SHRIRAM FINANCE LIMITED,CHENNAI V. PCIT, CHENNAI

ITA 1640/CHNY/2024

AI Insights

The case revolves around an appeal by Shriram Finance Ltd. against the order of the Principal Commissioner of Income Tax-3, Chennai, which revised the assessment order concerning the claim of deduction under section 80G related to CSR expenditure. The Assessing Officer had initially allowed the deduction, but the PCIT later directed its disallowance, citing a lack of necessary enquiries and improper application of law by the AO. The Tribunal, however, found that the AO had indeed conducted the necessary enquiries and applied the law correctly, referencing several precedents where similar deductions were allowed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 472189 (ITAT-CHENNAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 03-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2018-2019
• Other Referred Cases: American Express (India) P. Ltd. v PCIT, Goldman Sachs Services Pvt Ltd, Power Mech Ltd
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NILAY BARAN SOM
• Assessee Lawyers: R. SIVARAMAN
• Keywords: Assessment record
• Section: 142(1); 143(2); 263; 80G

Judgement Text

" आयकर अपीलीय अिधकरण, ‘ए’ \u0011ा यपीठ, चे\u0016ई। IN THE INCOME TAX APPELLATE TRIBUNAL ‘A’ BENCH: CHENNAI \u0019ी एबी टी. वक , \u0011ा ियक सद! एवं \u0019ी जगदीश, लेखा सद! क े सम( BEFORE SHRI ABY T. VARKEY, JUDICIAL MEMBER AND SHRI JAGADISH, ACCOUNTANT MEMBER आयकर अपील सं./ITA No.1640/Chny/2024 िनधा9रण वष9 /Assessment Year: 2018-19 Shriram Finance Ltd., (formerly known as Shriram Transport Finance Company Ltd.,) Sri Towers, Plot No.14A, South Phase, Industrial Estate, Guindy,Chennai-600 032. Vs. The Principal Commissioner of Income Tax-3, Chennai. [PAN: AAACS 7018R] (अपीलाथ\u0007/Appellant) (\b यथ\u0007/Respondent) अपीलाथ की ओर से/ Appellant by : Shri R. Sivaraman, Advocate HIथ की ओर से /Respondent by : Shri Nilay Baran Som, CIT सुनवाई की तारीख/Date of Hearing : 08.10.2024 घोषणा की तारीख /Date of Pronouncement : 03.01.2025 आदेश / O R D E R PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2018-19 arises out of the order of Learned Principal Commissioner of Income Tax-3, Chennai [hereinafter “PCIT”] dated 31.03.2024. ITA No.1644/Chny/2024 :- 2 -: 2. The effective ground of appeal in this appeal of assessee is against the order of Ld. PCIT assuming jurisdiction under section 263 and revising the assessment order by remitting back the issue of claim of deduction under section 80G to the file of A.O with a direction to disallow the claim of deduction u/s. 80G of the Act relating to the CSR expenditure . 3. The assessee-company has filed its return of income on 04.10.2018 declaring total income of Rs.26,21,68,06,720/-, which was further revised to Rs.26,22,02,91,770/- on 29.03.2019. The A.O in the order passed u/s.143(3) r.w.s 144B of the Act assessed the total income of Rs.27,26,70,79,707/- after considering eight issues for which case was selected for scrutiny. The Ld. PCIT called the assessment record and found that the assessee has claimed 50% deduction of Rs.6,19,24,027/- u/s. 80G of the Act on the payment to trusts as part of CSR expenses and A.O has allowed the deduction. The Ld PCIT held that there is failure on the basis of assessing officer to cause necessary enquiries and also to apply law properly in respect of the said claim, therefore the order passed by the AO is erroneous and prejudicial to the interest of revenue and directed A.O to disallow the claim of deduction u/s. 80G of the Act. ITA No.1644/Chny/2024 :- 3 -: 4. The Ld. Authorized Representative (A.R) of the assessee challenged the assumption of jurisdiction u/s. 263 of the Act as the issue has already been examined by the assessing officer during assessment and the Honorable Tribunals have consistently held that 80G deduction on such donations are allowed. The Ld AR took us through the notices issued u/s. 143(2) and 142(1) of the Act, where A.O has called for details of deduction from total income under chapter VIA and assessee has replied that only deduction claimed under chapter VIA was u/s 80G of the Act of Rs.6,19,24,027 and submitted the receipts of donation on 09.01.2020, 10.01.2020 & 24.01.2020. The Ld AR therefore, submitted that the issue has already been examined by the A.O therefore the Ld. PCIT does not have jurisdiction to revise u/s. 263 of the Act. The Ld. AR submitted that the Ld. PCIT, while referring to Explanation-2 to section 263 of the Act has not pointed as to what enquiry or verification, A.O has not conducted. The Ld. AR on holding the non application of law properly by the A.O submitted that the Honorable ITAT has consistently held, deduction u/s. 80G on such donations are to be allowed and submitted case laws. The Ld AR also relied on the order of ITAT, Delhi Bench in the case of American Express (India) P. Ltd. 166 taxmann.com 91 (Delhi-Trib), wherein ITA No.1644/Chny/2024 :- 4 -: revision order section 263 order issued on the same issue, has been quashed. 5. The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities. 6. We have heard the rival submissions, and perused the materials available on record. The Ld PCIT has held the assessment order passed by AO erroneous and prejudicial to the interest of revenue as A.O has not caused necessary enquiry and also not applied the law properly on the issue of claim of deduction under section 80G of the Act. We find that the A.O in the notices issued under section 143(2) and 142(1) of the Act has called for the information and allowed the claim after verification. The Ld. PCIT has not made out a case as to what enquiry was not conducted by the AO in order to invoke Explanation 2 to section 263 of the Act. As regard to Ld. PCIT finding that A.O has not applied the law properly on the claim of deduction under 80G, we find that ITAT, Banglore Bench in the case of M/s Goldman Sachs Services Pvt Ltd in IT(TP)A No.2355/Bang/2019 dated 15.06.2020, ITAT Hyderabad Bench in the case of Power Mech Ltd 156 Taxmann.com 575 (Hyderabad-Trib.) and in several other cases, Tribunals have held such claim allowable. The ITAT Delhi ITA No.1644/Chny/2024 :- 5 -: Bench in the case of American Express (India) P. Ltd v PCIT reported in 166 taxmann.com 919 (Delhi-Trib) has quashed the similar revision order passed by PCIT under section 263 of the Act. We therefore, hold the order passed by Ld. PCIT under section 263 of the Act without jurisdiction and quash it accordingly. In view of the above, the appeal filed by the assessee is allowed. 7. In the result, both the appeal filed by the assessee is allowed. Order pronounced on 3rd January, 2025. Sd/- Sd/- (एबी टी. वक ) (ABY. T. Varkey) \u0011ाियक सद! / Judicial Member (जगदीश) (Jagadish) लेखा सद! /Accountant Member चे\u0010नई/Chennai, \u0013दनांक/Dated: 3rd January, 2025. EDN/- आदेश क\u0016 \bितिल\u0019प अ\u001aे\u0019षत/Copy to: 1. अपीलाथ\b/Appellant 2. थ\b/Respondent 3. आयकर आयु\u0010/CIT, Chennai 4. िवभागीय ितिनिध/DR 5. गाड\u0019 फाईल/GF "