Hindustan Copper Limited, Kolkata V. CIT, LTU - 1, Kolkata , Kolkata

ITA 900/KOL/2018

• Counselvise Citation: [2020] 111 COUNSELVISE.COM (IT) 7466 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 8 month(s) 25 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-01-2020
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Next Hearing Date: 24-12-2019
• Assessment Year: 2013-2014
• Appeal Filed On: 04-05-2018
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM BILASH MEENA
• Keywords: Business expenditure; Question of law; Assessment record; Capital expenditure; Set aside
• Section: 143(3); 37(1); 201; 13; 37; 263

Judgement Text

, , IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCH A KOLKATA BEFORE SHRI S.S.GODARA, JUDICIAL MEMBER AND DR. A.L. SAINI, ACCOUNTANT MEMBER ITA NO. 900 / KOL / 2018 ASSESSMENT YEAR :2013-14 HINDUSTAN COPPER LTD., TAMRA BHAWAN, 1, ASHUTOSH CHOUDHURY AVENUE, KOLKTA-700 019 [ PAN NO.AAACH 7409 R ] V/S . COMMISSIONER OF INCOME TAX, LTU-1, KOLKATA, AAYAKAR BHAWAN POORVA, 110, SHANTI PALLY, KOLKATA-700 0107 /APPELLANT .. / RESPONDENT /BY APPELLANT SHRI SANJAY BHATTACHARYA, FCA /BY RESPONDENT SHRI RAM BILASH MEENA, CIT-DR /DATE OF HEARING 24-12-2019 /DATE OF PRONOUNCEMENT -01-2020 / O R D E R PER S.S.GODARA, JUDICIAL MEMBER:- THIS ASSESSEES APPEAL FOR ASSESSMENT YEAR 2013-14 ARISES AGAINST THE COMMISSIONER OF INCOME TAX (LTU)-1, KOLKATAS ORDER DATED 08.03.2018 PASSED IN CASE F.NO.CIT/LTU/KOL/263/HCL/2017-18/112 8-1132, INVOLVING PROCEEDINGS U/S 263 OF THE INCOME TAX ACT, 1961; IN SHORT THE ACT. HEARD BOTH THE PARTIES. CASE FILE PERUSED. 2. WE ADVERT TO THE BASIC RELEVANT FACTS. THIS ASSE SSEE IS ADMITTEDLY A PUBLIC SECTOR UNDERTAKING ENGAGED IN MINING SALE OF COPPER AND OTHER BY- PRODUCTS. THE MINISTRY OF MINES, GOVERNMENT OF INDI A HOLDS PAID UP EQUITY SHAREHOLDING OF 89.95% IN THE ASSESSEE-COMPANY. THE ASSESSEE HAS FOUR OPERATIVE UNITS AT KHETRI (RAJASTHAN), MALANJKHAND COPPER PROJECT (MADHYA PRADESH), INDIA COPPER COMPLEX (JHARKHAND) AND TALA OJA COPPER PROJECT ITA NO.900/KOL/2018 A.Y. 201 3-14 HINDUSTAN COPPER LTD. VS. CIT-LTU-1, KO L. PAGE 2 (MAHARASHTRA). IT HAD FILED ITS RETURN ON 27.09.201 3 DECLARING TOTAL INCOME OF 244,15,02,590/- FOLLOWED BY SEC.115JB BOOK PROFIT C OMPUTATION OF 312,05,64,000/-. THE ASSESSING OFFICER COMPLETED RE GULAR ASSESSMENT IN QUESTION DATED 29.01.2016 MAKING VARIOUS DISALLOWAN