduction under section 80 for the remaining period. 8.14 Thus, the reference of power with electrical power only. 8.15 We may further refer that in the case of Mercantile Insurance Co. v. Life Insurance Corpora 1969 SC 221, the Supreme Court held that the meaning of a word in a statute must be understood in the context in which it is used and not in a wide or universal sense. Commissioner of Income Tax v. Srivenkateswara Hatcheries (P) Ltd. [1999] 237 ITR 174 (SC):, the with interpreting \"produces articles or things.\" It rejected the argument that a hen \"produces\" eggs in the industrial sen stating that it is a natural process. The Court held: \"The word 'production' or 'produce' when used in juxtaposition with the word 'manufacture' takes in bringing ITA No. 2911/MUM/2025 could not have been the intent of Parliament. In this relevant to reproduce part of budget speech of 1993 27th February, 1993, as under: Electricity is a critical input for the future growth of our economy. I propose to introduce a five-year tax holiday in respect of profits and gains of new industrial undertakings set up anywhere in India for either generation or generation and distribution of power. The year tax holiday will begin from the year of generation of power. year tax holiday, in both these cases, will be part of IA of the Income-tax Act. At the end of the five ll be entitled to the existing deduction under section 80 for the remaining period. Thus, the reference of power in budget speech with electrical power only. We may further refer that in the case of North British and Mercantile Insurance Co. v. Life Insurance Corporation of India, AIR he Supreme Court held that the meaning of a word in a statute must be understood in the context in which it is used and not in a wide or universal sense. In the landmark cas Commissioner of Income Tax v. Srivenkateswara Hatcheries (P) Ltd. [1999] 237 ITR 174 (SC):, the Hon’ble Supreme Court was tasked with interpreting \"produces articles or things.\" It rejected the argument that a hen \"produces\" eggs in the industrial sen stating that it is a natural process. The Court held: \"The word 'production' or 'produce' when used in juxtaposition with the word 'manufacture' takes in bringing Anuh Pharma Ltd 31 ITA No. 2911/MUM/2025 In this reference , it is relevant to reproduce part of budget speech of 1993-94 of Hon’ble 27th February, 1993, as under: Electricity is a critical input for the future growth of our economy. I year tax holiday in respect of industrial undertakings set up anywhere in distribution of power. The generation of power. year tax holiday, in both these cases, will be part of tax Act. At the end of the five-year period, ll be entitled to the existing deduction under section 80-IA in budget speech was in relation North British and tion of India, AIR he Supreme Court held that the meaning of a word in a statute must be understood in the context in which it is used landmark case of Commissioner of Income Tax v. Srivenkateswara Hatcheries (P) Ltd. Supreme Court was tasked with interpreting \"produces articles or things.\" It rejected the argument that a hen \"produces\" eggs in the industrial sense, \"The word 'production' or 'produce' when used in juxtaposition with the word 'manufacture' takes in bringing Printed from counselvise.com into existence new goods by a process which may or may not amount to manufacture. It also intermediate products and residual products which emerge in the course of manufacture of goods.\" 8.16 The key takeaway is that the term must be understood in its commercial and industrial context. A cooling tower's operation intermediate step in a manufacturing process; it does not \"produce\" or \"generate\" a final, marketable commodity called \"power.\" It merely facilitates the main production by regulating temperature. 8.17 The Hon’ble Supreme Court in the case of Budharaja and Co. [1993] 204 ITR 412 (SC), \"industrial undertaking,\" emphasized that the entity must be engaged in the business of manufacturing or producing articles. By analogy, an undertaking claiming deduction for \"generation power\" must be in the business of generating power. A manufacturer is in the business of cooling tower is a tool for this business, not a separate business of power generation. 8.18 We may summarise our observation a \"generation of power\" as used in Section 80 through the lens of scientific accuracy, statutory context, and legislative purpose, can only mean the generation of electrical power. The Assessee's claim is based on the ITA No. 2911/MUM/2025 into existence new goods by a process which may or may not amount to manufacture. It also takes in all the by intermediate products and residual products which emerge in the course of manufacture of goods.