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2014 (9) TMI 512 - AT - Income TaxValidity of revision u/s 263 – Held that:- An order cannot be termed as erroneous unless it is not in accordance with law - This section does not visualize a case of substitution of the judgment of the Commissioner for that of the Income-tax Officer, who passed the order unless the decision is held to be erroneous - If the Income-tax Officer had applied his mind while making an assessment and determines the income either by accepting the accounts or by making some estimate himself after making due enquiries, then the said assessment order cannot be termed as erroneous simply because, the Commissioner, on perusal of the records, may be of the opinion that the estimate made by the officer concerned was on the lower side - there must be some prima facie material on record to show that tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation a lesser tax than what was just has been imposed. CIT has initiated the revision proceedings mainly on the reasoning that the AO has failed to follow the procedure prescribed under Rule 8D of the I.T Rules - the revision proceeding is liable to be quashed, as the view entertained by CIT on the issue of disallowance u/s 14A is not in accordance with the law - the AO has examined the issue of disallowance to be made u/s 14A of the Act - the assessee had declared a dividend income and the net profit returned by it was 129.34 crores - the issue relating to invoking of the provisions of Rule 8D was specifically questioned by the AO and the assessee has given above reply - the AO has proceeded to compute the disallowance - the AO has examined the applicability of Rule 8D to the case of the assessee herein - the AO has examined the issue of disallowance to be made u/s 14A of the Act - the assessment order cannot be termed as erroneous and prejudicial to interests of revenue simply because the CIT is having a different view in this matter – Decided in favour of assessee.
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