2017 (12) TMI 122 - ITAT DELHI - Income Tax

Head Note / Extract:
Revision u/s 263 - understated income disclosed by the assessee - Held that:- Apart from issue of refund claimed by the assessee and mismatch of the income and the tax refund as per system of the Department, did not raise the issue of understated income as per gross receipts and net profit and interest from SBI in the show cause notice. Therefore, on such items the Pr. CIT is not permitted to invoke the jurisdiction under section 263 of the I.T. Act or to pass order. It may be noted here that the Pr. CIT without giving notice to the assessee has found that there is understated income disclosed by the assessee. It is well settled Law that assessment cannot be revised on ground which is not mentioned in the show cause notice. Further, when explanation of assessee has not been called for, there is no question of taking any adverse view against the assessee. Further, if Pr. CIT was of the view that contract income is understated, then, he himself should have conducted the enquiry into the matter at the revisional stage and should have called for the explanation of assessee and should have gone into the details and then pass some order. In such circumstances, he should not have restore the matter back to the file of the A.O. The decision relied upon by the Learned Counsel for the Assessee clearly support the submissions of the assessee. As regards the interest earned and TDS deducted by SBI, the Pr. CIT was of the view that this claim has been made against PAN of the Assessee-Firm. However, Learned Counsel for the Assessee referred to PB-14 which is Profit and Loss Account for assessment year under appeal, in which assessee did not make any such claim. Further, such issue was not raised in the show cause notice under section 263 of the I.T. Act. Therefore, such issue cannot be taken in adverse against the assessee in the impugned order under section 263 of the I.T. Act. Considering the totality of the facts and circumstances in the light of above discussion, we are of the view that the assessment order passed by the A.O. is in accordance with Law in which no infirmity have been pointed-out so as to invoke jurisdiction under section 263 - Decided in favour of assessee.