\" The key takeaway is that the term must be understood in its commercial and industrial context. A cooling tower's operation intermediate step in a manufacturing process; it does not \"produce\" or \"generate\" a final, marketable commodity called \"power.\" It merely facilitates the main production by regulating temperature. Hon’ble Supreme Court in the case of nd Co. [1993] 204 ITR 412 (SC), while interpreting \"industrial undertaking,\" emphasized that the entity must be engaged in the business of manufacturing or producing articles. By analogy, an undertaking claiming deduction for \"generation power\" must be in the business of generating power. A manufacturer is in the business of manufacturing medicines cooling tower is a tool for this business, not a separate business of We may summarise our observation above that t \"generation of power\" as used in Section 80-IA, when interpreted through the lens of scientific accuracy, statutory context, and legislative purpose, can only mean the generation of electrical power. The Assessee's claim is based on the semantic artifice of Anuh Pharma Ltd 32 ITA No. 2911/MUM/2025 into existence new goods by a process which may or may not takes in all the by-products, intermediate products and residual products which emerge The key takeaway is that the term must be understood in its commercial and industrial context. A cooling tower's operation is an intermediate step in a manufacturing process; it does not \"produce\" or \"generate\" a final, marketable commodity called \"power.\" It merely facilitates the main production by regulating temperature. Hon’ble Supreme Court in the case of CIT v. N.C. while interpreting \"industrial undertaking,\" emphasized that the entity must be engaged in the business of manufacturing or producing articles. By analogy, an undertaking claiming deduction for \"generation of power\" must be in the business of generating power. A pharma manufacturing medicines. The cooling tower is a tool for this business, not a separate business of bove that the term IA, when interpreted through the lens of scientific accuracy, statutory context, and legislative purpose, can only mean the generation of electrical semantic artifice of Printed from counselvise.com renaming a heat rejection process as \"generation of cooling power.\" A cooling tower is a net consumer of electricity, its function is ancillary to manufacturing, and its output is not a form of power that can be transmitted or distribu contemplated by the Act. 8.19 Accordingly, the very foundation of the assessee’s claim under section 80-IA rests upon a scientific and legal misapprehension. If such contention were to be accepted, every air amount to a “power-generating” device, a conclusion wholly at odds with both science and common sense. 8.20 Having observed above required to conclusively adjudicate on the legal merits of the assessee’s eligibility und the jurisdictional infirmity of the assessment order itself our observations above are rendered merely academic. Assessing Officer failed to conduct any inquiry into this claim, which he was duty- Explanation 2 to section 263, an order passed without such inquiry is deemed to be erroneous in so far as prejudicial to the the Revenue. Thus, as far as deduction u/s 80IA is assessment order stands vitiated on this ground alone. We therefore refrain from recording a conclusive finding on the substantive eligibility of the claim under section 80 ITA No. 2911/MUM/2025 renaming a heat rejection process as \"generation of cooling power.\" A cooling tower is a net consumer of electricity, its function is ancillary to manufacturing, and its output is not a form of power that can be transmitted or distributed in the infrastructural sense contemplated by the Act. Accordingly, the very foundation of the assessee’s claim under IA rests upon a scientific and legal misapprehension. If such contention were to be accepted, every air-conditioner wo generating” device, a conclusion wholly at odds with both science and common sense. observed above, in the present case, we are not required to conclusively adjudicate on the legal merits of the assessee’s eligibility under section 80-IA. Our finding rests on the jurisdictional infirmity of the assessment order itself our observations above are rendered merely academic. Assessing Officer failed to conduct any inquiry into this claim, -bound to examine. In terms of clause (a) of Explanation 2 to section 263, an order passed without such inquiry is deemed to be erroneous in so far as prejudicial to the as far as deduction u/s 80IA is assessment order stands vitiated on this ground alone. We therefore refrain from recording a conclusive finding on the substantive eligibility of the claim under section 80-IA. Ground No. 3 of the Anuh Pharma Ltd 33 ITA No. 2911/MUM/2025 renaming a heat rejection process as \"generation of cooling power.