GUJARAT TEA PROCESSORS & PACKERS LTD.,AHMEDABAD V. THE PR. CIT-1, AHMEDABAD

ITA 1133/AHD/2025

AI Insights

The case involves Gujarat Tea Processors & Packers Ltd., which appealed against the order of the Principal Commissioner of Income Tax (PCIT), Ahmedabad. The PCIT had invoked revisionary powers under section 263 of the Income-tax Act, 1961, claiming that the original assessment order was erroneous and prejudicial to the interests of the Revenue concerning deductions under section 80G and non-disallowance of interest under sections 201(1A) and 206C(7). The Tribunal examined whether the PCIT's intervention was justified, considering the detailed scrutiny and inquiries made during the original assessment. The Tribunal concluded that the PCIT had not demonstrated any specific error in the assessment order, leading to the allowance of the assessee's appeal.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 827204 (ITAT-AHMEDABAD)
• Duration Of Justice: 7 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: D
• Assessment Year: 2020-2021
• Appeal Filed On: 21-05-2025
• Other Referred Cases: TTEC India Customer Solutions (P.) Ltd. vs. PCIT, Hemani Industries Ltd. vs. PCIT, Sonata Information vs. CIT, Agilent Technologies (International) P. Ltd. vs. ACIT, Jashan Jewels (P.) Ltd. vs. PCIT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SHER SINGH
• Assessee Lawyers: VISHAL KALRA
• Keywords: Set aside; Difference of opinion; Charitable institution; Revision of order
• Section: 143(3); 263; 37; 14A; 80G

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “D” BENCH, AHMEDABAD BEFORE DR. B.R.R. KUMAR, VICE-PRESIDENT SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER I.T.A. No.1133/Ahd/2025 (Assessment Year: 2020-21) Gujarat Tea Processors & Packers Ltd., Waghbakri House, Opp. Parimal Garden, Opp. Parimal Garden Ambawadi, Ahmedabad-380006 [PAN : AAACG5594L] Vs. Principal Commissioner of Income Tax-1, Ahmedabad (Appellant) .. (Respondent) Appellant by : Shri Vishal Kalra, AR Respondent by: Shri Sher Singh, CIT-DR Date of Hearing 10.11.2025 Date of Pronouncement 06.01.2026 O R D E R PER DR. B.R.R. KUMAR, VICE-PRESIDENT:- This appeal has been filed by the assessee against the order passed by the Ld. Principal Commissioner of Income-tax, Ahmedabad (hereinafter referred to as \"PCIT\" for short), dated 12.03.2025, in exercise of his revisionary powers under Section 263 of the Income-tax Act, 1961 [hereinafter referred to as “the Act”], for the Assessment Year (AY) 2020-21. 2. The assessee has raised the following grounds of appeal: 1. That on the facts and circumstances of the case and in law, the order passed by the PCIT is bad in law and void ab initio, and therefore ought to be quashed. 2. That on the facts and circumstances of the case and in law, the PCIT erred in arbitrarily holding that the assessment order passed under section 143(3) of the Printed from counselvise.com ITA No. 1133/Ahd/2025 Asst. Year : 2020-21 - 2– Act is erroneous and prejudicial to the interest of the revenue, without demonstrating how the twin conditions are getting satisfied in case of the Appellant. 3. That on the facts and circumstances of the case and in law, the PCIT erred in assuming jurisdiction under section 263 of the Act by merely setting aside the assessment order passed by the AO; (i) especially when the issues were verified by the AO during the assessment proceedings; (ii) and directing the AO to make further enquiries and undertake the assessment afresh in respect of issue of interest under section 201(1A)/206C(7) of the Act. 4. That on the facts and circumstances of the case and in law, the PCIT erred in not appreciating that the interest on Tax Deducted or Collected at Source was not claimed as an expense by the Appellant, and therefore, any disallowance in this regard is not warranted, thereby, demonstrating non-application of mind and vitiating the very basis of jurisdiction assumed under section 263 of the Act. 5. That on the facts and circumstances of the case and in law, the PCIT erred in not allowing the deduction under section 80G of the Act, as such deduction does not defeat the purpose of corporate social responsibility (‘CSR’) expenditure. Your appellant prays for leave to add to alter and/or to amend any of the grounds before the final hearing of the appeal. 