CE(S) / ADDITION(S). IT IS THE SAID REGULAR ASSESSMENT WHICH FORM SUBJEC T-MATTER OF THE CITS SEC. 263 REVISION DIRECTIONS UNDER CHALLENGE ON THE GROUND THAT ALTHOUGH THE ASSESSEE HAD CLAIMED CORPORATE SOCIAL RESPONSIBILITY CSR EXPENDITURE DEDUCTION OF 5,13,36,000/-, THE ASSESSING OFFICER NEITHER CARRIED OUT ANY ENQUIRY NOR DISCUSSED THE S AID ISSUE IN HIS ASSESSMENT ORDER DATED 29.01.2016. HE THEREFORE TAK ES INTO CONSIDERATION SEC.135 OF THE COMPANIES ACT 2013 R.W .S SEC. 37; AS AMENDED BY THE FINANCE ACT, 2014 INSERTING EXPLANTI ON-2 THAT CSR SHALL NOT BE DEEMED TO BE AN EXPENDITURE INCURRED W HOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS OR PROFESSI ON, THE EXPLANATORY NOTES IN CIRCULAR NO.1 OF 2015 DATED 21.01.2015 AS WELL AS VARIOUS JUDICIAL PRECEDENTS DEALING WITH THE SAID AMENDMENT ALONGWITH SEC. 263(1) EXPLANTON-2 INCORPORATED W.E.F. 01.06.2015 T O HOLD THAT THE ASSESSING OFFICER NEEDS TO EXAMINE THE ASSESSEES C LAIM OF CSR AFRESH AFTER CONDUCTING NECESSARY INVESTIGATION AND FOLLOWED BY VERIFICATION OF FACTS. 3. MR. BHATTACHARYA FIRST OF ALL INVITED OUR ATTENT ION TO THE ASSESSEES PETITION DATED 12.12.2019 SEEKING TO ADMIT ITS ADDI TIONAL GROUND THAT THE CIT HAS NOT APPRECIATED THE FACT OF IT BEING A GOVERNME NT OF INDIA ENTERPRISE SUPPOSED TO FOLLOW THE CORRESPONDING CSR GUIDELIN ES ISSUED PSUS. THE REVENUES CASE IS THAT THE ASSESSEE IS NOT ENTITLED TO RAISE ITS INSTANT ADDITIONAL SUBSTANTIVE GROUND AT THIS BELATED STAGE AND MORE SO, WHAT THE RELEVANT FACTS DO NOT PART OF RECORD. IT FAILS TO D ISPUTE THAT THE ASSESSEES MAIN SUBSTANTIVE GROUND(S) ALREADY RAISE THE VERY ISSUE OF ALLOWABILITY OF CSR EXPENSES BORNE BY A PSU CONTROLLED BY THE GOVERNMEN T OF INDIA SEC. 37 OF THE ACT SINCE INCURRED WHOLLY AND EXCLUSIVELY FOR T HE PURPOSE OF BUSINESS. ITA NO.900/KOL/2018 A.Y. 201 3-14 HINDUSTAN COPPER LTD. VS. CIT-LTU-1, KO L. PAGE 3 HON'BLE APEX COURTS LANDMARK DECISION IN NATIONAL THERMAL POWER CORPORATION. LTD. VS. COMMISSIONER OF INCOME-TAX (1998) 229 ITR 383 (SC) CONSIDERED IN TRIBUNALS SPECIAL BENCH ALL CARGO GLOBAL LOGISTICS LTD. VS. DCIT (2012) 137 ITD 26 (MUM) HOLDS THAT WE CAN VERY WELL ENTERTAIN A PURE QUESTION OF LAW BY WAY OF ADDITIONAL GROUND IN ORDE R TO DETERMINE THE CORRECT TAX LIABILITY PROVIDED RELEVANT FACTS FORM PART OF RECORD. WE TAKE INTO ACCOUNT THE SAME AND OBSERVE THAT THE ASSESSEES ADDITIONAL GROUND IS IN THE NATURE OF AN ADDITIONAL PLEA ONLY. WE THUS ADMIT THE SAME GOI NG BY THE ABOVE STATED FACTUAL AND LEGAL BACKDROPS. 