DCM SHRIRAM LIMITED,DELHI V. PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI

ITA 2593/DEL/2024

AI Insights

The case involves DCM Shriram Ltd., the appellant, contesting an order by the Principal Commissioner of Income Tax (PCIT), which invoked revisionary powers under Section 263 of the Income Tax Act, 1961. The PCIT had deemed the original assessment order erroneous and prejudicial to the interest of the Revenue, leading to a directive for re-examination of several issues including profit-linked deductions under Section 80IA, research and development expenditure claims under Section 35(2AB), and discrepancies in customs duty payments. The Tribunal's decision emphasized that the PCIT did not adequately demonstrate how the original assessment was erroneous or prejudicial, particularly noting that the Assessing Officer had engaged in substantial inquiry and had adopted one of the permissible views, which is protected under the law.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 474881 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 26-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2017-2018
• Other Referred Cases: Malabar Industrial Co. Ltd. vs. Commissioner of Income Tax, CIT vs. Development Bank, CIT vs. Sunbeam Auto Ltd., CIT vs. Gabrial India Ltd., Smt. Omwati vs PCIT, Ambuja Cements Ltd. Vs. CIT, Tata AIA Life Insurance Company Ltd. Vs PCIT, Reliable Educational Alliance Society vs Commissioner of Income-tax (Exemption), Pawan Kumar vs PCIT
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SURENDER PAL
• Assessee Lawyers: PRADEEP DINODIA; RAVI
• Keywords: Set aside; Transfer pricing; Sale consideration of property below Jantri Value; TDS; Assessment record; Revision of order
• Section: 143(3); 143(1); 263; 64; 153; 13; 14A; 50C; 115JB; 10AA; 80IA

Judgement Text

" 1 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT IN THE INCOME TAX APPELLATE TRIBUNAL DELHI DELHI BENCH ‘B’ NEW DELHI BEFORE SHRI M. BALAGANESH, ACCOUNTANT MEMBER AND SHRI YOGESH KUMAR U.S., JUDICIAL MEMBER ITA No. 2593/Del/2024 (A.Y. 2017-18) DCM SHRIRAM LTD. 2ND Floor, World mark 1(West Wing), Aerocity, New Delhi PAN: AAACD0097R Vs. Principal Commissioner of Income Tax C. R. Building, ITO, I. P. Estate, New Delhi Appellant Respondent Assessee by Shri Pradeep Dinodia, CA, Sh. Ravi Kumar, CA and Ms. Shruti Gupta, CA Revenue by Sh. Surender Pal, CIT, DR Date of Hearing 07/01/2025 Date of Pronouncement 26/03/2025 ORDER PER YOGESH KUMAR, U.S. JM: This appeal is filed by the Assessee against the order of Office of the Principal Commissioner of Income Tax, (‘PCIT’ for short)- Delhi dated 29/03/2024 for the Assessment Year 2017-18. 2. The Grounds of Appeal are as under:- “1. That on the facts and under the circumstances of the case and in law, the learned Principal Commissioner of Income tax ('ld. Pr. CIT'), Delhi-1 erred in initiating proceedings u/s 263 of the Income Tax Act ('the Act'), against the appellant. That on 2 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT the facts and under the circumstances of the case and in law, the order passed u/s 263 of the Act, by the learned Pr. CIT is erroneous. 2. That on the facts and under the circumstances of the case and in law, the Id. Pr. CIT grossly erred in holding that the assessment order dated 21.06.2021 passed by the learned Assessing Officer ('ld. AO') was erroneous as due verification was not undertaken by ld. AO on the issues identified in the said Order dated 29.03.2024. 3. That the Id. Pr. CIT failed to appreciate that the provisions of section 263 of the Act can be applied only when the twin conditions of an order being erroneous as well as prejudicial to the interest of the revenue are satisfied. 4. That the ld. Pr. CIT had mechanically initiated the proceedings by identifying as many as 30 items in his SCN dated 04.12.2023 without even alleging how the conclusion drawn by the Id. AO on such items was erroneous as well as prejudicial to the interest of revenue. 5. That the Id. Pr. CIT has erred in law and on facts in holding that order passed by the Id. AO dated 21.06.2021 is erroneous and prejudicial to the interest of the revenue, without appreciating that the assessment order cannot be said to be erroneous where the AO has taken one of the permissible views. The Id. Pr. CIT ought to have appreciated that if two views are possible, revision u/s 263 is not permissible. 6. That the learned Pr. CIT grossly erred in law in holding that the claim of section 80-1A deduction on specified domestic transactions (SDTs) which were subject matter of TP reference on which Order u/s 92CA(3) had also been passed, were beyond the scope of the powers of Pr. CIT u/s 263 as the jurisdiction on the transfer pricing issue u/s 263 lies with the Pr. CIT-TP. That the order passed u/s 263 on the issues on which TP adjustment had been made is barred by limitation. 