3. The brief facts of the case are that the assessee is engaged in the business of procuring, processing, blending and selling packaged tea to customers. The return of income for AY 2020-21 was filed on 13.02.2021 declaring total income of Rs.1,41,33,67,660/-. The case was selected for scrutiny and assessment was completed u/s 143(3) r.w.s. 144B of the Act on 22.09.2022, determining total income at Rs.1,41,92,12,839/-. During assessment, the Assessing Officer made additions of Rs.49,69,965/- u/s 14A and Rs.8,75,268/- on account of provision for employee benefits u/s. 37 of the Act. Subsequently, the Ld. PCIT invoked revisionary jurisdiction under section 263 of the Act on two issues, viz.:- Printed from counselvise.com ITA No. 1133/Ahd/2025 Asst. Year : 2020-21 - 3– (i) Allowability of deduction claimed u/s 80G in respect of donations stated to be CSR expenditure; and (ii) Non-disallowance of interest u/s 201(1A)/206C(7) of the Act amounting to Rs.1,70,234/-. 4. The Ld. PCIT held that the assessment order was erroneous and prejudicial to the interest of the Revenue and set aside the assessment order with directions to the AO to frame a fresh assessment on the above issues. 5. Aggrieved by the order of the Ld. PCIT, the assessee is now in appeal before the Tribunal. 6. The Ld. AR, before us, submitted that the assessment was completed after detailed scrutiny and due inquiry on the issues of deduction claimed u/s 80G and interest u/s 201(1A) of the Act. It was contended that all relevant details, including audited financial statements, tax audit report, donation receipts, computation of income, and interest details, were furnished during assessment proceedings and duly examined by the Assessing Officer. According to the Ld. AR, the revision under section 263 was initiated merely on a difference of opinion, without pointing out any lack of inquiry or error in the assessment order. It was, therefore, submitted that the twin conditions prescribed u/s 263 were not satisfied and the impugned order deserved to be quashed. 7. The Ld. DR, on the other hand, supported the order passed by the Ld. PCIT and submitted that the Assessing Officer had failed to make Printed from counselvise.com ITA No. 1133/Ahd/2025 Asst. Year : 2020-21 - 4– proper and adequate inquiry on the issues raised in the revision order. The Ld. DR, therefore, prayed that the order passed u/s 263 be upheld. 8. We have heard the rival submissions and perused the material available on record. It is evident that the issues sought to be revised by the Ld. PCIT were specifically examined by the Assessing Officer during the course of assessment proceedings. The Assessing Officer had called for relevant details and the assessee had furnished the same, on the basis of which the assessment order under section 143(3) of the Act was passed. The Ld. PCIT has not brought on record any specific error or demonstrated how the assessment order is erroneous and prejudicial to the interests of the Revenue. On merits:- 201(1A) – We find that the amount of Rs.1,70,198/- was not claimed as an expense during the year under consideration, the question of disallowing the same in the impugned assessment year does not arise. The Revenue could not bring anything contra on record. Therefore, the assessment order cannot be regarded as erroneous or prejudicial to the interests of the Revenue especially when no claim has been made by the assessee. 