4. COMING TO MERITS, WE NOTICE THAT THE PCITS REVI SION DIRECTIONS UNDER CHALLENGE HAVE PLACED RELIANCE ON THE STATUTORY AME NDMENT IN SEC. 37 BY WAY OF EXPLANATION-2 INSERTED BY THE FINANCE (NO.2) ACT ,2014 W.E.F. 01.04.2015 THAT SUCH A CLAIM SHALL NOT BE DEEMED TO BE AN EXPE NDITURE INCURRED FOR THE PURPOSE OF THE BUSINESS OR PROFESSION. WE REITERATE THAT WE ARE IN ASSESSMENT YEAR 2013-14 WITH THE RELEVANT FINANCIAL YEAR 2012- 13 ONLY. THIS TRIBUNALS CO- ORDINATE BENCHS DECISION IN ITA NO.99/BLPR/2012 IN ASSISTANT COMMISSIONER OF INCOME TAX CIRCLE-1(1), BILASPUR VS . JINDAL POWER LIMITED DECIDED ON 23.06.2016 HOLDS THAT THE ABOVE STATED E XPLANATION TO SEC. 37 OF THE ACT CARRIES PROSPECTIVE OPERATION ONLY. COUPLED WITH THIS, THIS TRIBUNALS YET ANOTHER DECISION IN M/S HLL LIFECARE LIMITED VS. THE ASSTT. COMMISSIONE R OF INCOME TAX, CRICLE-1(1),TRIVANDRUM IN ITA NO. 123/COCH/2017 DECIDED ON 11.06.2018 TAKES INTO CONSIDERATION AN IDENTICAL CL AIM OF CORPORATE SOCIAL RESPONSIBILITY EXPENSES INCURRED BY A PUBLIC SECTOR ENTERPRISE AS PER GOVERNMENT OF INDIAS DIRECTION NOT DISALLOWED IN C ASE OF REGULAR ASSESSMENT TO BE NOT RESULTING ERROR CAUSING PREJUDICE TO INTE REST OF THE REVENUE AS UNDER:- 3. THE BRIEF FACTS OF THE CASE ARE AS FOLLOWS: THE ASSESSEE IS A COMPANY. FOR THE ASSESSMENT YEAR 2012-2013, RETURN WAS FILED DECLARING AN INCOME OF RS.29,26,21 ,280, WHICH WAS SUBSEQUENTLY REVISED TO RS.22,88,55,880. THE ASSESS MENT U/S 143(3) OF THE I.T. ACT WAS COMPLETED ON 19.03.2015 DETERMI NING A TOTAL INCOME OF RS.23,88,46,210. IN THE ASSESSMENT COMPLETED U/S 143(3) OF THE I.T. ITA NO.900/KOL/2018 A.Y. 201 3-14 HINDUSTAN COPPER LTD. VS. CIT-LTU-1, KO L. PAGE 4 ACT, THE ASSESSING OFFICER HAD ALLOWED DEDUCTION OF CORPORATE SOCIAL RESPONSIBILITY (CSR) EXPENSES TO THE TUNE OF RS.44. 69 LAKH. 4. THE PRINCIPAL COMMISSIONER OF INCOME-TAX ISSUED NOTICE U/S 263 OF THE I.T. ACT, SINCE ACCORDING TO HIM, THE A.O. ALLOWED DEDUC TION OF CSR EXPENSES WITHOUT PROPERLY VERIFYING THE SAME. ACCORDING TO T HE COMMISSIONER, AS PER EXPLANATION 2 TO SECTION 37(1) OF THE I.T. ACT, ANY EXPENDITURE INCURRED BY AN ASSESSEE ON ACTIVITIES RELATING TO CSR REFERRED TO IN SECTION 135 OF THE COMPANIES ACT, 2013 SHALL NOT BE ALLOWED AS AN EXPE NDITURE INCURRED BY THE ASSESSEE FOR THE PURPOSE OF BUSINESS OR PROFESSION. 