7. That the Ld. PCIT erred in not following Doctrine of Merger by directing Id. AO for re-verification of 80-1A claim, for which an appeal is pending before CIT-(A) against the order passed 3 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT u/s 143(3) of the Act dated 21.06.2021. Thus, the order passed u/s 263, ignoring the provision of law, is bad in law and is prayed to be quashed. 8. That the Id. Pr. CIT grossly erred in law and on facts in concluding that the Id. AO failed to make an enquiry with regard to the following issues: i) The claim of the assessee u/s 801A of the Income Tax Act; ii) The claim with regard to the R&D expenditure of Rs. 14.34 Crores; iii) The alleged difference between the value of custom duty paid as per ITR and as per import-export data; 9. That the Id. Pr. CIT failed to appreciate that appropriate enquiries and details were sought on all such issues by the ld. AO for which the provisions of section 263 of the Income Tax Act could not be applied. 10. That the Id. Pr. CIT grossly erred in law by referring to Explanation-II to section 263 for holding that the Assessing Officer needs to verify the claim of the assessee with regard to 3 issues which had been already duly examined by the Id.AO 11. That the aforesaid grounds are without prejudice to each and another.” 3. Brief facts of the case are that, the Assessee filed return of income for Assessment Year 2017-18 by declaring income of the Assessee at Rs. 36,73,08,920/-. The return of the Assessee was processed u/s 143(1) of the income Tax Act, 1961 (‘Act’ for short) on a total income of Rs. 38,05,02,550/- after making adjustment/additions. The case of the Assessee was selected for scrutiny assessment through CASS and the assessment order came to be passed u/s 143(3) read with Section 144C(3) r.w. Section 144B of the Act by making adjustment of Rs. 4 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT 168,11,92, 501/-, disallowed Rs. 20,50,000/- u/s 14A of the Act, made addition of Rs. 1,12,63,690/- u/s 50C of the Act and also made addition of interest income of Rs. 8,77,84,114/- and by invoking Section 115JB of the Act. The income of the Assessee has been assessed at Rs. 667,09,13,138/-. Aggrieved by the assessment order dated 21/06/2021, the Assessee has preferred an appeal before the Ld. CIT(A), which is reported to be pending consideration. 4. Subsequent to passing of the assessment order dated 21/06/2021, the Ld. PCIT invoked revisionary power conferred on him u/s. 263 of the Act and held that the assessment order dated 21/06/2021 is erroneous in so far as prejudicial to the interest of the Revenue and directed the A.O. in following manner vide order impugned dated 29/03/2024. “1. To verify and examine the correctness and admissibility of the B01A claims of assessee amounting to Rs. 328.73 crores. While verifying the correctness of the claim, assessing officer is directed to verify whether separate books of accounts and separate balance sheet and P&L accounts are maintained for each of the eligible units and to verify the correctness of such accounts for each of the undertaking. 2. Regarding various goods and services acquired by the eligible units as per column B of form 10CEB, the same may be examined from the point of view whether any transactions are made in relation to eligible units located at DSCL Sugar Ajbapur, DSCL Sugar Hariavan, DSCL Sugar Loni, Shriram Alkali and Chemicals and Shriram fertilizers and chemicals. 5 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT 3. Since names and addresses of 8 eligible power plants are in these above 5 locations as per 801A claim documents, and there is a large scale of acquiring of goods and services at the same names and addresses as per form 10CEB, the assessing officer may extensively examine and verify if the eligible profits for deduction are correctly arrived at. In case there are transactions of any goods and services of the eligible units with any other undertaking or unit which is not eligible for deduction, the verification in view of sub-section (8) of section 801A may be undertaken for each eligible unit. For this purpose, the profits of non-eligible units at the five locations(mentioned at point 2 above) may also be examined to verify if their profits are abnormally low. The AO may apply the Principle of Preponderance of probability and the Principle of whether Apparent is Real, as the case may be. 4. The correctness of the claims of the research and development expenditure of Rs14.34 crores may be examined in view of various rules and conditions to be fulfilled for such claims as per the relevant sections and sub-sections of the Income Tax Act, 1961. 