80G - On perusal of Section 80G of the Act, it is clear that restrictions on deductibility of a donation made pursuant to CSR obligations is expressly provided u/s 80G(2)(a)(iiihk) & 80G(2)(a)(iiihl) of the Act. Therefore, Printed from counselvise.com ITA No. 1133/Ahd/2025 Asst. Year : 2020-21 - 5– other than the two restrictions clearly mentioned, no further restriction can be read into the law. 9. For the sake of ready reference, the provisions 80G(2)(a)(iiihk) & 80G(2)(a)(iiihl) of the Act are reproduced hereunder:- “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,— (i) in a case where the aggregate of the sums specified in sub- section (2) includes any sum or sums of the nature specified in sub- clause (i) or in sub-clause (iiia) or in sub-clause (iiiaa) or in sub- clause (iiiab) or in sub-clause (iiib) or in sub-clause (iiie) or in sub- clause (iiif) or in sub-clause (iiig) or in sub-clause (iiiga) or sub- clause (iiih) or sub-clause (iiiha) or sub-clause (iiihb) or sub-clause (iiihc) or sub-clause (iiihd) or sub-clause (iiihe) or sub-clause (iiihf) or sub-clause (iiihg) or sub-clause (iiihh) or sub-clause (iiihi) or sub-clause (iiihj) or sub-clause (iiihk) or sub-clause (iiihl) or sub- clause (iiihm) or in sub-clause (vii) of clause (a) or in clause (c) or in clause (d) thereof, an amount equal to the whole of the sum or, as the case may be, sums of such nature plus fifty per cent of the balance of such aggregate; and (ii) in any other case, an amount equal to fifty per cent of the aggregate of the sums specified in sub-section (2). (2) The sums referred to in sub-section (1) shall be the following, namely :— (a) any sums paid by the assessee in the previous year as donations to— ……… ……… (iiihk) the Swachh Bharat Kosh, set up by the Central Government, other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under sub- Printed from counselvise.com ITA No. 1133/Ahd/2025 Asst. Year : 2020-21 - 6– section (5) of section 135 of the Companies Act, 2013 (18 of 2013); or (iiihl) the Clean Ganga Fund, set up by the Central Government, where such assessee is a resident and such sum i other than the sum spent by the assessee in pursuance of Corporate Social Responsibility under sub-section (5) of section 135 of the Companies Act, 2013 (18 of 2013); or…...” We have also examined the following decisions:- • TTEC India Customer Solutions (P.) Ltd. vs. PCIT: [2025] 176 taxmann.com 289/ITA No. 1026 of 2025 (Ahm - Trib) • Hemani Industries Ltd. vs. PCIT: [2025] 214 ITD 520 (Mum - Trib.) • Sonata Information vs. CIT: [2024] ITA No. 1402 of 2024 (Mum - Trib.) • Agilent Technologies (International) P. Ltd. vs. ACIT: [2025] 172 taxmann.com 858/ ITA No. 1171 of 2022 (Del- Trib.) • Jashan Jewels (P.) Ltd. vs. PCIT: [2025] 214 ITD 112 (Mum - Trib.) 10. Having gone through the provisions of the Act and the established judgments, on merits, we find the order of the Assessing Officer is not prejudicial to the interest of the Revenue. 11. In the result, the appeal of the assessee is allowed. The order is pronounced in the open Court on 06.01.2026. Sd/- Sd/- (T.R. SENTHIL KUMAR) (DR. B.R.R. KUMAR) JUDICIAL MEMBER VICE-PRESIDENT Ahmedabad; Dated 06.01.2026 **btk Printed from counselvise.com ITA No. 1133/Ahd/2025 Asst. Year : 2020-21 - 7– आदेश की \u0007ितिलिप अ ेिषत/Copy of the Order forwarded to : 1. अपीलाथ\u0007 / The Appellant 2. \b थ\u0007 / The Respondent. 3. संबंिधत आयकर आयु\u0015 / Concerned CIT 4. आयकर आयु\u0015(अपील) / The CIT(A)- 5. िवभागीय \bितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 6. गाड फाईल / Guard file. आदेशानुसार/ BY ORDER, True Copy सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1. Date of dictation ……words processed by the Hon’ble VP on his PC on ……05.01.2026….….. 2. Date on which the typed draft is placed before the Dictating Member ……05.01.2026………… 3. Other Member……05.01.2026………………….. 4. Date on which the approved draft comes to the Sr.P.S./P.S. ……05.01.2026………… 5. Date on which the fair order is placed before the Dictating Member for pronouncement…06.01.26…. 6. Date on which the fair order comes back to the Sr.P.S./P.S……06.01.2026……… 7. Date on which the file goes to the Bench Clerk……06.01.2026……….. 8. Date on which the file goes to the Head Clerk…………………………………... 9. The date on which the file goes to the Assistant Registrar for signature on the order 10. Date of Dispatch of the Order…………………………………… Printed from counselvise.com "