5. TO THE NOTICE ISSUED U/S 263 OF THE I.T. ACT, TH E ASSESSEE FILED ITS OBJECTIONS. IT WAS SUBMITTED BY THE ASSESSEE THAT T HE CSR EXPENSES HAD TO BE NECESSARILY INCURRED ON ACCOUNT OF GOVERNMENT GU IDELINES DATED 09.04.2010 AND THE SAME IS TO BE TREATED AS AN EXPE NDITURE WHOLLY AND EXCLUSIVELY FOR THE PURPOSE OF BUSINESS U/S 37 OF T HE I.T. ACT. THE ASSESSEE HAD ALSO RELIED ON THE JUDGMENT OF THE HONBLE JURI SDICTIONAL HIGH COURT IN THE CASE OF TRAVANCORE TITANIUM PRODUCTS LTD. ( 187 TAXMAN 81 ) FOR THE PROPOSITION THAT WHEN GOVERNMENT ISSUES ORDERS, THE ASSESSEE BEING A GOVERNMENT COMPANY, WAS DUTY BOUND TO COMPLY WITH S UCH ORDERS. IT WAS FURTHER EXPLAINED THAT EXPLANATION 2 TO SECTION 37( 1) OF THE I.T. ACT WAS APPLICABLE ONLY FOR AND FROM ASSESSMENT YEAR 2015-2 016 AND FOR THE RELEVANT ASSESSMENT YEAR, THE SAID EXPLANATION DOES NOT HAVE ANY APPLICATION. THE ASSESSEE ALSO RELIED ON THE ORDER OF THE RAIPUR BEN CH OF THE TRIBUNAL IN THE CASE OF ACIT V. JINDAL POWER LIMITED [ ITA NO.99/BLPR/2012 ORDER DATED 23RD JUNE, 2016]. 6. THE CIT, HOWEVER, REJECTED THE CONTENTIONS / OBJ ECTIONS OF THE ASSESSEE AND PASSED ORDER U/S 263 OF THE I.T. ACT ON 09.02.2 017. THE CIT SET ASIDE THE ASSESSMENT ORDER U/S 143(3) FOR FRESH EXAMINATION O N THE LIMITED ISSUE OF DEDUCTION OF RS.44.69 LAKH CLAIMED AS CSR EXPENSES. 7. AGGRIEVED BY THE ORDER OF THE CIT PASSED U/S 263 OF THE I.T. ACT, THE ASSESSEE HAS FILED THE PRESENT APPEAL BEFORE THE TR IBUNAL. THE LEARNED AR HAS FILED PAPER BOOK COMPRISING OF 55 PAGES INCLUDI NG THE LEDGER ACCOUNT. COPY OF THE CSR EXPENDITURE, COPY OF THE GUIDELINES ISSUED BY THE CENTRAL GOVERNMENT AND JUDICIAL PRONOUNCEMENTS RELIED ON BY THE ASSESSEE BEFORE THE LOWER AUTHORITIES. 8. THE LEARNED DEPARTMENTAL REPRESENTATIVE, ON THE OTHER HAND, SUPPORTED THE ORDER OF THE CIT PASSED U/S 263 OF THE I.T. ACT . 9. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE MATERIAL ON RECORD. THE ASSESSEE IS A GOVERNMENT OF INDIA UNDERTAKING, WORKING UNDER THE MINISTRY OF HEALTH AND FAMILY WELFARE. THE GOVERNME NT OF INDIA HAD ISSUED CERTAIN GUIDELINES DATED 09.04.2010 TO ALL C ENTRAL PUBLIC SECTOR ENTERPRISES ON CSR. THE GUIDELINES ISSUED BY THE CE NTRAL GOVERNMENT DATED 09.04.2010, IS PLACED AT PAGES 9 TO 27 OF THE PAPER BOOK FILED BY THE ASSESSEE. AS PER THE GUIDELINES AS INDICATED UN DER 5. FUNDING , ALL PSUS SHOULD MANDATORILY SPEND A PERCENTAGE OF NET P ROFIT FOR CSR ITA NO.900/KOL/2018 A.Y. 201 3-14 HINDUSTAN COPPER LTD. VS. CIT-LTU-1, KO L. PAGE 5 ACTIVITIES. THE CSR EXPENSES THAT HAS BEEN INCURRED BY THE ASSESSEE IS BASED ON THE SPECIFIC DIRECTIONS OF THE GOVERNMENT OF INDIA AND THE A.O. IN THE ASSESSMENT ORDER PASSED U/S 143(3) DATED 19. 