5. The difference between value of customs duties paid as per ITR and customs duties paid as per import/export data may be examined and any irreconcilability may be brought to tax as per Income Tax Act, 1961.” 5. Aggrieved by the order of the PCIT dated 29/03/2024 passed u/s 263 of the Act, the Assessee preferred the present Appeal on the grounds mentioned above. The Ld. Assessee's Representative submitted that the A.O. has duly carried out detailed examination on all the issues referred by the Ld. PCIT, further submitted that the A.O. had raised specific queries with respect to all the issues identified by the PCIT, in turn the Assessee has provided all the detailed information and documents to TPO/A.O. After going through the submissions and the 6 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT documents provided by the Assessee, the A.O. has taken plausible view and passed the assessment order after making certain additions and disallowances. The Ld. Assessee's Representative made elaborate submission and contended that the Ld. PCIT has grossly erred in passing the order impugned and submitted that the Ld. CIT(A) has not considered the fact that provisions of section 263 of the Act can be invoked only when duel conditions are fulfilled i.e. an order being erroneous as well as prejudicial to the interest of the Revenue. The Ld. PCIT without even identifying how the conclusion drawn by the A.O. was erroneous as well as prejudicial to the interest of the Revenue, invoked the provisions of Section 263 of the Act. Thus, sought for allowing the Appeal. 6. Per contra, the Ld. Departmental Representative submitted that, the case of the Assessee was selected for ‘complete scrutiny’ wherein 14 issues were identified, however, the A.O. examined only three issues. The A.O. has not applied his mind on all the 14 issues. The Ld. Departmental Representative submitted that the Explanation 2 to 263 of the Act has been invoked since the assessment order deemed to be erroneous in so far as it is prejudicial to the interest of the Revenue in the opinion of the PCIT. Therefore, same cannot be interfered by the Tribunal, accordingly, sought for dismissal of the Appeal. 7 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT 7. We have heard both the parties and perused the material available on record. The Ld. PCIT has set aside and directed the A.O. to frame assessment order on three issues:- i) Claim of profit-linked deduction made u/s 80IA of the Act. ii) Deduction u/s 35(2AB) of the Act for Research and Development Expenditure iii) Difference between custom duty paid as per ITR and as per Import Export Data 7. On the first issue i.e.‘claim of profit linked deduction made u/s 80IA of the Act’ is concerned, the Ld. PCIT in its show cause notice, mentioned the very same queries raised by the A.O. during the assessment proceedings and the Assessee has responded to the queries raised by the Assessee. The Ld. Assessee's Representative has tabulated the queriesraised by the PCIT, and also responses given by the Assessee, which are reproduced as under:- Query raised by PCIT during revisionary proceedings on 04/12/2023 Query raised by A.O. during assessment proceedings Assesseee’s reply to A.O. PCIT raised the following query vide SCN dated 04.12.2023 The AO had raised specific query vide Point No. 9 of Questionnaire dated. 08.02.2021 (PB P.no. 607). \"In ITR filed by you for AY 2017-18 you have claimed deduction under chapter VI-A. With respect to the deductions claimed under chapter VI-A during the year under consideration, kindly provide the following details:- 1. Section/sub-section wise details of deductions claimed under VI-A. 2. Details of earnings under the relevant heads against which deduction claimed. The assessee has responded to query of Id. AO vide point 8 and 9 of submission dated 15.02.2021 (PB P.no 620 & 622). 8 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT 3. Note on eligibility criteria of deductions claimed under different sections of Chapter VI-A. 4. Details of all the bank accounts along with the bank statement for the year to support the claim. 5. Documentary evidence in respect of investment/expenditure/payment etc. made to claim the deductions.\" Query raised by PCIT during revisionary proceedings Query raised by A.O. during assessment proceedings Assessee’s reply to A.O. PCIT raised the following query vide SCN dated 04.12.2023 Point No. 5 Large deduction claim u/s 80- IA 80-IB 80-IC 80-IBA 80-ID 80-IE 10A 10AA in comparison to preceding year. The AO has not made any effort to verify the genuineness of claims made by the assessee and has accepted submissions assessee. The AO had raised specific query vide Point No. 32(7) of Questionnaire dated. 