By K. B. Bhujle, Advocate
MOIL vs. CIT; 396 ITR 244 (Bom):
The assessee, a public sector undertaking
was involved in the business of extraction and sale of manganese ore, generation
of electricity and manufacturing and sale of EMV and ferro minerals. In the
course of the scrutiny assessment for the A. Y. 2009-10, the Assessing Officer
issued notice u/s. 142(1) of the Act,
1961, requiring details in respect of twenty items. According to item No. 9,
the Assessing Officer asked the assessee to give a detailed note of expenditure
for the corporate social responsibility along with the bifurcation of the
expenses under different heads. In pursuance of the notice, the assessee had given
the bifurcation of expenses under various heads towards the corporate social
responsibility claim. The Assessing Officer allowed certain claims without
making a specific reference to them in the assessment order and disallowed
certain claims after giving detailed reasons for the disallowance. The
Commissioner invoked the jurisdiction u/s. 263 of the Act after holding that
the Assessing Officer had passed the assessment order without making any
enquiry regarding the alowability of expenses claimed by the assessee under the
head “corporate social responsibility” and hence, the order was erroneous and
prejudicial to the interest of the Revenue and remanded the matter to the
Assessing Officer to redo the assessment in respect of the claim of the
assessee pertaining to the corporate social responsibility. The Tribunal
confirmed this order.
On appeal by the assessee, the Bombay High
Court reversed the decision of the Tribunal and held as under:
“i) The Assessing Officer
applied his mind to the claims made by the assessee and wherever the claims
were disallowable they have been discussed in that assessment order and there
was no discussion or reference in respect of the claims that were allowed. It
could not be said that merely because the Assessing Officer had not
specifically mentioned about the claim in respect of corporate social
responsibility, the Assessing Officer had passed the assessment order without
making any enquiry in respect of the allowability of the claim of corporate
social responsibility.
ii) The query pertaining to
corporate social responsibility was exhaustively answered and the assessee had
provided the data pertaining to the expenditure under each head of the claim in
respect of corporate social responsibility, in details. The Assessing Officer
was not expected to raise more queries, if he was satisfied about the
admissibility of the claim on the basis of the material and the details
supplied. The provisions of section 263 of the Act could not have been invoked
by the Commissioner.
iii) The orders of the
Commissioner of Income-tax and the ITAT are quashed and set aside.”