03.2015 HAD ALLOWED THE CSR EXPENDITURE. 9.1 THE FOLLOWING EXPLANATION WAS INTRODUCED IN THE I.T. ACT BY FINANCE ACT, 2014: EXPLANATION 2 . FOR THE REMOVAL OF DOUBTS, IT IS HEREBY DECLARE D THAT FOR THE PURPOSES OF SUB-SECTION (1), ANY EXPENDITUR E INCURRED BY AN ASSESSEE ON THE ACTIVITIES RELATING TO CORPORATE SO CIAL RESPONSIBILITY REFERRED TO IN SECTION 135 OF THE COMPANIES ACT, 20 13 (18 OF 2013) SHALL NOT BE DEEMED TO BE AN EXPENDITURE INCURRED B Y THE ASSESSEE FOR THE PURPOSES OF THE BUSINESS OR PROFESSION 9.2 THE NOTES ON CLAUSES OF FINANCE BILL, 2014 ST ATES AS UNDER: CLAUSE 13 OF THE BILL SEEKS TO AMEND SECTION 37 OF THE INCOME-TAX ACT RELATING TO GENERAL EXPENDITURE. THE EXISTING PROV ISIONS CONTAINED IN SUB-SECTION (1) OF THE AFORESAID SECTION PROVIDE TH AT ANY EXPENDITURE (NOT BEING EXPENDITURE OF THE NATURE DESCRIBED IN S ECTIONS 30 TO 36 AND NOT BEING IN THE NATURE OF CAPITAL EXPENDITURE OR P ERSONAL EXPENSES OF THE ASSESSEE), LAID OUT OR EXPENDED WHOLLY AND EXCL USIVELY FOR THE PURPOSES OF THE BUSINESS OR PROFESSION SHALL BE ALL OWED IN COMPUTING THE INCOME CHARGEABLE UNDER THE HEAD PROFITS AND G AINS OF BUSINESS OR PROFESSION. IT IS PROPOSED TO INSERT A NEW EXPLANATION IN SUBSE CTION (1) OF SECTION 37 SO AS TO CLARIFY THAT FOR THE PURPOSE OF SUB-SECTION (1) OF THE SAID SECTION, ANY EXPENDITURE INCURRED BY AN ASSESSEE ON THE ACTIVITI ES RELATING TO CORPORATE SOCIAL RESPONSIBILITY REFERRED TO IN SECTION 135 OF THE COMPANIES ACT, 2013 SHALL NOT BE DEEMED TO BE AN EXPENDITURE INCURRED B Y THE ASSESSEE FOR THE PURPOSES OF THE BUSINESS OR PROFESSION. THIS AMEND MENT WILL TAKE EFFECT FROM 1ST APRIL, 2015 AND WILL, ACCORDINGLY, APPLY IN REL ATION TO THE ASSESSMENT YEAR 2015-16 AND SUBSEQUENT YEARS. (EMPHASIS SUPPLIED) 9.3 THE ITAT, RAIPUR BENCH IN THE CASE OF JINDAL POWER LTD (SUPRA) HAD HELD THAT EXPLANATION 2 TO SECTION 37(1) OF THE I.T. ACT IS PROSPECTIVE. THE RELEVANT FINDINGS OF THE TRIBUNAL READS AS FOLLOWS:- THIS DISABLING PROVISION, AS SET OUT IN EXPLANATIO N 2 TO SECTION 37(1), REFERS ONLY TO SUCH CORPORATE SOCIAL RESPONSIBILITY EXPENSES AS UNDER SECTION 135 OF THE COMPANIES ACT, 2013, AND, AS SUC H, IT CANNOT HAVE ANY APPLICATION FOR THE PERIOD NOT COVERED BY THIS STATUTORY PROVISION WHICH ITSELF CAME INTO EXISTENCE IN 2013. EXPLANATI ON 2 TO SECTION 37(1) IS, THEREFORE, INHERENTLY INCAPABLE OF RETROSPECTIV E APPLICATION ANY FURTHER. 