03.07.2019 (PB P.no. 573). \"Deductions claimed u/s 801A/801AB/80IAC/80IB/80IC/80IB A/80ID/80IE/10A/10AA by the assessee during the year is significantly more than the deduction claimed during preceding year?\" The assessee has replied to the specific query of ld. AO vide point no 7 of submission dated 30.07.2019 (PB P.no 598) along with Form 3CEB (PB P.no 103-106) and details of Form 10CCBs. 8. Apart from the queries raised by the A.O. on the claim of deduction u/s 80IA of the Act, the same was subject to consideration before the Transfer Pricing Officer. It is found that the Ld. TPO has also called for various details duringthe TP proceedings for determination of Arm’s Length Price (‘ALP’) of specified domestic transaction carried out by the eligible unit of the Assessee with the object of verifying the claim of deduction u/s 80IA of the Act. The said queries of the TPO has been replied by the Assessee by submitting the details by producing the copy of the agreements, Form 10CCBsof the each eligible unit, power 9 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT accounts including balance sheet and profit and loss account of each eligible units. Considering the documents produced by the Assessee, transfer pricing adjustment Rs. 166.82 crore was also made by the TPO. Consequently, the assessment order was also passed making the very same addition. Thus, the TPO not only examined the issues, but also made substantial adjustment in TPO order. Thus, it is found that the observation of the PCIT that ‘the separate books of accounts and balance sheets of eligible units have not been produced by the Assessee either before the A.O. or before the PCIT’ is factually incorrect. It is found that all the requisite details were filed by the Assessee before the A.O., TPO as well as before the PCIT which could be corroborated from the submission filed by the Assessee dated 15/02/2021 placed at page No. 620-622 of the paper book, wherein the Assessee has produced all the details pertaining to such claim i.e. Form No. 10CCBs separate books of accounts, Form 3CEB, etc. 9. In so far as the second issue i.e. deduction u/s 35 (2AB) of the Act for Research and development expenditure, it is the case of the Assessee that identical queries raised by the PCIT which were also raised by the A.O. during the course of the original assessment proceedings, which were duly responded by the Assessee along with relevant details and 10 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT information. The ld. Assessee's Representative submitted the chart to substantiate his claim which reads as under: Query raised by PCIT during revisionary proceedings Query raised by PCIT during revisionary proceedings Assessee’s reply to A.O. PCIT raised the following query vide SCN dated 04.12.2023 Point No. 15 No investigation on the claim of the assessee u/s 35(2AB) The assessee in the computation of income mentioned as under:- The company is engaged in the business of hybrid seeds and for that purpose, it is carrying on the research activities under the independent unit known as 'Bioseed Research India' at Hyderabad. These research facilities have been duly approved by the prescribed Authority and accordingly. claim in terms of section 35 2(AB) of the Act equal to twice of the amount of expenditure has been made in the return of income. \"This section provides for substantial amount for deductions to the assessee. The AO should have investigated whether the assessee is entitled for such deductions or not. The claim of the assessee has been accepted by the AO without any enquiry. PCIT further vide Notice dated 23.02.2024, (Supplementary PB P.no 115) inquired: - The information documents asked b were already asked vide Point Ne Questionnaire 08.02.2021 (PB P Query No.8 Substantiate your claim R&D expenses as to what research has been carried out by you. Submit all the documents submitted by you to DSIR and the approval received from DSIR under Form 3CL. What products were launched subsequent to these researches? Where is your The AO raised queries in this Point No. 10 of C dated. 08.02.202 608). 10 \"With respect expenditure c 35(2AB), kindly following: - a. Kindly details manufacture activity undertaken by company the year consideration. b. Details revenue and expenditure undertaken company house research development facility. C. Name, PA address of the party to whom p have been m d. Mode of with sup documentary evidence e. Details of TDS deducted thereof f. Copy of agreement with the prescribed authority. g. Copy of letter of approval from the prescribed authority Department of scientific and industrial research (DSIR) h. Copy of Form No. 3CM and 3CL in support of the deduction claimed. The information and documentsasked by the PCIT were already asked by the A.O. vide Point No. 10 of Questionnaire dated 08.02.2021 (P.B No. 608). In reply to the queries of the AO, the Company had duly submitted details vide Point no. 7 and Point no. 10 of its letter dated 15.02.2021 (PB P.no 619, 622- 623). Further, all these details also submitted before PCIT vide submission 17.01.2024. All the information and documents asked by the PCIT were already furnished by the assessee before the AO vide Point no. 10 of its letter dated 15.02.2021 (PB P.no 619, 622- 623). 