MOIL LIMITED EARLIER KNOWN AS MANGANESE ORE INDIA LIMITED, 1A, KATOL ROAD, P.O. BOX NO.34, NAGPUR 440013 Vs. THE COMMISSIONER OF INCOME TAX, NAGPUR. SHRIB

JUDGEMENT

(1.) The Income Tax Appeal is admitted on the following substantial question of law :

(2.) Few facts giving rise to the Income Tax Appeal are stated thus :

(3.) Shri Dewani, the learned Counsel for the appellant submitted that the Commissioner of Income Tax was not justified in exercising the jurisdiction under Sec. 263 of the Act by holding that the Assessing Officer had not made any enquiry regarding the allowability of the expenses towards the Corporate Social Responsibility claim. It is submitted by taking this Court through the notice issued by the Assistant Commissioner of Income Tax under Sec. 142 (1) of the Act and specially item no.9 therein as also the reply filed by the appellant assessee to the said item that the Assessing Officer was satisfied about the explanation tendered by the assessee and hence, the Assessing Officer had allowed the claim in respect of Corporate Social Responsibility. It is submitted that during the previous assessment years similar claims made by the assessee were allowed by the Assessing Officer and there was no interference with the assessment orders during the previous years. It is submitted that similar claim was granted in respect of Corporate Social Responsibility during the previous years and the Commissioner of Income Tax has wrongly invoked the jurisdiction under Sec. 263 of the Act though the Assessing Officer had applied his mind to the explanation tendered by the assessee and while allowing the said claim had refused to allow the others after recording reasons for doing so. The learned Counsel took this Court though the judgments of the Bombay High Court in the case of Commissioner of Income Tax Vs. Fine Jewellery (India) Ltd., reported in (2015) 372 ITR 303 (Bom.) and Commissioner of Income Tax Vs. Nirav Modi, reported in (2016) 138 DTR 81 (Bom.) to submit that if a query is raised during the assessment proceedings and if the assessee responds to the said query, merely because the said aspect is not dealt with in the assessment order, would not lead to a conclusion that the Assessing Officer had not applied his mind to the response of the assessee. It is stated that while holding so, the Bombay High Court has relied on an earlier judgment of the Bombay High Court in the case of Idea Cellular Ltd Vs. Deputy Commissioner of Income Tax and others, reported in (2008) 301 ITR 407 (Bom.). It is submitted that the assessee Company is a Government of India undertaking and the Government has a control over the expenses of the undertaking of the assessee. It is submitted that some incentives like placing the Company in the category of mini Navratna or Navratna are granted if Corporate Social Expenses are made to the extent of at least 2% to 3% of the total income. It is submitted that it is absolutely necessary for the Companies like the assessee Company to expend towards Corporate Social Responsibility. It is submitted that in the circumstances of the case, the Commissioner of Income Tax could not have invoked the jurisdiction under Sec. 263 of the Act merely because the Assessing Officer has not formally recorded in the order of assessment that the claim made by the assessee towards the Corporate Social Responsibility is allowed.