9.4 IT WAS SPECIFICALLY MENTIONED IN THE NOTES ON C LAUSES EXPLAINING THE FINANCE BILL 2014, THAT THE EXPLANATION 2 IS APPLICABLE ONLY FROM THE ASSESSMENT YEAR 2015-2016. THIS ALSO IMPLIES THAT C SR EXPENDITURE INCURRED ITA NO.900/KOL/2018 A.Y. 201 3-14 HINDUSTAN COPPER LTD. VS. CIT-LTU-1, KO L. PAGE 6 BY THE ASSESSEE UPTO THE ASSESSMENT YEAR 2014-2015 IS AN ALLOWABLE BUSINESS EXPENDITURE U/S 37 OF THE I.T. ACT. 9.5 THE CSR EXPENSES HAS BEEN INCURRED AS PER THE D IRECTIONS OF GOVERNMENT OF INDIA. THE HONBLE KERALA HIGH COURT IN THE CASE OF TRAVANCORE TITANIUM PRODUCTS LTD. (SUPRA) HAD HELD THAT A GOVERNMENT UNDERTAKING IS DUTY BOUND TO COMPLY WITH GOVERNMENT AL ORDERS. THE RELEVANT FINDINGS OF THE HONBLE JURISDICTIONAL HIGH COURT R EADS AS FOLLOWS:- BEING A COMPANY UNDER THE CONTROL OF THE GOVERNMEN T, IT IS BOUND TO COMPLY WITH ALL THE GOVERNMENT ORDERS AND THE BOARD OF DIRECTORS ITSELF IS CONSTITUTED WITH THE GOVERNMENT SECRETARIES AND OTHER NOMINEES AS MEMBERS. THEREFORE, THE CLAIM OF DEDUCTION HAS TO BE CONSIDE RED WITH REFERENCE TO THE PECULIAR CIRCUMSTANCES OF THE COMPANY WHICH HAS NO DISCRETION IN REGARD TO THE PAYMENT OF THE SERVICE CHARGES TO THE GOVERNMENT AS IT IS BOUND TO COMPLY WITH THE GOVERNMENT ORDERS. SO M UCH SO, WE ARE OF THE VIEW THAT THE PARAMETERS APPLICABLE IN THE CASE OF A PRIVATE COMPANY THAT TOO WITH RESPECT TO THE CLAIM FOR BUSI NESS EXPENDITURE, ARE EXACTLY NOT APPLICABLE IN THE CASE OF PUBLIC SE CTOR COMPANY WHETHER IT IS UNDER THE CONTROL OF THE STATE GOVERN MENT OR CENTRAL GOVERNMENT. IN FACT, MANY PUBLIC SECTOR COMPANIES ARE NOT FORME D JUST TO MAKE PROFIT ALONE BUT ARE SUPPOSED TO ACHIEVE LARGER OBJ ECTIVES FOR THE SOCIETY AND THE STATE. BY MAKING PAYMENT OF SERVICE CHARGE, THE RESPONDENT COMPANY HAS DISCHARGED ONLY THE OBLIGATION UNDER GOVERNMENT ORD ERS. IT CANNOT CARRYON BUSINESS BY VIOLATING GOVERNMENT ORDERS AND REMAIN AS A DEFAULTER TO THE GOVERNMENT. 