11 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT centre located and what all assets are deployed. Furnish the complete details of employees undertaking those researches with their complete bio-data. 10. From the above, it is found that A.O. has made exhaustive questionnaires on the issue of deduction u/s 35(2AB) of the Act for research and development expenditure and asked for all the relevant form and agreements, copy of approval from DSIR, Copy of Form 3CM, Form 3CK and 3CL, which were duly submitted to the A.O. during the assessment proceedings and the A.O. has verified all the documents and submission made by the Assessee. 11. The third issue is regarding ‘difference between custom duties paid as per ITR and as per Import export data. Even for the said issue raised by the PCIT, the identical queries raised by the A.O. have been raised by the PCIT during the provisional proceedings. The Ld. Assessee's Representative has tabulated the details which reads as under:- Query raised by PCIT during revisionary proceedings Query raised by A.O during Assessment proceedings Assessee’s reply to A.O. PCIT raised the following query vide SCN dated 04.12.2023 Point No. 10 Custom duty paid as shown in ITR is less than the Custom duty paid as per export import data. The AO did not make any effort to investigate this aspect despite the fact that this issue was highlighted as reason for selection of case scrutiny The AO had raised specific queries in this regard vide Point No. Questionnaire 32(17) of dated. 03.07.2019 (РВ Р.по. 574). 6. \"Justify/explain the following: 7. Custom duty in Part A-P & L of ITR is less than the Duty Paid as per Export Import data (received CBEC).?\" In reply to the query of the Id.AO, the assessee had responded vide point no 17 of its letter dated 30.07.2019 (PB P.no 603) as follows: -\"As regards your observation regarding custom duty shown in Part A - P&L of ITR, kindly note that no custom duty is shown in P&L A/c and rather we have shown excise duty of Rs 3,28,47,85,792/-You may please recheck at your end and confirm.\" PCIT further vide Notice dated 23.02.2024 inquired vide query no. 12 You are requested to submit how much import/custom duty you have paid. As per your submissions you have paid excise duty amounting to No. further query was raised by Ld. A.O. after receipt of such response. 12 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT Rs. 382.47 crores. Please confirm that no custom duty was imposed on you on imports made by you during the year. 12. From the above, it is found that it is not a case wherein the Assessing Officer failed to conduct enquiry rather it is the case wherein the Assessing Officer has conducted an elaborate enquiry and adopted one of the two views which was plausible view. The question would be as to whether in such circumstances the power u/s 263 of the Act would be invoked or not. The above said question is no longer res-integra and the said issue is well settled in several decisions. In the case of Malabar Industrial Co. Ltd. vs. Commissioner of Income Tax, (2000) 243 ITR 83 (SC). The Hon’ble Supreme Court held as follows :- “The phrase “prejudicial to the interests of the Revenue” has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Revenue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue ; or where two views are possible and the Income-tax Officer has taken one view which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income-tax Officer is unsustainable in law.” 13. It is the contention of the Ld. Assessee's Representative that the issue of custom duty flagged by PCIT was not a reason of CASS as alleged in the first show cause notice dated 04/12/2023. To 13 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT substantiate the said contention, the Ld. Assessee's Representative taken us to the CASS reasons in order dated 29/03/2024 produced by Page No. 34 to 37 of the Appeal set. Thus,it is found that the said observation of the PCIT is factuallyincorrect as the said issue was not provided in CASS reasons under notice issued by the A.O/NFAC dated 27/09/2019. Further the amount reported in ITR filed by the Assessee was for Excise duty which