\" A cooling tower is a net consumer of electricity, its function is ancillary to manufacturing, and its output is not a form of power ted in the infrastructural sense Accordingly, the very foundation of the assessee’s claim under IA rests upon a scientific and legal misapprehension. If conditioner would generating” device, a conclusion wholly at odds , in the present case, we are not required to conclusively adjudicate on the legal merits of the IA. Our finding rests on the jurisdictional infirmity of the assessment order itself and our observations above are rendered merely academic. The Assessing Officer failed to conduct any inquiry into this claim, bound to examine. In terms of clause (a) of Explanation 2 to section 263, an order passed without such inquiry is deemed to be erroneous in so far as prejudicial to the interests of as far as deduction u/s 80IA is concerned, the assessment order stands vitiated on this ground alone. We therefore refrain from recording a conclusive finding on the substantive Ground No. 3 of the Printed from counselvise.com assessee’s appeal is, therefore, rendered academic and stands dismissed as infructuous. 9. As far as ground No. 4 of the appeal is concerned which is in respect of ratios laid down in various decisions, we are respectfully in agreement with the ratios laid down in Hon’ble Courts and to the extent applicable followed. Accordingly, the ground No. 4 of the appeal of the assessee is allowed to that extent 10. In summation, the order passed under se learned PCIT is upheld to the extent of deduction claimed under section 80-IA of the Act. However, in so far as it relates to deduction under section 80G, we find that due inquiry was carried out by the Assessing Officer and no error preju established. To that extent, the revisional order is set aside. 11. In the result, the appeal of the assessee is partly allowed. Order pronounced in the open Court on Sd/ (SANDEEP GOSAIN JUDICIAL MEMBER Mumbai; Dated: 30/09/2025 Rahul Sharma, Sr. P.S. ITA No. 2911/MUM/2025 assessee’s appeal is, therefore, rendered academic and stands dismissed as infructuous. As far as ground No. 4 of the appeal is concerned which is in respect of ratios laid down in various decisions, we are respectfully with the ratios laid down in above decisions of the and to the extent applicable, we have already Accordingly, the ground No. 4 of the appeal of the assessee is allowed to that extent. In summation, the order passed under section 263 by the learned PCIT is upheld to the extent of deduction claimed under IA of the Act. However, in so far as it relates to deduction under section 80G, we find that due inquiry was carried out by the Assessing Officer and no error prejudicial to the Revenue is established. To that extent, the revisional order is set aside. In the result, the appeal of the assessee is partly allowed. ounced in the open Court on 30/09/2025. Sd/- Sd/ (SANDEEP GOSAIN) (OM PRAKASH JUDICIAL MEMBER ACCOUNTANT MEMBER Anuh Pharma Ltd 34 ITA No. 2911/MUM/2025 assessee’s appeal is, therefore, rendered academic and stands As far as ground No. 4 of the appeal is concerned which is in respect of ratios laid down in various decisions, we are respectfully decisions of the we have already Accordingly, the ground No. 4 of the appeal of the assessee ction 263 by the learned PCIT is upheld to the extent of deduction claimed under IA of the Act. However, in so far as it relates to deduction under section 80G, we find that due inquiry was carried out by the dicial to the Revenue is established. To that extent, the revisional order is set aside. In the result, the appeal of the assessee is partly allowed. /09/2025. 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// ITA No. 2911/MUM/2025 Copy of the Order forwarded to : BY ORDER, (Assistant Registrar) ITAT, Mumbai Anuh Pharma Ltd 35 ITA No. 2911/MUM/2025 BY ORDER, (Assistant Registrar) ITAT, Mumbai Printed from counselvise.com "