9.6 THE ITAT MUMBAI BENCH IN THE CASE OF HINDUSTAN PETROLEUM CORPORATION LTD. (96 ITD 186) HAD HELD CSR EXPENDITURE INCURRED BY GOVERNMENT UNDERTAKING IS AN ALLOWABLE DEDUCTION. THE RELEVANT FINDING OF THE ITAT MUMBAI BENCHES READS AS FOLLOWS:- EXPENDITURE INCURRED BY ASSESSEE, A COMPANY OWNED BY THE GOVERNMENT OF INDIA AND WORKING UNDER ITS CONTROL A ND DIRECTIONS, TOWARDS IMPLEMENTATION OF 20 POINT PROG RAMMEE AS PER SPECIFIC DIRECTIONS OF THE GOVERNMENT THOUGH VO LUNTARY IN NATURE AND NOT FORCED BY ANY STATUTORY OBLIGATION, IS ALLOWABLE AS BUSINESS EXPENDITURE. MERELY BECAUSE AN EXPENDITURE IS IN THE NATURE OF D ONATION, IT DOES NOT CEASE TO BE AN EXPENDITURE DEDUCTIBLE UNDE R S. 37(1). 9.7 THE COMMISSIONER OF INCOME TAX HAD MENTIONED IN HIS ORDER THAT ' THE APEX COURT (313 ITR 334 SC) CIT VS MADRAS REFINERIE S LTD., WHILE ITA NO.900/KOL/2018 A.Y. 201 3-14 HINDUSTAN COPPER LTD. VS. CIT-LTU-1, KO L. PAGE 7 HEARING THE ALLOWABILITY OF CSR EXPENSES OBSERVED T HAT NEITHER THE HIGH COURT NOR THE TRIBUNAL CONCERNED HAD GIVEN SPECIFIC FINDING TO THE EFFECT THAT THE SAID CSR EXPENDITURE IS ALLOWABLE AS BUSIN ESS EXPENDITURE '. IN THE ABOVE MENTIONED CASE, THE APEX COURT HAS NOT GI VEN ANY DECISION ON MERITS OF THE CASE. IT HAD ONLY GIVEN AN OBSERVATIO N AND REMITTED THE ISSUE BACK TO THE TRIBUNAL TO GIVE SPECIFIC FINDING TO TH E EFFECT THAT THE SAID CSR EXPENDITURE IS ALLOWABLE AS BUSINESS EXPENDITURE. 9.8 SINCE, THE ASSESSEE HAD INCURRED CSR EXPENSES T O COMPLY WITH THE DIRECTIONS OF GOVT. OF INDIA, FOLLOWING THE ABOVE O BSERVATIONS MADE BY HIGH COURT OF KERALA AND ITAT, MUMBAI BENCH, THE EXPENDI TURE INCURRED IS INCIDENTAL TO THE ASSESSEES BUSINESS AND OUGHT TO BE ALLOWED AS DEDUCTION U/S 37 OF THE I.T. ACT. 9.9 THEREFORE, THE A.O. HAD TAKEN A POSSIBLE VIEW A ND THE ASSESSMENT ORDER CANNOT BE STATED TO BE ERRONEOUS OR PREJUDICIAL TO THE INTEREST OF THE REVENUE, WARRANTING INTERFERENCE U/S 263 OF THE I.T. ACT. TH EREFORE, WE SET ASIDE THE IMPUGNED ORDER OF THE CIT PASSED U/S 263 OF THE I.T . ACT. IT IS ORDERED ACCORDINGLY. 5. LEARNED CIT-DR AT THIS STAGE SOUGHT TO EMPHASIZE ON THE PCITS FINDINGS THAT NEITHER THERE WAS AN ENQUIRY NOR ANY DISCUSSION IN THE ASSESSMENT RECORDS ON THE ISSUE OF CSR CLAIM OF 513,36,000/- IN ISSUE AND THEREFORE, THIS REGULAR ASSESSMENT HAS BEEN RIGHTLY REVISED U/S. 263 OF THE ACT. WE FIND NO SUBSTANCE IN REVENUES INSTANT LAST ARGU MENT AS WELL. THE FACT REMAINS THAT THIS ASSESSEE HAS ADMITTEDLY INCURRED ITS CORPORATE SOCIAL RESPONSIBILITY EXPENDITURE AS PER THE GOVERNMENT OF INDIAS