was also clarified to A.O. during the assessment proceedings and subsequently to the PCIT amounting to Rs. 32.52 crore, contending the custom duty paid by the Assessee is loaded to its inventory, goods purchased, plant and machinery cost and is not a separate line item in the P & L. It is found that the Ld. PCIT raised the issues in the show cause notice which were similar to the specific queries raised by the A.O. for which the Assessee has duly provided with all the details and information to the A.O. and the Ld. A.O. after taking into consideration of all the details and information, arrived at plausible conclusion and passed the assessment order after making substantial addition and disallowance, which cannot be interfered u/s 263 of the Act as held in following judicial pronouncements:- a) Hon'ble Bombay High court in the case of CIT vs. Development Bank [2010] 323 ITR 206/[2011] 196 Taxman 329. b) Hon'ble Delhi High Court in the case of CIT vs. Sunbeam Auto Ltd. [2011] 332 ITR 167/[2010] 189 Taxman 436. 14 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT c) CIT vs. Gabrial India Ltd. [1993] 114 CTR (Bom) 81 [1993] 203 ITR 108 (Bom) d) Smt. Omwati vs PCIT [ [2024] 158 taxmann.com 64 (Dehradun - Trib.)] e) Ambuja Cements Ltd. Vs. CIT [2022] 140 taxmann.com 347 (Mumbai- Trib.) f) Tata AIA Life Insurance Company Ltd. Vs PCIT [2023] 147 taxmann.com 56 (Mumbai-Trib.) g) Reliable Educational Alliance Society vs Commissioner of Income-tax (Exemption) [[2023] 153 taxmann.com 341 (Delhi - Trib.)] h) Pawan Kumar vs PCIT [[2024] 159 taxmann.com 61 (Delhi - Trib.)] 14. On bare reading of the order of the Ld. PCIT, it has not been stated how the assessment order dated 21.06.2021 is erroneous and prejudicial is bad in law. Further, the Ld. PCIT has not conducted necessary enquiries or verification in order to come to conclusion that the finding given by AO is erroneous. The Ld. PCIT has failed to give reasoning that the view taken by the AO is unsustainable in law and has simply expressed the view that the AO should have conducted enquiry in a particular manner as desired by him. Such a course of action of the PCIT is not in accordance with the mandate of the provisions of sec. 263 of the Act. 15. The provisions of Section 263 of the Act can be invoked only in a case where cumulative twin conditions i.e. The assessment order sought to be revised should be erroneous; and the assessment order sought to 15 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT be revised is prejudicial to the interest of the Revenue as held in following judicial pronouncements:- a) Malabar Industrial Co. Ltd vs. CIT [243 ITR 83] (Supreme Court) b) Commissioner of Income Tax (Central) Ludhiana vs Max India Ltd., (2007) 15 SCC 401 c) Hon'ble Delhi High Court in the case of Kelvinator of India Ltd. 256 ITR 1 as upheld by Hon'ble SC reported in 2010 320 ITR 561(SC) d) PCIT vs Clix Finance India (P.) Ltd. [[2024] 160 taxmann.com 357 (Delhi)] 16. The proceedings u/s 263 of the Act cannot be for the purpose of making fishing/roving enquiries w.r.t. variety of issues only with an objective of substituting his views with that of the AO. As could be seen from the various show caused notices issued by the Ld. PCIT, the PCIT is asking the Assessee to substantiate its claim by submitting the various information and documentary evidence. Apart from the same, the Ld. PCIT has dropped the revisionary proceedings on almost all issues except 3 issues, which shows that proceedings were initiated purely on guess work, surmises and with an intention to draw further information from the Assessee on the issues already settled in the assessment devoid of any basis / reason /information already being considered before issuance of SCN u/s 263 of the Act. The terms and tenure of the initial SCN dated 04.12.2023 does not indicates any concerted efforts on the part of PCIT for examination of assessment records and then forming of 16 ITA No. 2593/Del/2024 DCM Shriram Vs. Pr. CIT any reasonable belief/opinion whereupon the Assessee’s assessment should be considered for revision. Such fishing and roving enquires cannot be permitted while exercising the power conferred u/s 263 of the Act as held by various judicial pronouncements. In view of the above discussion, we find merit in the Grounds of Appeal of the Assessee accordingly, the order of the PCIT dated 21/06/2021 is hereby quashed. 17. In the result, Appeal of the Assessee is allowed. Order pronounced in the open court on 26th March, 2025 Sd/- Sd/- (M. BALAGANESH) (YOGESH KUMAR U.S.) ACCOUNTANT MEMBER JUDICIAL MEMBER Date:- 26.03.2025 R.N, Sr.P.S*/ Kavita, Sr. PS Copy forwarded to: 1. Appellant 2. Respondent 3. CIT 4. CIT(Appeals) 5. DR: ITAT ASSISTANT REGISTRAR ITAT, NEW DELHI "