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2022 (6) TMI 726 - AT - Income TaxRevision u/s 263 by CIT - assessee had paid a sum towards electricity charges in cash which are dis-allowable u/s 40A(3) and AO did not examine this aspect at all during assessment proceedings - CIT further held that the explanation of the assessee that payment had to be made in cash since the cheque issued to the electricity company was dishonoured due to insufficient funds was found to be not acceptable because if the cash was available in the books of accounts, then the same could have been deposited in the bank before issuing the cheque - Secondly, Principal CIT observed that remuneration of Rs. 12,00,000/- was paid to partners of the firm - HELD THAT:- We note that the order passed by the assessing officer is a brief order and does not discuss in detail the various details called for and the explanation given by the assessee. The AO has accepted the returned income filed by the assessee. Though we note that though the AO had from time to time sought for various details from the assessee and also for certain matters in respect of which Principal CIT has made certain observations, the Ld. Assessing Officer had sought for details and analysed the issues, for instance one related to payment of remuneration to HUF, in respect of which there was an ongoing litigation in previous years, however we equally note that in respect of certain issues for instance the difference - in respect of receipts as compared to party -wise ledger accounts, there was an obvious omission on the part of the assessing officer in not carrying out the necessary reconciliation between total receipts under the head “Sales” with the party -wise accounts reflected as “job work” receipts from the various parties. As noted by the Principal CIT, even during the 263 proceedings, the assessee has not been able to satisfactorily reconcile the difference. Another aspect for consideration, is the disallowance on account of late payment of employees Provident Fund beyond the due date prescribed under the relevant Act. This issue was not analysed by the AO during the course of assessment proceedings, especially when the language of the Act is clear and unambiguous. In our view, during the course of assessment proceedings, the AO did not verify certain details which in our view should have been done in order to assess the correct taxable income of the assessee. Accordingly, in a considered view, the Principal CIT has not erred in law and facts in setting aside the assessment order under s. 263 of the Act since the same is erroneous and prejudicial to the interests of the revenue. The same is accordingly being set aside to pass a fresh order after giving due opportunity of hearing to the assessee. Appeal of the assessee is dismissed.
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