GUIDELINES ONLY. IT HAS BEEN FURTHER SUBJECTED TO STATUTORY AUDITS AS W ELL QUA ALL THE EXPENSES INCURRED FROM TIME TO TIME. THE QUESTION AS TO WHET HER THE RELEVANT ASSESSMENT ORDER MUST EXPRESSLY DISCUSS THE ISSUES IN QUESTION OR NOT SO AS TO ATTRACT SEC, 263 REVISION PROCEEDINGS STANDS SET TLED LONG BACK IN COMMISSIONER OF INCOME TAX VS. GABRIAL INDIA LTD. (1993) 203 ITR 108 (BOM) THAT MERE NON-DISCUSSION ON AN ISSUE IN THE ASSESSM ENT ORDER DOES NOT RENDER IT AN ERRONEOUS CAUSING PREJUDICE TO THE INT EREST OF THE REVENUE. HON'BLE APEX COURTS LANDMARK DECISIONS IN MALABAR INDUSTRIAL CO. LTD. V. COMMISSIONER OF INCOME TAX (2000) 243 ITR 83 (SC) AND COMMISSIONER OF INCOME TAX VS. MAX INDIA (2007) 295 ITR 282 (SC) ALSO HOLD THAT BEFORE AN ASSESSMENT IS SOUGHT TO BE REVISED AS ERRONEOUS CAU SING PREJUDICIAL TO THE ITA NO.900/KOL/2018 A.Y. 201 3-14 HINDUSTAN COPPER LTD. VS. CIT-LTU-1, KO L. PAGE 8 INTEREST OF THE REVENUE, THESE TWIN CONDITIONS MUST EXIST SIMULTANEOUSLY. WE CONCLUDE IN VIEW OF ABOVE STATED FACTUAL AND LEGAL BACKDROP THAT EVEN IF IT IS HELD THAT THE ASSESSING OFFICER HAD ERRED IN NOT CA RRYING OUT THE NECESSARY ENQUIRY / FACTUAL VERIFICATION ON THE ASSESSEES CL AIM OF ITS CSR, THE SAME COULD NOT HAVE CAUSED ANY PREJUDICE INTEREST OF THE REVENUE IN CASE OF A PUBLIC SECTOR UNDERTAKING BOUND BY THE GOVERNMENT O F INDIAS DIRECTIONS ISSUED ON THE SUBJECT. MORE PARTICULARLY BEFORE THE INSERTION OF EXPLANATION-2 IN SEC. 37 OF THE ACT IN ASSESSMENT YEAR 2013-14 SI NCE THE AMENDED LEGAL POSITION CARRIES PROSPECTIVE EFFECT ONLY. WE THUS C ONCLUDE THAT THE CITS ASSUMPTION OF REVISION JURISDICTION IN THESE FACTS AND CIRCUMSTANCES IS NOT SUSTAINABLE. THE SAME STANDS REVERSED. WE ORDER ACC ORDINGLY. THE ASSESSING OFFICERS REGULAR ASSESSMENT DATED 29.01.2016 IS RE STORED AS A NECESSARY COROLLARY. 6. THIS ASSESSEES APPEAL IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT 29 /01/2020 SD/- SD/- ( &) (( &) ( A.L.SAINI) (S.S.GODARA) (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) KOLKATA, *DKP SR.P.S )- 29 / 01 /20 20 / COPY OF ORDER FORWARDED TO:- 1. /APPELLANT-HINDUSTAN COPPER LTD., TAMRA BHAWAN, 1,A SHUTOSH CHOUDHURY AVENUE, KOLKAT A-19 2. /RESPONDENT-CIT-LTU-1, AAYAKAR BHAWAN, POORVA, 110, SHANTI PALLY KOLKATA-107 3. 4 5 / CONCERNED CIT KOLKATA 4. 5- / CIT (A) KOLKATA 5. 8 ((4, 4, / DR, ITAT, KOLKATA 6. = / GUARD FILE. BY ORDER/ , /TRUE COPY/ 4,