Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2020 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2020 (3) TMI 1253 - AT - Income TaxRevision u/s 263 - assessment under limited scrutiny - as argued CIT proceeded to invoke revisional power u/s.263 only on the basis of audit objection - HELD THAT:- From the copy of the notice by the AO u/s. 142(1) it is ample clear that the case of the assessee was selected for Limited Scrutiny only on two issues i.e. higher turnover report in service tax return compared to ITR and mismatch in amount paid to related persons u/s.40A(2)(b) reported in audit report and ITR. Violation of principles of natural justice - We are not in agreement with the contention of ld A.R. that the assessee was not given due opportunity of hearing by ld. Pr. CIT as the assessee was allowed to file his replies twice personally or electronically alongwith relevant documents and explanation to the issues agitated by Pr. CIT in the notice u/.s.263 - Merely because during the intervening period, some public holidays are falling, it cannot be alleged that Ld. Pr. CIT has violated principles of natural justice. Assessee has been given due opportunity of hearing by the revisional authority. Therefore, we decline to accept the contention of assessee was not allowed due opportunity of hearing to explain his case before ld. Pr. CIT. Ante dated order - Merely because the AO received the copy of the order on 1.5.2019 and the assessee received the copy of order through its AR on 6.5.2019, it cannot be safely presumed that the order has been passed ante dated and same was not passed on 29.3.2019 i.e. on the date of mentioning in the impugned order. We are unable to see any evidence except service of notice in the second week of May, 2019, which could show and satisfy us that Pr. CIT has passed ante dated order. Therefore, we decline to accept this contention of ld A.R. that the order has been passed ante dated and thus, both the contentions and grounds agitated by the assessee are hereby dismissed. Sufficiency and adequacy of enquiry on the issues of ‘ Limited Scrutiny’ - AO issued notice u/s.143(2) and u/s.142(1) of the Act which were replied by the assessee - AO makes some inquiry on the issues picked up by him by way of issuing notices and taking on record replies, explanation and relevant documents submitted by the assessee in compliance to the said notice. Unable to find any deliberation in the assessment order regarding these issues which could show and satisfy us that the AO not only made sufficient and adequate enquiries on the issues for which the case was selected for limited scrutiny but also made deliberation by application of mind and thereafter adjudicated the issues by way of inserting deliberation in the assessment order. From a careful reading of the impugned order passed as observed that the assessee company had shown gross turnover /revenue from operation of ₹ 63,97,71,157/- for financial year 2013-14 but as per statement in 26AS, the assessee had shown ₹ 16,91,82,966/- from works contract bit it had disclosed its gross receipts in the profit and loss account only ₹ 15,69,31,397/- resulting that the gross receipts is understated by ₹ 1,22,51,569/- which should have been verified by the AO during scrutiny proceedings. AO by way of notice u/s.142(1) initiated enquiry on this issue but after filing reply of the assessee in compliance to the said notice, the AO as an adjudicator and investigator did not bother to deliberate this issue in the assessment order and in our humble opinion,until and unless inquiry started by the AO is terminated to a logical and plausible end, such kind of enquiry has to be held as inadequate and insufficient inquiry on the issues, which makes the assessment order as erroneous and prejudicial to the interest of the revenue. Referring to service tax return income credited to P&L account was understated to the tune of ₹ 16,91,91,234/- which were not enquired by the AO. Issue of brought forward unabsorbed depreciation and MAT credit was not under Limited Scrutiny, hence, the AO has not enquired into the matter while passing the assessment order. When the circumstances of the case are such so as to provoke an enquiry, it is his duty to make proper enquiry. Failure to make enquiry in such circumstances would make the assessment order erroneous and prejudicial to the interest of the revenue. we concur with the submissions of Ld. CIT-DR that it was a case of lack of inquiry and there was no application of mind by AO on the issues which formed subject matter of revisional jurisdiction u/s 263. Therefore, we do not find any illegality in the action of Ld. Pr. CIT in exercising the said jurisdiction. - Decided against assessee.
|